Navigating New Compliance Regulations: What Letting Agents in Crewe and Stoke-on-Trent Need to Know

It's been a tough old slog for letting agents of late – not just here in Crewe and Stoke-on-Trent but up and down the country. We've got the Renters Rights Bill, Section 21 debates, confusion around pets in property, frequent news reports of a landlord exodus (which, as we've reported previously, is often overblown or even a red herring)… and not to mention an ever-growing admin mountain that comes with modern management of tenancies.

Now, as we see the end of the first quarter and head into an as-usual buoyant spring market, two overlapping but distinct compliance regimes are causing many letting agents to scratch their heads. As if global uncertainty wasn't enough already (thanks to Trump's so-called 'Liberation Day' tariffs), new regulations landing at our doorstep are also really turning heads.

Compliance Changes Set to Hit the Lettings Industry in May 2025

The industry has long-anticipated an expansion of Letting Agent obligations under existing Anti-Money Laundering Regulations.

There is a change coming in, in May 2025, and it does involve all lettings agents undertaking the sort of checks they have seen their colleagues in residential sales undertaking to comply with Anti Money Laundering legislation (often under the same roof).

However, the change coming in falls under legislation around financial sanctions reporting, which is now being extended to letting agents who are being added to the list of 'relevant firms' (already a requirement for sales agents) – but, this does not fall under Anti Money Laundering legislation.

The result? Confusion, overlapping guidance, and many concerned faces at lettings industry get-togethers, seminars, and conferences across the land.

So, let's take a breath. In this week's blog we at Best Nest separate fact from fuss, and break down what these changes actually mean… and what letting agents like ourselves in Crewe and Stoke-on-Trent need to be doing right now.

The Cause of Confusion

The trouble isn't that the new regulations themselves are unclear, per se. It is that they've arrived at a time when a proposed change to AML legislation is also a hot topic (and probably better known about). That proposed change is anticipated, generally favoured (for simplicity's sake if nothing else), but is as yet unconfirmed.

Furthermore, it is legislation that in plenty of ways would target many (but not all) of the same bad actors, be undertaken by the same group of professionals, and would often cover the same responsibilities, such as:

• Customer due diligence (CDD)

• Identification of beneficial ownership

• Suspicious activity recognition and reporting

Many letting agents remain unsure which regulation applies to whom, when, or how, and who should be informed about what, when, and why.

Worse still, either way, both regimes come with heavy penalties for getting it wrong, including accidental breaches… and hence the need to really know your onions.

So, let's take a deeper look at what is changing… and what is not!

Expansion of Anti-Money Laundering Regulations – Anticipated!

Currently, only letting agents handling rents above €10,000 per calendar month are required to register with HMRC for AML supervision.

Whilst not yet confirmed, there has been industry speculation that the threshold may reduce to £5,000 per month from May 2025, dramatically increasing the number of agents who must comply with full AML obligations. As it goes, many in the industry, and not least Propertymark, has argued that all lettings agents should have to comply with AML regulation in the same way as residential sales already has done for some years – not just as a means to help the government tackle it as an issue, but also to remove the element of doubt, and the risk of getting it wrong.

What AML Compliance Involves:

• Registering with HMRC as a supervised business (and renewing annually)

• Performing risk assessments across the business

• Completing Customer Due Diligence (CDD) for landlords and tenants

• Verifying identity

• Verifying source of funds and source of wealth, and understanding the difference

• Reporting Suspicious Activity Reports (SARs) to the National Crime Agency (NCA)

• Maintaining secure and detailed record-keeping systems

Larger agencies may already be set up for expanded compliance, should it come into place, due to often having associated sales operations, but of course many smaller lettings-only or property management firms are wondering what is involved and how, when and why they should comply.

And when you consider the cost of registration, training, and potentially new software or services for verification, it is understandable that concern is growing, particularly amongst smaller firms.

As it stands, some agents are opting to apply full CDD universally across all lets to ensure consistency and avoid doubt – something that it feels Propertymark are implicitly (if not explicitly) recommending.

Financial Sanctions Reporting

Whilst AML regulations have a defined (although arguably largely arbitrary) threshold for supervision, the financial sanctions change is broader, more urgent, and more unforgiving.

From 14 May 2025, all letting agents will be required to report any suspected breaches of the UK's financial sanctions regime.

This includes any landlord or tenant who:

• Appears on the UK sanctions list (maintained by OFSI)

• Has assets frozen

• Is connected to a sanctioned country, entity, or person

The agent has a legal duty to report it to OFSI immediately.

The Big Catch? Strict Liability

Unlike AML breaches, where negligence must be shown, sanctions reporting follows a strict liability regime. Agents can be penalised even if they did not know someone were sanctioned – if it is deemed they should have known or failed to carry out checks.

This is a huge risk for agents unfamiliar with the sanctions list or unsure how to verify identities against it, and this is why AML is often, confusingly, referred to in the same breath – because the steps taken to verify identity under AML should flag if an individual is on a sanctions list.

The OFSI has already started to issue fines and to name, shame and fine offenders for breaches, and enforcement is only expected to rise in 2025.

Crewe and Stoke-on-Trent Lettings in Focus: Are We Affected?

You may assume that Crewe and Stoke-on-Trent, perhaps due to their affordability compared to London or Manchester, might just fly under the radar of these new rules. But in reality, the local property market in Staffordshire and Cheshire is evolving fast.

• Executive properties in areas like Nantwich, Sandbach, and the outskirts of Crewe can command premium rents approaching or exceeding £5,000 per month – which could bring them under the new AML threshold being considered.

• Student accommodation and HMOs, particularly those serving Keele University and Staffordshire University students, can collectively push landlords over relevant thresholds when managed as portfolios.

• The industrial and logistics boom in both areas is bringing in corporate tenants with complex ownership structures that require careful verification.

In short, this definitely isn't just a London issue. Letting agents in Crewe, Stoke-on-Trent and across the region fall firmly within the compliance net (as indeed will agents the nation over – so the best advice: get prepared!)

What Letting Agents Should Be Doing Now

Most of our blogs at Best Nest are written with landlords or tenants in mind, guiding them through the lettings landscape, but for a change, we have written today's piece with warm thoughts for our fellow agents front and centre, because we know this is something that has caused a fair dose of worry in the industry. To that end, if you are an agent wondering what to do next, don't panic. Here is a useful checklist that letting agents in Crewe, Stoke-on-Trent or anywhere else can follow, to know what they should be working through right away:

For AML Compliance:

• Review your portfolio: do any tenancies exceed €10,000 per month?

• Register with HMRC for AML supervision… even if you don't have tenancies that exceed €10,000 per month. If Propertymark's recommendations are taken, it may be removed to expand to all properties in any case. It is straightforward, relatively inexpensive in the grand scheme of things, and at the very worst it is pre-emptive.

• Create a risk assessment and CDD policy (Propertymark can offer support)

• Train your team to spot red flags and to report suspicious activity (Propertymark or Rightmove can provide help and training)

• Implement a secure record-keeping system

For Sanctions Compliance:

• Check the OFSI sanctions list against landlords and tenants

• Add a recurring diary reminder to review the sanctioned countries list – it changes! (we suggest you check every 6 months)

• Update your terms of business to include AML and sanctions clauses

• Train staff on the differences between AML and sanctions reporting

• Consider a compliance software partner for peace of mind

A Final Word: Clarity Amidst the Chaos

These are significant changes, and the stress felt by letting agents is real. It is also legitimately felt, especially when guidance from regulators has been pretty patchy, timelines are now tight, and the stakes are high.

But remember: this isn't about "tripping agents up". It is genuinely about protecting the integrity of the UK property market, which remains a target for illicit finance.

By understanding the difference between AML compliance and financial sanctions rules, and by acting proactively, letting agents can position themselves as reliable, professional, and compliant partners – something that landlords and tenants inevitably value.

Ultimately, we are professionals. This is an opportunity to show our professionalism and genuine care about the process.

Great agents will set themselves apart and in doing so they will attract the right landlords and tenants to them.

Crewe and Stoke-on-Trent are growing, modern areas with busy lettings markets to match. At Best Nest, we believe agents who adapt now won't just manage these changes successfully; they will build trust, win better business, and will lead in their local market by example.