The property market is picking up again as interest rates start to fall, and with summer being the peak time of year to move house, estate agents around the country are dealing with prospective new buyers. HMRC, the government body which manages tax, is vigilant about enforcing anti-money laundering (AML) regulations and is cracking down on agents who fail to conduct thorough checks on people who express an interest in buying or selling. Government rules specify that estate agents must run identity checks on not just the buyers, but the sellers too.

Fines for Non-Compliance

HMRC data reveals in a six-month period in 2022, 68 estate agents across the UK were fined a total of £519,000 for non-compliance with rules aimed at preventing money laundering from criminal activities. An additional 56 fines were issued between January 1 and March 31, 2023. Estate agents have to register with HMRC, and submit checks on sellers and buyers regularly.

Estate agents are supposed to log into an online portal, and enter the names and addresses of the people who they want to check. The software will then allow the agent to upload an image of a passport or driving licence which the client has provided, and compare that to a selfie of the customer taken with a webcam.

Property-Related Identity Checks Fraud

According to the industry, the property market in the UK is seeing “several thousand” cases of fraud each year. Some attempts are blatant, like using a photo on a stolen passport, while others are more sophisticated. Criminal groups continually devise sophisticated methods to launder money through property, which places increasing pressure on the industry to adopt more sophisticated measures to stop them. Fraudulent documents are becoming increasingly more difficult to detect which is why technology is being used more frequently to pick up fakes and forgeries.

Be Prepared When Buying or Selling

When the market is moving quickly, any extra paperwork which adds delays into the system can be frustrating. Remember though that all the other parties who might be interested in buying the property will be going through the same processes as you. Visit the estate agent early in the process of viewing properties, and consider going through the identity verification before you’re ready to start putting in offers. If you are thinking of viewing multiple properties with different agents, you might have to repeat the process with every office.

Identity checks are usually simple and will involve showing some sort of photographic ID such as your passport or driving licence. If you are buying your property with another person, or selling as a joint owner, then both people will have to prove their identities to comply with the rules. Your estate agent or lawyer will be able to provide advice and guidance on managing the process if you are not sure what documents you should provide. People from outside the UK, who have the right to buy property in the UK, might have to provide more detailed information to comply with the legal requirements.