Estate agencies in the UK may need to allocate approximately £45,000 annually for a dedicated compliance officer to meet anti-money laundering (AML) obligations, according to analysis by property technology firm Coadjute.
The estimate comes following HMRC’s introduction of updated AML guidance this summer, which requires businesses to adopt a risk-based approach to preventing money laundering, terrorist financing and proliferation financing.
Compliance workload assessment
Under current regulations, estate agents must maintain written risk assessments specific to their operations and implement appropriate policies, controls and procedures to manage identified risks. Coadjute’s analysis examined the practical activities required for an agency to meet these obligations on an ongoing basis.
These activities include maintaining and reviewing business-wide risk assessments, conducting customer and transaction risk assessments, and carrying out customer due diligence and source of funds checks. The firm concluded that these tasks could require at least one full-time compliance professional for an average estate agency branch.
Impact on agency operations
The analysis suggests that distributing compliance work among existing staff could result in larger indirect costs. Coadjute estimates that reallocating negotiator capacity to handle AML workload could displace sales activity worth approximately £185,000 per year for an average branch.
Dan Salmons, Chief Executive of Coadjute, stated: “We’re seeing the end of AML as a side of desk activity. With the July HMRC guidance and the new criminal risks, AML compliance has moved well beyond being a series of checks that can simply be absorbed into someone’s day job.”
The compliance requirements come at a time when the property sector faces broader operational challenges, with recent market data showing fluctuations in transaction volumes. The regulatory framework also intersects with ongoing efforts to modernise property data systems, including recent initiatives between government agencies to improve information sharing.
Salmons added that agencies must demonstrate their procedures are being followed, noting: “The big question for them is who is going to own and operate the compliance function day to day, and how is this increasingly specialist work going to get done?”
Industry implications
The findings indicate that AML compliance is becoming a more substantial operational consideration for estate agencies. The cost estimate of £45,000 represents the annual employment cost for a compliance professional, though actual costs may vary depending on agency size and transaction volume.
The shift towards dedicated compliance roles reflects the increasing complexity of regulatory requirements in the property sector and the potential financial and reputational risks associated with non-compliance.
