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Revealed – what estate agents need to know to succeed at compliance in 2023

The dreaded ‘C word’ – compliance – has been facing Estate Agents for years now and it’s not going anywhere.

Looking ahead at what’s to come on the compliance-front during the rest of the year that will impact agents, two industry experts - Emma Burdis, Head of Compliance at iamproperty and Louis Lancaster, Risk and Compliance Manager at Credas, share their insights and tips to help agents succeed at compliance, keeping them one step ahead.

Emma: Let’s get down to it. Upfront Material Information – what are your thoughts on it?


Louis: I think upfront Material Information is a good thing. Groups like the Property Ombudsman have encouraged getting material information upfront for a long time, but it was never a requirement. It’s going to really help prevent fall throughs, with people able to see more information about a property before they even decide to view it. Then further down the line there won’t be any surprises that could slow the sale or lead people to pull out.

It will help to get agents into a compliance mindset earlier on in the process and reaffirm how important compliance is – not just for due diligence but in helping agents to get paid faster, as transactions will happen quicker and be more secure. If agents know from the outset that they’ve got to get this information, then their head is already into compliance, so doing the other checks and things that are required should flow more naturally for them. It could be transformative for improving the speed and process of transactions, but only if agents are using the right technology to gather the information for them.

Emma: What else do agents need to look out for in 2023?

Louis: We’re going to see an increase in regulator fines. Last year HMRC did more visits than ever and issued some big fines. I think this will continue. Off the back of Covid and how busy the sector has been, it’s more likely that some due diligence will have fallen through the cracks. They’ll also be keeping in mind all the companies that requested bounce back loans and will likely start checking if any of them went on to buy property with any of that money. There’s also the Economic Crime and Corporate Transparency Bill, which will mean that any company registering with Companies House will have to have its identity verified for any director and PSC. I think this will mean a big shake up this year.

Emma: What new challenges are agents likely to face this year?

Louis: HMRC’s lack of guidance about what to look for from a technology provider is causing confusion among some agents. The regulations say ‘yes you can use technology’, but they don’t go far enough to say what they would expect. Does HMRC prefer technology over non-technology, and if you do use technology what kind of levels and what are the minimums that you need? Not getting enough clarity from HMRC on what’s acceptable is holding back the adoption of it among some agents, which is making the day to day more difficult for them. Hopefully the adoption sprints by DCMS will help to give some clarity.

There’s also the ongoing Russian sanctions. This isn’t going away anytime soon unless Putin decides to pull out of Ukraine. It’s another area where technology can really support agents, where at the press of a button agents can get the latest database, saving them time and reducing the chance of them transacting with someone they shouldn’t be. For agents who aren’t using technology, this is going to be really difficult to keep on top of.

Emma: What common compliance mistakes are you still seeing and what’s your advice to agents?

Louis: Source and proof of funds is a big one. As a society we’re a bit uncertain about asking people about money, but asking how much a buyer has and where it’s from has to be done. There’s technology that can help here, like your movebutler platform as an example, where a purchaser can do their AIP on the system, so agents will confidently know where the money is coming from. Agents can feel like it’s too invasive to ask questions about money. Historically it’s not been helped by other parties in the transaction. I’ve seen in the past mortgage brokers questioning why their clients are being asked where their money is coming from by an agent, like it’s not their job to find out. But estate agents are subject to the same regulations as brokers and have to do this due diligence.

Emma: Has automation got your backing?

Louis: In 2023, it’s essential for agents to consider technology. Over the last three years agents have been so busy. To then have a fragmented process of doing checks on different platforms or a mix of automation and manual is a pain. Having a platform where you have a seamless process from A to Z all in one place saves so much time and compliance is taken care of every step of the way. Time is money in an Estate Agency after all. There’s been talk that the market will slow down this year and if that is the case agents will need even more time to find new business, so need to be spending less time on manual processes that could be successfully automated.

Emma’s top tips to help agents succeed at compliance in 2023  

  1. Knowledgeable Reporting Officers and Deputies can make all the difference in helping you to meet your AML obligations. Invest time in training them and be sure to let everyone in your business know who they are and how to contact them. Refresh training twice a year and keep your policy up to date, then circulate your policy when changes are made.
  2. A significant number of HMRC penalties in 2021 and 2022 were due to failings to register for HMRC Money Laundering Supervision within in the required time. The penalties were in the thousands. If you are not sure if you are registered, or if you should be, visit the Gov.uk website to find out.
  3. Technology can be used to provide information about clients you may not find yourself, or not without having to spend extra time looking into. There are services that not only provide risk assessments and help with business checks, but take due diligence to the next level by alerting to adverse events, PEPs, Sanctions, invalid documents and whether the client is who they say they are. The saving to your business in terms of time and reducing risk really are worth the spend.



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