Updated insights from the UK’s 2025 National Risk Assessment
The Latest View from HM Treasury
Earlier this year, HM Treasury released the UK’s latest National Risk Assessment (NRA), the first update in five years. The 163-page report assesses the threat of money laundering and terrorist financing across multiple sectors and sets out how risks have evolved since the last assessment.
Is Commercial Property Still an AML Risk?
Unfortunately, yes. Despite tougher legislation and greater scrutiny, the property sector remains one of the UK’s highest-risk areas for money laundering.
According to the National Crime Agency (NCA), an estimated £10 billion is laundered through UK property each year.
While not every transaction exposes brokers or agents to that level of risk, the commercial and high-end residential markets continue to attract illicit funds, particularly through complex ownership structures and offshore arrangements that obscure beneficial ownership.
Why is commercial property still such a big risk?
Property continues to appeal to criminals because it allows large sums to be moved or stored with apparent legitimacy. And it’s not just the super-prime sector. Even smaller commercial units or flats worth £50,000 have featured in recent money-laundering convictions.
Recent shifts in how property can be purchased have compounded the challenge:
- Property auctions allow for rapid transactions, leaving little time for thorough due diligence.
- Remote and online purchases make it easier to hide the true buyer’s identity behind intermediaries or nominees.
- Online property funds allow individuals to easily invest smaller amounts across multiple properties allowing them to fly under the radar.
Four Key Risk Areas in Commercial Property
The 2025 National Risk Assessment highlights four areas where brokers and agents should exercise particular caution relating to AML risks in the commercial property sector.
1. Commercial Investment Vehicles
Structures such as REITs, OEICs, and property funds are legitimate investment vehicles, but their layered ownership can conceal the true source of funds and beneficiaries.
Investment vehicles can be used by criminals to easily fragment large sums across multiple entities, hiding illicit origins even when regulated asset managers are involved.
Brokers should therefore apply enhanced due diligence (EDD) and seek clear evidence of beneficial ownership when such vehicles form part of a deal.
2. Bridging Finance
Bridging loans are popular for their speed and flexibility, but those same features make them vulnerable to abuse. Criminals have been known to use bridging finance to inject dirty money into property deals, later refinancing through legitimate mortgages to make the funds appear clean. Some even create their own bridging firms, issuing loans funded by criminal proceeds and repaying them as “returns.”
While bridging lenders are FCA-regulated, brokers should still verify both borrower and lender identities, along with their source of funds and wealth.
3. Commercial leasing of lower-value properties
While most of the report focusses on the higher end of commercial property transactions, that doesn’t mean the lower-end is risk free. In fact, the lower end poses its own separate array of risks as they often fall below AML transaction thresholds, creating blind spots that criminals know can be exploited. Even when transactions due fall below the AML threshold, brokers can still be held liable under the Proceeds of Crime Act (POCA) if they unknowingly handle illicit funds.
As a lot of low-end commercial properties are frequently located in industrial or remote areas, this makes them very attractive to organised crime groups. As industrial units generally operate in areas without as much scrutiny as retail units, they make for ideal locations for drug production, waste crime, or trade-based laundering. The report notes there has been a notable rise in large-scale cannabis cultivation within commercial units, generating substantial illicit profits. For example, in October Merseyside police reported the arrest of 21 individuals linked with the large scale production of cannabis operating out of a warehouse located close to the docks.
4. Property Development
Property Developers themselves are often not subject to AML supervision, depending on how they operate, leaving a critical gap in property chain that can be abused by criminals. A high proportion of overseas buyers and off-plan sales further complicates risk management, especially when foreign agents handle deposits on behalf of UK developers.
In such cases, it’s often unclear who is responsible for customer due diligence (CDD). Is it the developer, the overseas agent, or the sales intermediary. This ambiguity makes it harder to trace the origin of funds or identify high-risk individuals.
How Commercial Property Brokers Can Mitigate These Risks
Awareness is the strongest defence in the fight against AML risks in the Commercial Property sector. The greater the awareness you and your staff have of potential money laundering risks the more you that can be done to mitigate it.
To reduce exposure, commercial brokers should take the following practical steps:
- Update AML policies and procedures to reflect the findings of the 2025 NRA.
- Deliver refresher training so all staff can spot red flags and understand new risk typologies.
- Apply enhanced due diligence (EDD) for complex structures, high-value deals, or overseas investors.
- Verify beneficial ownership and source of wealth — even when regulated intermediaries are involved.
- Keep comprehensive audit trails documenting all checks and decision-making steps.
The more informed your team is, the more resilient your firm becomes.
By embedding strong AML practices, commercial brokers can help protect both their business and the integrity of the wider property market.
