The British property industry is no stranger to paperwork. But in 2026, the weight of regulatory compliance has grown into something that demands far more than just good filing habits. It requires investment, culture change, and a fundamental shift in how agents see their own role.
A Regulatory Landscape in Transition
The past year marked a turning point for anti-money laundering (AML) regulation in the UK. HM Treasury’s published its first National Risk Assessment in over five years signalling a new era of scrutiny. Alongside this the Government published their intention to restructure how AML is regulated with the legal and accountancy sector. Finally, newly drafted money laundering regulation is set to be laid before parliament this year.
After nearly a decade, the existing rules are showing their age. Written before many of today’s technological advancements, fundamental shifts in consuming behaviour and a vastly different financial infrastructure. The current regulations leave too much room for interpretation and not enough room for confidence that firms are fully equipped to face today’s challenges.
The hope for 2026, is that clearer guidance and updated regulations, will finally define what’s expected of regulated entities, regardless of sector, closing the gap between what agents are doing in practice and what the law explicitly permits.
The Cost of Getting It Wrong in 2026
Last quarter alone saw £850,000 in fines handed down across the sector. The numbers are stark, but the reasons behind them are, in many cases, avoidable. The most common failure? Agents are not registering with their supervisory body, HMRC, in good time. Beyond that, enforcement action has targeted weak customer due diligence, insufficient staff training, and inadequate risk assessments.
Identifying politically exposed persons (PEPs) remains a persistent challenge. If major banks, with their vast compliance infrastructure continue to struggle with PEP and sanctions screening, its little wonder smaller agencies find themselves exposed.
Beyond Financial Penalties – the Real Cost of Compliance
For larger agencies, the burden is not just financial, it’s operational. Managing compliance across a workforce of several hundred staff means constant training, updating procedures as regulation evolves, and onboarding new joiners into that culture repeatedly. In an industry with annual attrition rates of 25–30%, that cycle never stops.
The cost sits across three areas: awareness of what’s changing, implementation throughout the business, and ongoing training. The larger the organisation, the harder each of those becomes. May firms see AML compliance as an unnecessary burden that just slows down sales but a recent Unexplained Wealth Order involving over 85 luxury properties across London, totalling £81 million continues to show how big a problem it is for the property sector and why a shift in mindset is required.
From Red Tape to Proactive Protection
There’s a more encouraging shift happening in how the industry understands its own compliance obligations. The view that AML regulation is simply a sales prevention exercise, more red tape, more admin, is giving way to something more purposeful.
Estate agents, it turns out, are on the front line of financial crime prevention. Every time a member of staff verifies a client’s identity or flags an unusual transaction, they are, however unglamorously, disrupting money laundering, fraud, and in some cases far more serious crimes. That reframing matters. It turns a compliance checkbox into a professional responsibility, into protecting people’s homes and life’s from financial crime.
Raising Compliance Standards = Raising Standards
There is a broader argument to be made that tighter regulation is good for the industry’s long-term credibility. Entry into estate agency remains relatively straightforward — and that low bar has historically attracted operators who treat it as a short-term venture rather than a professional career. Meaningful regulatory requirements change that calculation. They filter for commitment.
“It’s probably too easy to open up an estate agency. That bar needs to be lifted and and I think it has to a point. The higher the bar means people are coming into it for the long term, they’re being serious, they’re not just coming in and darting off quickly. So more regulation is probably a good thing.”
David Powell, CEO of Andrews Property Group
An industry that wants to be taken seriously — by consumers, by government, by the financial institutions it works alongside — must accept that professional standards come with professional obligations. A recent of survey of homebuyers attitudes by Credas, placed Estate Agents as the least trusted profession within the property transaction. Regulation, when it is clear and consistently applied, doesn’t just protect the public. It protects the reputation of the agents who are doing things properly.
What the Sector Needs Now is Clearer Guidance
The ask from the industry is not less regulation but better regulation. Guidance that is specific rather than ambiguous. Rules that reflect how identity verification works in 2026, not 2017. A level playing field where every agent, large or small, understands exactly what is expected of them and can demonstrate it. We’ve already received some clarity on the use of the digital identity verification services in regards to money laundering regulations, hopefully this will lead to further guidance from the relevant regualtors.
That clarity would allow compliance to become what it should be: not a burden, but a foundation for a flourishing property market built on trust and certainty.
“I think regulation is great but not when it’s grey. Hopefully in 2026, we’ll have more a more streamlined regulatory standpoint that at least just explains to us exactly what everyone’s meant to be doing”
Rhian Del-Valle, Director of Enterprise Partnerships, Credas
