Buying a home is a significant milestone, but the process can be fraught with complexity—especially when it comes to anti-money laundering (AML) checks.
As these are a legal requirement in the UK property market, prospective buyers often ask: “How long do money laundering checks take when buying a house?” The answer varies, but understanding the process can help avoid delays, claims SmartSearch.
SmartSearch offers a digital solution that helps estate agents and property professionals meet their AML obligations efficiently. Their platform can perform Know Your Customer (KYC) checks in under two seconds, alongside comprehensive Customer Due Diligence (CDD) and Source of Funds (SOF) verifications.
Estate agents play a critical role in the AML process. They must complete proof of funds checks, customer identity verifications, and file Suspicious Activity Reports (SARs) if they detect any red flags. These checks are essential to prevent financial crime and uphold the integrity of the sector.
The timeline for AML checks can range from five days to two weeks, depending on how quickly documents are submitted and whether Enhanced Due Diligence (EDD) is required. Buyers should prepare identification, address verification, and proof of funds in advance to streamline the process.
AML checks generally begin with identity verification using documents like a valid passport or driving licence. Address verification follows, using utility bills or council tax statements. The final step involves confirming the legitimacy and origin of the funds being used to purchase the property.
Several factors can prolong the process. Foreign funds, anonymous buyers using shell companies, and overpayments that don’t match income levels are all red flags that can trigger EDD. In such cases, estate agents must conduct deeper investigations and may need to file SARs.
To meet their legal obligations, estate agencies must register with HMRC, appoint a Money Laundering Reporting Officer (MLRO), and establish internal AML procedures. Staff must also receive regular AML training, and firms must maintain detailed records for audits.
Failure to comply with these regulations can result in heavy fines or even prison time. Recent figures from HMRC show that between October and December 2023, 144 estate agents were fined for AML breaches—one firm received a penalty of £175,701.
AML compliance is vital not just for legal reasons but for economic stability. Financial crimes, including money laundering and fraud, cost the UK £570m in the first half of 2024 alone. SmartSearch offers a digital-first solution to help estate agents fulfil their AML obligations confidently, from CDD checks and PEP screenings to ongoing monitoring and record-keeping.
Money laundering disguises the origins of criminal proceeds through fraudulent transactions such as tax evasion or bribery. In the UK property market, estate agents, mortgage lenders, and solicitors all have AML responsibilities to help prevent these activities. While estate agents typically cover the cost of these checks, customers may sometimes be charged.
Importantly, AML checks will not affect a buyer’s credit score, as they are only recorded as soft searches unless a hard check is performed by a mortgage lender.
SmartSearch, a UK provider of digital compliance and AML solutions, previously announced a significant expansion of its executive leadership team.
This strategic move is designed to propel the company’s next growth phase, following a substantial investment from Triple Private Equity and the appointment of Phil Cotter as CEO.
The bolstered leadership team aims to enhance SmartSearch’s customer service and spur the development of innovative products and services. Key appointments include Stuart Morris, who joins as Chief Technology Officer with a wealth of experience from EY, Barclays, and LSEG. In his new role, Morris will spearhead the technology team, focusing on customer-centric innovations.
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