Home Property AML checks attributed to foreign buyers hits all-time low

AML checks attributed to foreign buyers hits all-time low

by LLP Editor
15th Jun 22 11:45 am

Credas Technologies, the leading anti-money laundering checks provider, has revealed that the proportion of market activity accounted for by foreign buyers has been in slow decline since 2018, with non-British applicants accounting for just 36% of all checks carried out in 2021.

As the leading body when it comes to AML compliance within the property industry, the internal data from Credas not only provides insight on the industry from an AML compliance standpoint, but it also provides additional market insight, such as the nationality of those looking to purchase a property within the UK.

Previous research from Credas revealed that AML checks had hit a record high during the first quarter of this year and their latest data has also revealed how this balance of domestic and foreign buyers has changed. 

The latest figures show that so far in 2022 (Jan-May), foreign buyers have accounted for just 38% of all AML checks. 

This latest insight suggests that the balance between domestic and foreign buyers could be returning to the UK property market, having consistently tipped firmly in favour of domestic buyers in recent years. 

In 2021, just 36% of all AML checks performed were on foreign buyers. This is by far the lowest proportion since 2018 when Credas’s records began. 

In fact, in 2018, foreign buyers accounted for 56% of all AML checks, falling to 53% in 2019 and again to 50% in 2020. 

At the same time, the number of foreign buyers being approved during the AML compliance process has also declined. Last year, non-British applicants accounted for 35% of all those being approved, down from 50% the previous year (2020) and 54% the two years prior to that. 

While foreign buyers accounted for 62% of all applicants to have been flagged for AML compliance issues in 2021, this too was the lowest proportion of all flagged applicants seen since 2018. 

Tim Barnett, CEO of Credas Technologies says

“The proportion of AML compliance checks attributed to non-British applicants hit a record low in 2021, but the latest data suggest that this trend could be starting to reverse in 2022. 

Of course, a combination of Brexit and the more recent pandemic travel restrictions will have stifled market activity from foreign nationals. However, this decline is down to an overall increased level of AML compliance rather than a decline in foreign demand per se. 

Since 2018, the number of AML checks performed on foreign nationals has actually increased by nearly 3,200%. But at the same time, checks performed on domestic buyers have also climbed by over 7,550%. 

This suggests that where international buyers were previously a far greater focus for the industry when it came to ensuring AML compliance, we’ve since started to take a more all encompassing approach. While the data shows that non-British applicants are far more likely to be flagged when checked, it’s reassuring to see that these checks are being carried out across the board. 

This is undoubtedly a result of advancements in AML technology and today, we’ve streamlined this process to less than a minute. In doing so, we’ve enabled the industry to be as diligent when it comes to domestic AML compliance as they have been traditionally with those from outside of Britain.”

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