Falling SARs in property sector heighten enforcement risk for estate agents

A 14.8% fall in Suspicious Activity Reports (SARs) submitted by estate and letting agents in 2024–25 is likely to draw regulatory attention, particularly as legal sector reporting rose sharply over the same period, according to data from the UK Financial Intelligence Unit (UKFIU).

The latest SARs Annual Report shows property agents filed 890 reports in 2024–25, down from 1,044 the previous year. By contrast, the legal sector increased filings by 40%, from 2,419 to 3,392.

Defence Against Money Laundering (DAML) requests show a similar divergence, with legal professionals submitting 1,336 requests compared with 454 from the property sector.

While the UKFIU cautioned that a transition to a new reporting portal may affect comparability, the scale and direction of change between sectors is likely to sharpen scrutiny of estate agency compliance frameworks.

A statistical red flag

In isolation, lower SAR volumes do not necessarily indicate weaker compliance. However, regulators typically assess reporting trends alongside sector risk exposure. Given that property transactions remain a recognised channel for money laundering — particularly in high-value and cross-border purchases — a sustained decline in reporting could be interpreted as a detection gap rather than reduced criminal activity.

Supervisors may therefore ask whether estate agencies are:

• Conducting sufficiently robust customer due diligence (CDD)

• Updating risk assessments to reflect evolving typologies

• Escalating internal suspicions appropriately

• Providing adequate AML training to frontline staff

A widening reporting disparity between comparable “gatekeeper” professions — lawyers and property agents — risks creating benchmarking pressure.

HMRC supervision and enforcement trajectory

Estate agents fall under anti-money laundering supervision by HM Revenue & Customs (HMRC), which has in recent years increased inspection activity and financial penalties across supervised sectors.

Where regulators perceive under-reporting, enforcement responses can escalate from remediation notices and compliance visits to civil penalties, public censures and, in severe cases, criminal investigation.

A declining SAR trend may also trigger thematic reviews or sector-wide guidance updates. Supervisors often use outlier data — whether unusually high or low reporting rates — to prioritise inspection resources.

Personal liability risks

Under the UK’s Money Laundering Regulations, nominated officers (MLROs) within estate agencies carry personal responsibility for SAR submission decisions. Failure to report knowledge or suspicion of money laundering can constitute a criminal offence.

If regulatory bodies conclude that SAR volumes are inconsistent with sector risk exposure, scrutiny may extend beyond firms to individual compliance officers.

That risk is compounded by growing expectations around audit trails, documentation standards and evidence of “risk-based” decision-making. Firms relying on manual or fragmented compliance processes may find it harder to demonstrate consistent oversight.

Technology, cost and compliance culture

Technology providers argue that automated identity verification and reusable digital compliance tools can reduce administrative burden while improving detection rates. However, regulators typically focus less on the tools themselves and more on outcomes: whether suspicious activity is identified and escalated effectively.

A sustained divergence between property and legal sector reporting may therefore prompt questions about compliance culture, training investment and board-level oversight within estate agencies.

For firms already operating under margin pressure, increased enforcement activity could translate into higher compliance costs, reputational risk and operational disruption.

Regulatory inflection point

Whether the 2024–25 figures represent a temporary anomaly linked to system changes or a deeper structural issue will become clearer in subsequent reporting cycles. However, in an environment of heightened AML scrutiny and political sensitivity around illicit finance in UK property markets, declining SAR volumes are unlikely to go unnoticed.

If supervisors interpret the trend as under-reporting rather than reduced risk, estate agencies could face a period of intensified inspections and enforcement — particularly if comparative data continues to show stronger vigilance from other gatekeeper professions.