What does the Anti-Money Laundering Strategy 2026–2029 mean for Property Developers?

The UK’s anti-money laundering regime is firmly established and, for those obliged to comply with the Money Laundering Regulations 2017 (the “MLRs”), well understood. However, in its newly announced Anti-money Laundering and Asset Recovering Strategy for 2026-2029, the government acknowledges that the advancement of technology, including AI and cryptocurrency, means that the regime needs to adapt to these risks and must continue to monitor how criminals may take advantage of gaps in the existing regulatory landscape. 

As outlined in a recent article by our corporate crime team, the property sector has long been recognised as a vehicle for laundering criminal proceeds and concealing the true ownership of illicitly obtained assets. Despite the risk of criminal activity within the sector, property developers currently are not all necessarily required to comply with the requirements of the MLRs. Although the money laundering risk is likely to be the same, whether a property developer is in or out of scope of the MLR may depend on intragroup arrangements for property sales and lets, creating a gap in the regulatory framework which was identified in the National Risk Assessment of Money Laundering and Terrorist Financing 2025 (“NRA 2025”). The government’s strategy is aimed at addressing this gap and proposes  a consultation on whether all property developers (alongside other sectors such as offshore virtual asset service providers and football clubs and agents), should be brought within the operation of the MLRs, and if not, what alternative regulatory approaches might be better suited to address the risks identified. As yet, no further detail has been provided as to what an alternative approach might look like.

The strategy also proposes consulting on the current scope of regulation for those carrying out letting agency work (which may include property developers in some circumstances). This consultation is likely to consider whether the threshold for inclusion in scope of the MLR should be lowered. Currently, only those who carry out relevant activities in relation to properties with a monthly rent of £10,000 or more are currently caught by the MLR, but the NRA 2025 identified potential AML risks with rental properties below this threshold. Any change to the threshold value may bring more businesses within scope of the MLR, but this will ultimately depend on the nature of any amendments.     

The government has committed that any sector will only be added to the MLRs where doing so is necessary and proportionate to address a real, identified money laundering or terrorist financing risk. The fact that some property developers are already within scope of the MLR may mean that the government determines that no additional measures are required, but that there is an additional emphasis on enforcement. The approach taken will ultimately depend on the outcome of the consultation and further deliberation within government.  

This workstream will be jointly led by HM Treasury and the Home Office, with support from HMRC, the FCA, the National Crime Agency's National Economic Crime Centre, and the Department for Culture, Media and Sport, with the consultation scheduled to launch in the 2026/2027 financial year.  Depending on the consultation's outcome, secondary legislation could be drafted in 2027/2028, with potentially affected sectors integrated into the regulated sector as early as 2028/2029.

The strategy also highlights the continuing reforms to UK corporate and asset ownership transparency, including the Register of Overseas Entities, which the government claims has already improved transparency over overseas ownership of UK property. Further enhancements of the register of overseas entities are still to be implemented, such as the requirement to provide a list of all title numbers of assets held by registered overseas entities, as part of the annual updating process, which may be burdensome where an overseas entity holds numerous titles and/or has a high frequency of dealing with its assets.

For now, property developers will be keeping a watchful eye on the progress of the proposed consultation, whilst continuing to comply with the existing transparency requirements which already apply, such as the Register of Overseas Entities.