The guidance is now specific. HMRC's July 2026 AML guidance for estate agents removes most of the grey areas. The word "must" appears 101 times, signalling a mandatory legal requirement,
An ID check is not enough. Full AML compliance means a documented Business-Wide Risk Assessment (BWRA), Policies, Controls and Procedures (PCPs), recorded staff training, and evidence on every transaction.
The scope often extends beyond the buyer or seller. Estate agents must also check beneficial owners, gifters, trustees, executors and anyone acting on a customer's behalf.
The real cost is time. It lies in the staff hours spent gathering, analysing and documenting information, not in the price of an ID check.
For estate agents, AML compliance has never been more demanding, or more closely scrutinised.
HMRC's July 2026 guidance is considerably longer and more detailed. Yet surprisingly across the industry, there is still real uncertainty about what "being compliant" actually looks like day to day.
That was the focus of Coadjute's live webinar, What it really takes to be compliant in 2026. Phil Spencer, property expert and co-presenter of Channel 4's Location, Location, Location, was joined by John Reynolds, COO of Coadjute, who has more than 30 years of experience in governance, risk and compliance.
This article summarises the key points. You can watch the full webinar on demand to see every scenario and audience question in detail.
HMRC's July 2026 guidance sets out, in specific terms, what estate agents must do for buyers and sellers. That includes trusts and companies, and scenarios such as probate and lasting power of attorney. Much of the ambiguity agents could previously point to has gone.
"The punchline is the guidance is now very specific, and the grey areas have largely been removed."
John Reynolds, COO, Coadjute
The guidance uses the word "must" 101 times to indicate a mandatory legal requirement. According to John Reynolds, failing to meet any one of those requirements means an agency is not meeting its legal obligations. In the most serious cases, that can lead to deregistration.
The HMRC guidance is structured in three parts: a section for all HMRC-supervised sectors, a section specific to estate agency businesses, and a risk assessment chapter. John described the risk assessment chapter as, in many ways, the most important. It requires estate agents to take its contents into account when carrying out due diligence. That covers super-prime property, whether a customer's profile is consistent with the transaction, politically exposed persons (PEPs), and trust beneficiaries.
The guidance is also explicit about Source of Funds. It is not enough to know the money came from a UK bank account. Estate agents need to understand how, and from where, the customer obtained it. (For a fuller explanation of the difference, see our guide to Proof of Funds, Source of Funds and Source of Wealth.)
Full AML compliance means having a complete, joined-up system, not just carrying out ID checks on buyers and sellers. HMRC expects estate agents to have four linked elements in place.
The first is a Business-Wide Risk Assessment (BWRA): a documented assessment of the money laundering and terrorist financing risks the business faces. The second is a set of Policies, Controls and Procedures (PCPs), which set out how the business manages those risks and how staff should apply them on every transaction. The third is staff training, recorded in a training register. The fourth is transaction-level evidence, showing what was checked, what was found and how each decision was reached.
When HMRC writes to an estate agency requesting an audit, it will ask for the BWRA, the PCPs, the training register and a list of transactions from the last three to five years.
"You have to be able to demonstrate the end-to-end system."
— John Reynolds, COO, Coadjute
As John put it, agents need to "show their workings." A file from three years ago, completed by someone who has since left the business and containing a handful of passports and bank statements, will not stand up to scrutiny.
The question is not whether checks were done. It is whether you can prove what was done.
Under HMRC's guidance, estate agents must complete customer due diligence on customers and their beneficial owners, and must identify anyone acting on a customer's behalf. In practice, that often means checking far more people than the buyer or seller who walks into the branch.
"The person who walks into your branch, who is buying or selling the property, is not necessarily the only person you're going to have to check."
— John Reynolds, COO, Coadjute
John illustrated this with three common transactions.
A purchase funded by a trust and a gift. A buyer appears to have everything in order: £300k in the bank and a mortgage offer. But his bank statement shows £180k from a family trust, a gift from his mother, and a £45k deposit described as a work bonus. Each needs to be understood and evidenced. That means identifying the trust's trustees and settlors, obtaining a gifted deposit declaration confirming the mother is not a co-buyer, potentially establishing her Source of Wealth, and querying why only £35k of the £45k bonus arrived.
A sale under lasting power of attorney. Both the property owner and the attorney acting on her behalf are in scope. Elderly customers may not hold a valid passport or driving licence. HMRC's guidance allows non-standard documents, such as a letter from a care home, once standard options have been exhausted. The estate agent must also establish the basis on which the attorney is acting, including consent or mental capacity.
A probate sale. The grant of probate may name executors the agent was not told about. Each executor must be identified, screened against PEP and sanctions lists, and confirm their authority to sell. Sale proceeds should go to the estate's account, not to an individual executor.
These situations are often sensitive and stressful for families, so gathering the right information requires skill and care as well as process. John walks through each scenario step by step in the on-demand webinar.
According to John Reynolds, the real cost of AML compliance is not the price of an ID check. It is the time spent by staff collecting, analysing and documenting information on every transaction.
He described AML as two distinct jobs. The first is building the system: reading the guidance, mapping every risk, and writing the policies and procedures. The second is running it: on every transaction, identifying who is in scope, collecting the information, analysing it and documenting the outcome.
Technology can help with part of this. Software is effective at collecting data, such as bank statements, identity documents, and PEP and sanctions screening results. But deciding who needs to be checked, interpreting the evidence and writing the risk assessment still depend on people with specialist knowledge.
"The real cost of compliance is the time your staff use up on a daily basis, chasing around all this information."
— John Reynolds, COO, Coadjute
"There's quite an opportunity cost if you're going to tackle it yourself. All the while you're dealing with this, you're not actually winning instructions or selling property."
— Phil Spencer
Estate agents already rely on accountants for tax and lawyers for contracts, because those are specialist disciplines. AML increasingly belongs in the same category.
To evaluate any provider, John recommends a simple gap analysis. Take the risk assessment chapter of HMRC's guidance and ask the provider for a sample end-of-transaction report. Does the report explicitly address each risk, including Source of Funds and Source of Wealth?
"Anything you can't see in the report is on you."
— John Reynolds, COO, Coadjute
This matters because many ID providers state that customer due diligence remains the estate agent's responsibility. Understanding exactly what your provider covers, and what your contract says, is essential.
John Reynolds' single recommendation is to step back and review your AML framework end to end.
Do your risks, policies, controls and day-to-day procedures genuinely line up? And could you pick any report from the last six months and explain, without relying on anyone's memory, exactly what happened on that file?
If the answer is no, there may be a gap between what your AML policy says and what your business can actually evidence. For more on this, read HMRC's latest AML guidance raises an important question: can you prove your compliance?
This article covers the highlights. To see John's full walkthrough of HMRC's guidance, the detailed transaction scenarios, and every audience question answered, watch the webinar on demand.
If managing AML is becoming an increasing burden on your team, book a demo with Coadjute to see how a fully managed AML compliance service can take the specialist work off your hands, freeing your people to focus on what they do best.