New data has revealed that there were an estimated 5.5m anti-money laundering (AML) and identity checks conducted across the UK property market over the last year, at a cost of £15.5m.
AML and identity checks have been a legal requirement since April 2018, when the European Parliament passed the Fifth Money Laundering Directive to prevent organised criminals from laundering money via the property sector.
They are extensive and Credas Technologies, a leading identity verification service, estimates that the average property transaction will see buyers and sellers undergo 5.4 checks, including an AML check, as well as identity checks for fake or stolen passports, identity and impersonation fraud, known as deceased, checks for HM Treasury sanctions, a Politically Exposed Person check and to see if they are subject to CCJs or personal insolvency.
With over a million homes sold across the UK in the last year, that’s an estimated 5.5m checks carried out across the sector – assuming that all buyers and sellers are indeed checked as the law prescribes they should be.
Based on the average cost per check, Credas estimates the total cost to the industry to sit at a staggering £15.5m over the last 12 months alone.
The South East has seen the highest cost paid for AML and identity checks, with some 853,378 carried out over the last year, costing just shy of £2.4m.
Scotland has seen the second highest cost, with an estimated £1.8m paid for property purchasing checks in the last year, followed by the North West (£1.6m), the East of England (£1.6m) and the South West (£1.5m).
Tim Barnett, CEO of Credas Technologies says:
“AML and identity checks are a reality of the world we live in and they go a long way in the fight against organised criminals, who have long targeted the UK property market in order to launder their ill-gotten gains.
However, they can be both time consuming and expensive for those working within the sector, who are already under extreme pressure due to the high volume of transactions that are taking place.
These factors have been the driving force behind the Credas proposition and we’ve been able to combine these checks into one quick and easy process, providing a low-cost, HMRC compliant option so that property professionals can carry out these requirements passively, rather than reactively.
All while saving a considerable sum each year.”
| Table shows the average number of AML and identity checks per transaction, the total number of checks over the last 12 months and the cost of these checks to the UK property sector based on the average cost per check of £2.80 | ||||
| Location | Transactions (Oct 20 to Sep 21) | Average number of checks per transaction | Est number of checks (Oct 20 to Sep 21) | Est total cost of checks (Oct 20 to Sep 21) |
| South East | 158,033 | 5.4 | 853,378 | £2,389,459 |
| Scotland | 120,727 | 5.4 | 651,926 | £1,825,392 |
| North West | 105,998 | 5.4 | 572,389 | £1,602,690 |
| East of England | 103,820 | 5.4 | 560,628 | £1,569,758 |
| South West | 100,844 | 5.4 | 544,558 | £1,524,761 |
| London | 96,490 | 5.4 | 521,046 | £1,458,929 |
| Yorkshire and the Humber | 80,332 | 5.4 | 433,793 | £1,214,620 |
| West Midlands region | 76,729 | 5.4 | 414,337 | £1,160,142 |
| East Midlands | 73,026 | 5.4 | 394,340 | £1,104,153 |
| Wales | 42,452 | 5.4 | 229,241 | £641,874 |
| North East | 36,641 | 5.4 | 197,861 | £554,012 |
| Northern Ireland | 31,170 | 5.4 | 168,318 | £471,290 |
| England | 831,913 | 5.4 | 4,492,330 | £12,578,525 |
| United Kingdom | 1,026,262 | 5.4 | 5,541,815 | £15,517,081 |
Average number of AML/ID checks per transaction sourced from Credas Technologies.
Transactions over the last 12 months sourced from Gov.uk – UK House Price Index.
Cost of an individual AML/ID check sourced from AccManager.
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