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Banks Closing Pooled Client Accounts - agents urge government action

Propertymark is urging the government to tackle the problem of banks closing down undesignated or pooled client accounts of letting agents.

HM Treasury has published a consultation on improving the effectiveness of the Money Laundering Regulations 2017, which place requirements onto businesses including the property sector, to identify and prevent money laundering and terrorist financing.

The consultation covers four core themes including making customer due diligence more proportionate/effective, and providing clarity on the scope of Money Laundering Regulations.


In August last year, Propertymark wrote to the Chancellor highlighting concerns from agent members relating to banks closing undesignated or pooled client accounts of letting agents. 

And in October Kelly Tolhurst MP outlined issues from agents and other sectors in Parliament at a Westminster Hall debate on business banking and Pooled Client Accounts. 

Then in November, Propertymark met with officials at HM Treasury at the request of Baroness Penn, Treasury Lords Minister, to raise ongoing concerns. Case studies and examples from Propertymark members were put to officials as well as solutions to resolve the situation.

Now Timothy Douglas, Head of Policy and Campaigns at Propertymark, says: “After months of lobbying the UK Government, we are pleased to see this consultation and the potential for improved access to Pooled Client Accounts for letting agents who are not fully supervised by HMRC for anti-money laundering. 

“Propertymark members across the country have been impacted by banks closing undesignated client accounts as a result of financial institutions not fully understanding the legal requirements for letting agents to adhere to the Client Money Protection rules. 

“Clarifying Simplified Due Diligence processes, as well as reducing the threshold requirements for letting agents to comply with the anti-money regulations and register with HMRC for anti-money laundering supervision, will help reduce a barrier that can make it hard for estate agents and letting agents to operate. We urge the UK Government to listen to the concerns of the sector and make changes that support letting agents and allow them to meet their legal responsibilities.”

Earlier this week we reported that Tory MP Harriett Baldwin - chair of the all-party House of Commons Treasury Committee - had written to major banks’ chief executives, asking for the specific number of SME business accounts held by their organisations, and if possible, a break-down by business sector including property businesses; the number of accounts closed at the instigation of their organisation for the year to date, and the proportion of those that were SME business accounts; and the reason for the closure of the accounts.

In the UK, letting agencies are required to hold rent money in a client account, where the money is protected. Without a valid client account operated by an FCA-regulated bank or business society, a letting agency cannot legally operate or take out a client money protection policy, which is a legal requirement in England, Scotland and Wales.

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    It's about time, it's being going on for years.

  • Keith Russell

    "Not fully supervised by HMRC" I thought this was mandatory for letting agents?

  • Hit Man

    If all letting agents just register with HMRC for AML then they won't have a problem.


    WRONG! 😠HMRC will not supervise if you don’t meet their criteria so, Lloyds at least, won’t allow you to hold monies in a non-designated client account. That prevents you from having CMP, which prevents agents from trading! 😡

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    I'm confused by what they mean by 'undesignated' or pooled accounts. All our residential rent is paid into one account (named, imaginatively, Residential Rent Client), which we then send to the Landlord. Are they meaning each Landlord has to have their own named account under the Agent's name? cause I foresee issues... Each aspect of our business has it's own named account so only rent would go in to that one, fees into the office account etc, so it never mixes.


    Yes, Lloyds tried to make us have a DCA (Designated Client Account) for each landlord. Landlords then had to complete a form and they even questioned one who was a Fellow of the Law Society. Eventually Virgin Money agreed to take us on.

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    Griffin bank have now launched a new service for this solution with LettsPay already plugged into it

  • Michael Day

    There is a working solution in the marketplace via Lettspay and Griffin Bank that meets all risk and CMP requirements.

    The traditional and major banks have largely not wanted to change their view of risk and, despite recent noises about accepting that many letting agents do not need to be registered with HMRC for AML compliance, have still stuck to their views on this being a high risk arena.

    I therefore question whether lobbying and consultations will get to an acceptable solution within a sensible timeframe. Not suggesting it shouldn't continue - Rome wasn't built in a day - but we are several years along the line already and there is the alternative solution already in the market.

    It might take that competition to better bring the banks to an acceptable solution or, as they seem to be doing via the "back door" look to lose the lettings sector as business they no longer wish to have.

    In the meantime, agents remain at risk of losing their undesignated client accounts and, possibly, their ability to trade.

    Keith Russell

    I am intrigued by where you say many letting agents do not need to be registered with HMRC for AML? are you saying some are exempt? my firm was fined several thousands for not being registered where I am not embarrassed to say this was through lack of knowledge. However, the annual fee payable to HMRC for providing nothing valuable to me just appears to be another stealth tax for the aspirational.


    Keith, from the government website:
    "When you do not need to register

    You do not need to register if you’re a lettings agent only carrying out lettings work that is not defined within the regulations, for example, below 10,000 euros rent per month."

    That is you have individual rents that are 10,000 euros or more.

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    THERE IS NO BUSINESS in the UK that government can't make ten thousand times worse


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