A minister from the UK government has committed to addressing the challenges faced by letting agents because of the actions taken by banks regarding pooled client accounts. The issue involves the closure of numerous accounts or the reluctance of banks to open such accounts, citing violations of anti-money laundering (AML) regulations that have been introduced and reinforced in recent years. Many letting agents have argued that banks, by their ability to possess the flexibility to ease AML vetting procedures, should facilitate pooled accounts. Several banks have contested this statement.
The situation aptly captures the broader tension between letting agents and financial institutions regarding the interpretation and application of AML rules in pooled client accounts.
The ministers pledge indicates a recognition of the importance of finding a balanced approach to the problem. A solution that ensures compliance with AML regulations while addressing the operational needs of letting agents must be quickly found and implemented. This move by the Conservative MP, Kelly Tolhurst, has attracted the attention of the UK parliamentary attention. During a parliamentary debate, Tolhurst highlighted the concerns raised about this issue.
A leading bank allegedly issued a threat to a letting agent, signalling potential account closure if they persisted in utilising pooled accounts. Tolhurst elaborated on the consequences, noting that the property agent in question was compelled to establish and maintain individual client accounts for the rents and deposits of each landlord they served. This was particularly impactful as the agent reportedly managed the financial transactions for a substantial portfolio of over 100 landlords.
The incident underscores the real-world implications of the banking sector's stance on pooled accounts, revealing challenges property agents face in navigating regulatory requirements and operational efficiency. The persistent advocacy efforts led by Kelly Tolhurst and various industry organisations have resulted in significant development.
Andrew Griffith, the Economic Secretary to the Treasury, addressed the Commons, affirming that banks can apply simplified due diligence to pooled client accounts. This can be done particularly in cases where they believe the risk of money laundering and terrorist finance is low. Griffith stated that the claim that pooled client accounts are ineligible for simplified due diligence was inaccurate.
Andrew Griffith also acknowledged the need to comprehensively examine how anti-money laundering procedures can be improved and reformed. Griffith highlighted the unintentional consequences of existing regulations. He expressed the belief that a harmonious balance between regulatory compliance and operational efficiency could be achieved through improved guidance, greater clarity, and adjustments to the existing regulations if needed. This statement indicates a commitment to addressing the challenges faced by letting agents and recognising the importance of refining the regulatory framework to serve the industry better.
Leading trade bodies have come up with alternative solutions, such as using a CASP or a Client Accounting Service Provider for those unable to find a bank willing to open a pooled client account for their business. CASP is a third-party entity responsible for the management of client assets on behalf of the agent.
Mary-Anne Bowring FIRPM FRICS FARLA FCABE Founder/Head of Asset Management
Strategic partnerships, holistic delivery/ opportunities, growth, value engineering, thought leadership
Ian Barber MD BTR Mobilisation & Leasing
Runs HQ & site lease-up teams. Drives rent pricing, mobilisation, marketing, happy residents!
Jon Curtis MRICS Head of Building Engineering
Chartered Building Surveyor. Lectures on EWS1 & building safety. Runs CapEx programmes.
Kate Robinson MIRPM MD Blocks/FM Management (London Region)
Master plan setup, ops and staffing and resident engagement. ISO45001 champion.
Lee Harle Partner Ringley Law
Plot conveyancing. Debt litigation. Group Company Secretary.
Anthony Kingdon MIRPM AssocRICS MD Blocks/FM Management (North Region)
Stakeholder engagement. Mixed tenure specialist. Budget management. Plant audit, PPM compliance.
Chris Georgalis MRICS Head of Commercial Valuation
Chartered Valuer. Rental valuations: retail, leisure. IRR modelling and valuations for secured lending. Compulsory purchase & rent reviews
Nichola Pughe MRICS Head of Residential Valuation
Chartered Valuer. Rental development & mixed use valuations, IRR modelling. Leasehold enfranchisement specialist
Libby Chen MSc Compliance Manager
Operational Plant & Equipment strategy PPM Compliance lead, Asset tagging Client major projects
Dipesh Parekh Director PlanetRent
Customer centric, vertically integrated PropTech/fin-tech solutions.
Leana Aristodemou MIRPM MARLA AssocRICS Strategic lead: ESG & Asset Business Plan delivery
Financial modelling, valuation analyst to support underwriting & fund reporting.
Natalie Birmingham Helpdesk Support Manager
Trainer & Helpdesk Manager: people, systems,contractors. ISO45001 supply chain accreditation.
Steve Norman Planning Director
Land due diligence (opportunities & constraints) Has contributed to a number of award winning schemes.