We all know that conveyancing is a known high-risk area for money laundering – criminals exploit property transactions, especially high-value or opaque deals, to wash illicit funds into the legitimate economy.
Recent analysis underscores the urgency: the UK remains vulnerable to money laundering, particularly from illicit proceeds generated overseas. The National Crime Agency notes that professional enablers, including law firms and estate agents, are regularly used to conceal and move criminal assets. Where there are large sum transactions, there are criminals making use of gaps in your organisation’s compliance controls.
In 2024, Spotlight on Corruption highlighted the involvement of corrupt foreign elites in property deals as ‘very high risk’. At Teal Compliance, we see first-hand how these trends play out, with conveyancing firms routinely handling large client-account transfers, third-party funders and anonymous offshore ownership structures. These are classic suspicious activity indicators that should make any compliance officer’s ears burn.
With regulators now on even higher alert, conveyancers and property lawyers must urgently refresh their AML controls and compliance culture.
You can view the SRA’s AML enforcement webinar from earlier in May here.
The SRA and Law Society both updated their AML guidance in April. Under the new framework, the Legal Sector Affinity Group (LSAG) guidance (now HM Treasury-approved official guidance) took effect on 23 April 2025. (Read Teal associate Rhiannon Davies’ key takeaways are here.)
The 2025 LSAG update introduces important changes (which Rhiannon explains in the above article). For example, the beneficial ownership threshold is now ‘more than 25%’ (removing the ambiguity of ‘25% or more’), and firms must assess for supply-chain money laundering risks.
Guidance has also been added on domestic politically exposed persons (PEPs) and on handling third-party contributions to clients’ source of funds. Even the definition of high-risk third country now maps to the FATF list.
In short, the rules are stricter and more detailed than ever.
What does this mean for your firm?
You need to update your firm-wide risk assessment and AML policies to reference the 2025 guidance. Document any changes in procedures and train your team on these updates – it’s no longer enough to rely on cached knowledge from the 2023 version.
Remember: the new LSAG rules are official and replace all prior versions.
- Key 2025 AML guidance changes: Updated beneficiary owner threshold to ‘>25%’; strengthened rules on supply chains and overseas entities; clarified third-party funding and domestic PEPs; and new sections on the Economic Crime Levy and mixed-property transactions.
- Required actions: Read the new LSAG guidance; update your risk assessment and policies to cite the 2025 version; train staff on the changes.
Warning signs in conveyancing
Conveyancers and property lawyers are already familiar with the risks property deals often involve – large sums flowing through client accounts are a prime money-laundering target.
The Law Society explicitly lists conveyancing among the ‘most likely to be abused’ AML services. Firms must explicitly reflect conveyancing risks in their risk assessments and CDD procedures.
Typical red flags in property transactions include:
- Rapid, repeated transactions on the same property: For example, a quick resale back and forth can be a money-laundering stratagem.
- Unexplained third-party or cash funding: When a buyer suddenly introduces large cash amounts or outside lenders without clear business reasons, it may be layering illicit funds.
- Complex ownership structures: Use of overseas trusts or shell companies to conceal who really owns the property is a common scheme.
- Sudden instruction changes: A retainer that flips on urgency (such as rushing funds before asking questions) or aborting transactions without clear reason can signal fraud.
Saba Janjua is an Associate at Teal Compliance
