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Whether you’re setting up for the first time, expanding into lettings, or you’ve been given notice that your bank is closing your existing account, getting a compliant client account remains one of the most persistent operational headaches letting agents bring to us, and it isn’t limited to any one type of agency.
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What the law says
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Since 1 April 2019, every letting agent in England handling client money has had to belong to a government-approved Client Money Protection (CMP) scheme. Wales and Scotland got there first; CMP has been compulsory in Wales since 2015 and in Scotland since 2018, so England was the last of the three nations to catch up. Membership of a CMP scheme requires the agent to hold a ring-fenced client account, kept separate from business funds and used solely to handle and distribute deposits, rent and fees.
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Setting up a client account
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Any business can open a bank account and call it a “client account,” but that doesn’t make it one in the eyes of the law. A formal request must be made to the bank for a designated client account, with a clearly defined account name. The bank must provide written confirmation that funds in it cannot be taken, or moved, to pay business or personal debts. This is known as a Set-Off Letter, and it’s what makes the account compliant.
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Problems securing a client account
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If an application for a client account is rejected, it may simply be a case of “computer says no,” since applying is usually an automated process. In the first instance, contact the bank and ask why. It’s also worth reading the government’s guidance on money laundering supervision for letting agency businesses, since not being registered with HMRC for Anti Money Laundering (AML) supervision remains one of the most common reasons for being turned down.
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Money laundering registration
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Money laundering is a major concern for every bank, so an agent who isn’t registered for AML supervision is treated as a risk most aren’t prepared to take on. Even where the guidance suggests registration isn’t strictly required for your setup, register anyway. Combined with certification from a government-approved CMP scheme, AML registration gives a bank more confidence to grant a client account.
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What’s changing in 2026
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There’s a new, and more encouraging, development. The Money Laundering and Terrorist Financing (Amendment) Regulations 2026 became law on 9 June 2026 and took effect on 30 June 2026. Under the new rules, banks handling a letting agent’s pooled client account must properly assess the actual risk it presents, rather than treating it as automatically high-risk.
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It’s a regulatory acknowledgement of a problem agents have been raising for years, though it comes with no deadline forcing banks to change their internal policies, so don’t expect an instant shift if yours has been difficult. The same regulations also move the enhanced due diligence threshold for higher-value tenancies from €10,000 to £10,000 a month, a modest easing for agents at the top end of the rental market.
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Still stuck?
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We can open compliant client accounts for agents who use our services, and increasingly agents are choosing to outsource their client accounting altogether, removing the dependency on their own banking relationship entirely.
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