A discrepancy between the amount of savings declared by a buyer and the amount shown on their bank statement is the biggest red flag in anti-money laundering checks, according to data from client due diligence platform Thirdfort.
Analysis of more than 415,000 completed Source of Funds (SoF) checks by the company revealed savings mismatches raised suspicions in 43% of cases. Gifted funds and purchasing a property without a mortgage were the second most common red flags, with 17% and 16% respectively.
Buying a home with funds from overseas triggered further investigations in 16% of cases, with high cash deposits the fifth most common red flag (7%).
The AML red flags reflect a range of factors, Thirdfort explained. Gifted deposits, mortgage-free purchases or overseas transfers represent structural funding characteristics, while others arise from discrepancies between declared and evidenced funds that require clarification before a transaction can proceed. In all cases, additional information or documentation is needed to satisfy regulatory obligations.
The data suggests that equity heavy transactions, gifting and internationally supported purchases continue to shape the UK market, Thirdfort said.
“Red flags don’t necessarily equate to wrongdoing, but they do require careful review,” Olly Thornton-Berry, co-founder and CEO of Thirdfort, said. “Some arise from complex funding structures, others from inconsistencies that need clarification.
“As we can see, property sales involve a lot of cash and increasingly have international connections. The pressure and complexity on professionals to verify sources of funds is growing. Having well-designed, digital checks makes sure that genuine deals can happen quickly while keeping firms protected from fraud and compliance issues.”