More than one in seven buyers using funds from overseas to help finance their purchase

Our Source of funds tool allows buyers to quickly and securely provide information and evidence relating to the funds being used to purchase a property. Via the secure app, buyers complete a flexible questionnaire, which captures information relating to their funds including common types such as mortgages, savings and gifts as well as less common examples like cryptocurrency. Buyers are then prompted to provide documentary evidence to reduce the back-and-forth between professional advisors and their clients. Finally, buyers are asked to provide bank statements using open banking, instantly providing the data and insights professional advisors need to help them verify their client’s source of funds.

As part of the report we provide our clients, we analyse the data submitted by buyers and highlight common red flags that appear in their funds. This includes:

• If more than three cash deposits have been made in the past six months.

• If the buyer has received a gift to help fund their purchase.

• If any funds have come from high-risk third countries.

• If any of the funds have come from overseas.

• If the median value of the cash deposits made to the buyer’s account is in excess of five hundred pounds.

• If cryptocurrency is being used to help fund the purchase.

• If the buyer’s declared savings exceed the savings in their account.

• If the buyer is not using a mortgage.

We monitor the Financial Action Task Force’s (FATF) list of High-Risk Third Countries (HRTCs) and will flag to clients when funds are coming from these countries, indicating cases where enhanced due diligence is necessary. Data from our Source of funds tool shows that a much smaller proportion, less than 2%, of purchases use funds coming from jurisdictions that appear on FATF’s list. The HRTCs the data most commonly shows funds coming from are:

1. Turkey

2. Argentina

3. South Africa

4. Vietnam

5. Nigeria

Funds coming from overseas are not necessarily indicative of money laundering, but depending on other factors relating to the transaction, regulated businesses may need to request additional supporting evidence. By using Thirdfort’s Source of funds tool, our clients can ensure that they do not miss these red flags and that additional, relevant, evidence is gathered whilst the consumer is completing their questionnaire.

A version of this article originally appeared on Property Industry Eye.