NEXT time you want to sell a house, don’t be surprised if your estate agent asks to see some form of identification.

It’s all part of new legislation which came into force on March 1, designed to reduce money laundering.

Money laundering is the disguising of illegally obtained money so that it appears to have come from a legitimate source and property investments are an easy way of doing this.

Until now, regulations have applied to those who arrange mortgages or offer investment advice. Now, the new Money Laundering Regulations mean that estate agents are among hundreds of businesses which will be obliged, for the first time, to establish the identity of clients.

The new laws are also designed to promote market confidence and consumer protection, says group managing director of Ward & Partners, David Lench.

He said: “At the end of the day, clients prefer to use a firm which they know will not be used, even unknowingly, for money laundering.

“In fact, you should be concerned if the estate agent you are dealing with does not ask for identification, as the company is, in effect, breaking the law.

“The larger, reputable, well established companies have a high awareness of the new regulations and will act in accordance with them.”

Failure to comply with the laws, in a worst case scenario, could lead to a prison sentence of at least two years and/or a fine for responsible senior managers.

Money laundering, the world’s third largest business, is estimated at a staggering $500 billion annually worldwide, with the biggest source of illicit profits coming from the drugs trade.

The new regulations also apply to property auctions, so take ID if you are attending a sale. In this instance the laws affect both buyers and sellers so identification needs to be provided by buyers on the day of the auction.

ID must show name, address, nationality and date of birth - estate agents need to identify both individuals and where they live. As there is no single form of official ID in the UK, you may need to produce a combination of forms of ID.

Acceptable forms of ID include a passport or full driving licence with photo, or:

* birth certificate

* benefit book

* council tax bill for the current year

* firearms certificate

* reference from doctor, solicitor or minister of religion

* Documentary evidence of address includes:

* mortgage statement for the current year

* council tax bill for the current year

* check on the electoral roll

* utility bill