British homes 'bought up by dirty money'
Estate agents are struggling to enforce anti-money laundering regulations, research suggests
British property has long been popular among international investors, but a new report suggests that homes across the UK are in danger of becoming a "haven for dirty money".
More than £122bn dollars worth of property in England and Wales is held by companies registered in off-shore tax havens, the Financial Times has revealed.
The findings underline fears that British housing in general, and London property in particular, "has become a haven for dirty money from around the world," the FT says.
"Property is a key risk area for the UK," Robert Barrington, executive director of Transparency International UK, told the paper. "From Abacha to Marcos and the Gaddafis, corrupt leaders have used shell companies and trusts to hide their identities and safeguard stolen fortunes, often in property."
The findings also reveal the full scale of offshore property ownership. Nearly two thirds of the 91,248 foreign-company-owned properties in England and Wales are linked to the British Virgin Islands and Channel Islands, the report said. The majority of such property is in London, and 27 per cent by value can be found in Westminster alone.
Regulations designed to prevent money laundering oblige estate agents and solicitors to carry out due diligence when making a sale. But while land registry records can identify the company holding a property, it can be difficult to determine who is the ultimate owner.
"When you have a company hidden offshore, it is I think almost impossible for your average estate agent to find out what on earth is going on," says Peter Bolton King, global residential director at Rics. "You have to make a professional judgment whether you are satisfied with the information that you are provided with."
The FT report notes that the late Libyan dictator Muammar Gaddafi's son Saadi owned a "trophy house" in central London valued at £10m, and that one of the most prized houses in London – Witanhurst, a 65-room mansion overlooking Hampstead Heath – is also owned by an offshore consortium registered in the British Virgin Islands. ·