6 Mar, 2015
FREE Download: Report Reveals How Corrupt Capital Is Used to Buy Property in the UK
London, 04 March 2015, (Transparency International) — It is well-known that the global rich are buying up large parts of London. But who they really are and where their money comes from is too often a well-kept secret. They use secret offshore companies to buy the properties and don’t disclose their identities.
These secret companies (or shell companies) are a common way for moving corrupt money around the world. They can hide money that corrupt politicians divert from investments in schools and hospitals and they can hide the proceeds of other crimes.
The corrupt are helped to buy properties by lawyers, accountants and estate agents who do not ask where the money is coming from – which by law in most countries, including the UK, they are supposed to do.
Today Transparency International UK is publishing Corruption on your doorstep: How corrupt capital is used to buy property in the UK. This investigation shows just how extensive the use of secret offshore companies is to buy property:
The research – analysing data from the Land Registry and Metropolitan Police Proceeds of Corruption Unit – found that 75% of properties whose owners are under investigation for corruption made use of offshore corporate secrecy to hide their identities.
Key statistics
(+) £180m+ worth of property in UK have been brought under criminal investigation as the suspected proceeds of corruption since 2004. This is believed to be only the tip of the iceberg of the scale of proceeds of corruption invested in UK property. Over 75% of the properties under criminal investigation use offshore corporate secrecy
(+) The average price of a property under criminal investigation in the UK is £1.5m. The minimum is £130,000, the maximum is £9m and the median is £910,000. 48% of properties investigated were valued at over £1m
(+) 36,342 London properties totalling 2.25 sq miles are held by offshore haven companies. Of these, 38% in the British Virgin Islands, 16% in Jersey, 9.5% in Isle of Man, and 9% in Guernsey
(+) Almost one in ten properties in the City of Westminster (9.3 per cent), 7.3 per cent of properties in Kensington & Chelsea, and 4.5 per cent in the City of London are owned by companies registered in an offshore secrecy jurisdiction. TI-UK has launched an interactive map of London which reveals the statistics for each borough – ukunmaskthecorrupt.org
(+) In 2011 alone, £3.8bn worth of UK property was bought by British Virgin Islands-registered companies
(+) According to the latest figures, which cover October 2013 to September 2014, estate agents contributed to only 0.05% of all Suspicious Activity Reports (SARs) submitted. This figure does not match the risks posed by money launderers to the UK property market
Transparency International makes 10 recommendations for reform, calling for buy in from the UK Government, lawyers, and estate agents to ensure that the UK property market is no longer a safe haven for corrupt funds. Action from the British Overseas Territories is also necessary to end this crisis.
The key recommendation is that transparency should be established over who owns the companies that own so much property in the UK through making such transparency a Land Registry requirement.
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