Over £70 billion worth of homes in England and Wales are now owned' by firms registered in off-shore tax havens - and that risks turning the countries into havens for dirty money from around the world according to an analysis by the Financial Times.
London is of course the capital of this kind of buying activity. "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 FT is told by Robert Barrington, executive director of Transparency International UK, a body monitoring global transactions.
Nearly two thirds of the 91,248 properties in England and Wales owned by foreign-based companies are linked to the British Virgin Islands and Channel Islands; most of the homes are in London, and 27 per cent by value are in the borough of Westminster alone.
The FT's research says that regulations designed to prevent money laundering theoretically oblige agents and solicitors to carry out due diligence when conducting a sale. But while the Land Registry states the title of the company holding 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," Peter Bolton King, global residential director at RICS, tells the newspaper. "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 London valued at £10m, and that one of the most prized houses in the capital - Witanhurst, a 65-room mansion overlooking Hampstead Heath - is owned by an offshore consortium registered in the British Virgin Islands.
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Comments
Of course. It's not a secret that most of the big time rugs and thiefs have all fled to London...
It almost certainly goes on, but it's hard to quantify exactly how much, and I'm not sure how you'd be able to put in successful measures to prevent it. Homes bought in tax havens like the Cayman Islands and British Virgin Islands are always likely to arouse suspicion, but sadly dirty money has always been around and it's going to be very difficult to completely eradicate it when it comes to property. Better regulation and stronger penalties would help, but I imagine it's pretty difficult to track the offending parties.
That's not altogether very surprising seeing as London is such an attractive city for foreign investors. But, it's up to the agents to do their research and decide whether or not someone is what they say they are. It might be hard to do when there is so much money to be made, but it just goes to show that money doesn't always make a good tenant or buyer.
I dread things like this happening. It's very difficult to track this sort of thing - it's a different business altogether!