Fewer foreign buyers are purchasing property in the UK, anti-money laundering data suggests.
The property market has been hampered in recent years by Brexit and the pandemic travel restrictions as well as recent sanctions on wealthy purchasers such as Russian oligarchs.
That appears to now be showing up in AML checks.
Data from AML platform Credas Technologies suggests the market activity accounted for by foreign buyers has been in slow decline since 2018, with non-British applicants accounting for just 36% of all checks carried out in 2021 – a record low.
So far in 2022, foreign buyers have accounted for just 38% of all AML checks.
In 2018, foreign buyers accounted for 56% of all AML checks, falling to 53% in 2019 and again to 50% in 2020, according to Credas Technologies data.
At the same time, the number of foreign buyers being approved during the AML compliance process has also declined, the figures show.
Last year, non-British applicants accounted for 35% of all those being approved, down from 50% the previous year and 54% the two years prior.
While foreign buyers accounted for 62% of all applicants to have been flagged for AML compliance issues in 2021, this too was the lowest proportion of all flagged applicants seen since 2018.
Tim Barnett, chief executive of Credas Technologies, said: “The proportion of AML compliance checks attributed to non-British applicants hit a record low in 2021, but the latest data suggest that this trend could be starting to reverse in 2022.
“Of course, a combination of Brexit and the more recent pandemic travel restrictions will have stifled market activity from foreign nationals. However, this decline is down to an overall increased level of AML compliance rather than a decline in foreign demand per se.
“Since 2018, the number of AML checks performed on foreign nationals has actually increased by nearly 3,200%. But at the same time, checks performed on domestic buyers have also climbed by over 7,550%.”
Barnett suggests these figures show a greater attention is being paid to AML responsibilities by agents.
He added: “While the data shows that non-British applicants are far more likely to be flagged when checked, it’s reassuring to see that these checks are being carried out across the board.
“This is undoubtedly a result of advancements in AML technology and today, we’ve streamlined this process to less than a minute. In doing so, we’ve enabled the industry to be as diligent when it comes to domestic AML compliance as they have been traditionally with those from outside of Britain.”