As published on estateagenttoday.co.uk, Monday 7 February, 2022.
The Mayor of London, Sadiq Khan, wants the government to put a stop to the capital being used for international money laundering.
He’s urging ministers to draw up a register of UK properties owned by overseas individuals and companies, which could be sheltering billions of pounds worth of undeclared funds.
Khan claims the government’s failure to deliver on the promise of a register of overseas property ownership is leaving those with strategic links to Russian leader Vladimir Putin with places to hide in London and around the country.
Many of these properties in London are also left empty and unused.
Approaching 250,000 properties in England and Wales are now registered with overseas-based buyers, a figure which has swelled from fewer than 88,000 in 2010.
London now accounts for 85,451 property titles held by foreign individuals or companies.
As of early this month, Land Registry data collated by Transparency International recorded 41,631 offshore companies holding assets in the Greater London area.
The authorities are aware of properties owned by some allies of Putin, but the lack of transparency in the current system means that it remains unclear who owns thousands of properties in the capital.
The Mayor says he fears that a lack of transparency in the legal and beneficial ownership of companies and individuals who own UK property could be aiding offences such as tax evasion and money laundering, as well as hiding the assets of those who would come under any possible sanctions regime.
The Mayor’s call comes following an unsuccessful attempt last week by a cross-party group of MPs to compel the government to take the first step towards setting up a register, by amending the Finance Bill currently passing through Parliament.
The amount of illicit and undeclared money invested in Britain is notoriously hard to track.
In 2016, the government put the amount of corrupt money flowing into the UK at £100 billion a year. Pressure group Transparency International have claimed to have identified property worth £1 billion bought with suspect funds from Russia alone.
Khan says: “For far too long ministers have turned a blind eye to the use of our capital city as a safe harbour for corrupt funds, which is having a negative impact on both our international reputation for transparency and our local housing market.
“The truth is that property in London plays a central role in harbouring illicit funds from around the world, which also results in many properties being left empty and unused at a time when many Londoners are struggling to afford a home to buy or rent.
“The government’s refusal to introduce a register of overseas owners of UK property undermines our economic security. I have spent the last seven years pushing for more to be done on this issue, in the firm belief that sunlight is the best disinfectant.
“The slow pace of progress on this issue has been bitterly disappointing – and it will prevent the government acting on their tough talk about further sanctions if they are imposed on Putin’s regime.”