07/11/22

UK: More than 138,000 properties in England and Wales owned by offshore companies, according to research.

As published on theguardian.com, Monday 7 November, 2022.

More than 138,000 residential and commercial properties in England and Wales are owned by offshore companies, with holdings in London worth a combined £55bn, according to research shared with the Guardian.

The findings come as the government begins a crackdown to dismantle the secrecy that surrounds offshore property ownership, which it says has been used by “corrupt elites laundering money through UK property”.

The land registry lists about 94,000 property titles as owned by offshore companies, but many titles include multiple properties on a single plot. By counting all of the properties owned, researchers have found an additional 44,000.

The research was conducted by the Wealth Chain Project, which works to highlight the impact that property investment via offshore tax havens has on socio-economic inequality.

“Each title owned by offshore companies includes, in reality, about 1.47 properties on average,” the researchers said in their report Tax Haven Money in London’s Real Estate.

Rex McKenzie, the lead researcher and a lecturer at Kingston University, found a total of 95,000 residential properties in England and Wales are registered to offshore owners. Almost half of these – 42,543 – are in London, and concentrated in the most expensive areas.

In the City of Westminster, which includes the central London areas of Mayfair, Knightsbridge and Belgravia, there are 9,066 offshore-owned residential properties, and a further 5,453 in the Royal Borough of Kensington and Chelsea, according to the Tax Haven Money in London’s Real Estate report.

The research estimates the average offshore-owned property in London is worth £1.33m, taking the total value of all offshore property in the capital to in excess of £55bn.

“The billionaires and millionaires who use offshore services to buy houses are part of a transnational wealth elite that includes the world’s oligarchs, super-rich, kleptocrats, tax dodgers and criminals,” McKenzie said. “Perhaps for this reason London’s residents and the general public associate the lavish mansions of Kensington and Westminster with Russian oligarchs and kleptocrats.”

Under new rules, overseas entities that own UK property must register with Companies House and provide details of their true beneficial owners by 31 January 2023. However, only a handful more than 1,000 had declared their true owners by the end of September according to a review by moneylaundering.com.

The rules came into force on 1 August as part of the Economic Crime (Transparency and Enforcement) Act 2022, and were fast-tracked following Russia’s invasion of Ukraine and the introduction of sanctions against oligarchs.

The then business secretary, Kwasi Kwarteng, promised that the new legislation would have an “immediate dissuasive effect on oligarchs attempting to hide their ill-gotten gains, ensuring that the UK is a place for legitimate business only”.

A spokesperson for the Land Registry said: “The dataset of Overseas Companies that Own Property in England and Wales contains registered titles, not the number of buildings contained within those registered titles. HM Land Registry registers land under a unique reference (the title number) rather than individual buildings on that land, so there may be more than one structure contained within a registered title.”