UK property 'a haven for stolen cash'
Corrupt money stolen around the world is finding a safe haven in the UK property market, campaigners said today.
Transparency International UK said the government needed to act quickly to make sure the UK does not become "the destination of choice for global corruption".
New research shows 36,342 London properties covering a total of 2.25 square miles are held by hidden companies registered in offshore havens, the organisation said.
The study, analysing data from the Land Registry and the 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.
Secret offshore companies
Robert Barrington, the organisation's executive director, said: "There is growing evidence that the UK property market has become a safe haven for corrupt capital stolen from around the world, facilitated by the laws which allow UK property to be owned by secret offshore companies.
"This has a devastating effect on the countries from which the money has been stolen, and it's hard to see how welcoming in the world's corrupt elite is beneficial to communities in the UK. It is astonishing that the UK has sleepwalked into this situation, and the government needs to act quickly to make sure that the UK does not become the destination of choice for global corruption.
"Some relatively simple measures would be a good start, such as the Land Registry requiring transparency over who owns the companies that own so much UK property."
The campaigners say more than £180 million of property in the UK has been brought under criminal investigation as the suspected proceeds of corruption since 2004. This is believed to be the tip of the iceberg. More than 75% of the properties under criminal investigation use offshore corporate secrecy.
Almost one in 10 properties in the City of Westminster (9.3%), 7.3% of properties in Kensington and Chelsea, and 4.5% in the City of London are owned by companies registered in an offshore secrecy jurisdiction.
More than a third of foreign companies holding London property are incorporated in the British Virgin Islands (13,831 properties). This is followed by Jersey with 14% (5,960 properties), the Isle of Man with 8.5% (3,472) and Guernsey with 8% (3,280).
Call for action
The campaigners make 10 recommendations for reform, calling for action from the government, lawyers and estate agents to ensure the property market is no longer a safe haven for corrupt funds.
The most important is that transparency should be established over who owns the companies that own so much property through making transparency a Land Registry requirement.
The Metropolitan Police (MPS) said the report shone a light on how the property market was exploited by corrupt officials to launder money stolen from civilians across the globe.
A spokesman said: "Investigating grand corruption is a complex process requiring protracted cross-jurisdiction work with authorities around the world.
"Working with non-governmental and civil society organisations is integral to improving understanding of the scale of the issue and tackling it. With this in mind, we contributed to the research for Transparency International's report.
"Since the MPS launched the Proceeds of Corruption Unit (POCU) in 2007, it has investigated ownership of 144 properties worth over an estimated £180 million. These sensitive operations are ongoing.
"The POCU currently has assets worth £88.5 million under restraint. It has confiscated £8.5 million, of which over £6 million relates to properties purchased in the UK. It has repatriated £1.27 million and continues to work on the repatriation of other monies.
"It can take years to unpick the layers of corruption and secrecy which ultimately result in the purchase of UK properties.
"Such properties are often owned by companies registered in foreign jurisdictions and while secrecy jurisdictions have been co-operative with our investigations, obtaining evidence can take years.
"We also face challenges in other forms. For example, relationships with some jurisdictions can be set back by a change in regime, and the influence of corrupt politicians on a country's own anti-corruption organisation can hamper access to crucial evidence.
"The MPS is committed to working with partners across the globe to overcome these issues, and we would welcome any regulation which makes it harder for corrupt officials to hide money that has been stolen from civilians across the world, in our own neighbourhoods."
Read more on AOL Money:
Benefits cheats vs tax dodgers: who's worse?
'Agoraphobic' benefits cheat jailed
The benefit cheats who stole £4.5 million of your money