December 05, 2016
Foreign Ownership of London Property Shrouded In Secrecy
London – Wealthy individuals from overseas are continuing to be able to buy up London property anonymously, according to “London property: A top destination for money launderers,” new research by Transparency International UK and Thomson Reuters.
Using multiple data sources, researchers found that there was no data available on the real owners of more than half of the 44,022 land titles owned by overseas companies, whilst nine out of ten of these properties were bought via secrecy jurisdictions, such as those named in the Panama Papers.
This lack of data means it is extremely difficult to ascertain any links between these companies and any individuals with political influence (Politically Exposed Persons, or PEPs), who Transparency International believe cause the greatest corruption risk. Research found 986 land titles owned by PEP related companies, although the true number could be much higher. More than three quarters of these companies are registered through either Panama or the British Virgin Islands.
The UK Government has committed to a public register of foreign companies purchasing UK property by April 2018 that should help shed light on who owns London property. But it is possible that between now and then, individuals looking to hide money in the UK could find new avenues to remain anonymous.
Rachel Davies, Head of Advocacy, Transparency International UK said:
“Despite the global scandal of the Panama Papers, London’s property market continues to be a safe haven for corrupt individuals, through anonymous ownership. Commitments made by the Government are positive, but this new research underlines the danger if the promising words don’t turn swiftly to action.
“Londoners are right to be concerned that whilst the red carpet is rolled out for the corrupt elite, the capital is suffering from a housing crisis in which homes are becoming increasingly unaffordable. It’s clear that a transparent system, based on conclusive and publicly available data, is necessary to unmask the corrupt individuals using Britain to hide their criminality.”
Phil Cotter, Managing Director, Risk and Supply Chain, Thomson Reuters, said:
“The analysis of data to find evidence of links to corruption is proving to be one of the 21st century’s most effective weapons against crime. Of course what that means is that people determined to preserve their anonymity will try ever harder to ensure they don’t leave any footprints in the data.
“We worked with Transparency International, combining our World-Check data with publicly available information using PermID – a unique reference for each piece of information in the research – to shed light on who really owns land and property in London. But the real surprise was how little information was available, and how difficult it is to find out who exactly owns some of London’s prime land and property.”
Key statistics in the research include:
- 44,022 London land titles are owned by overseas companies
- 91 percent of overseas companies owning London property through secrecy jurisdictions
- Over 75 percent land titles identified as linked to PEPS are owned by companies based in Panama or the British Virgin Islands
- Only 54 percent of companies in the Land Registry could be matched to a company record through the datasets used
- 986 land titles found to have links to PEPs
- 52 percent of land titles owned by anonymous companies in London were in the City of Westminster (31 percent), Kensington and Chelsea (16 percent) and Camden (5 percent).
This report will be presented at the Open Government Partnership Conference in Paris on Tuesday 6th December.
Transparency International UK
Transparency International UK challenges corruption and fights for a fair society based on the rule of law. We work to change and strengthen the system so that those with power cannot abuse it for private gain, and democracy and justice cannot be undermined by corruption. As the UK chapter of Transparency International, we stand together with colleagues in over 100 countries to demand an end to corruption at home and abroad.
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