Unscrupulous wealthy overseas property investors to be hunted out of UK property

Overseas wealthy property investors seeking to buy in the UK will find themselves under closer scrutiny as British Prime Minister David Cameron said steps will be taken against unscrupulous individuals and companies.

Although most of the foreigners and overseas based companies who invest in the UK property market, particularly the prime market in London, are legitimate buyers, there are concerns about a growing number using plundered or laundered cash.

Those under the spotlight will among those who invest in the expensive new build developments in top locations in London using anonymous shell companies that are non trading entities that exist to serve a particular purpose for their owners.

The crackdown needs to be part of a global effort to defeat corruption and money from criminal act getting into the system, Cameron said during a visit to Singapore. He stated that the UK must not become ‘a safe haven for corrupt money from around the world’.

More than 100,000 UK property titles are registered to overseas companies, with more than 36,000 properties in London owned by offshore firms, amounting to property worth about £122 billion.

Cameron said that the government will publish data from the official Land Registry data later this year setting out which foreign companies own land and property in England and Wales.

‘We know that some high value properties, particularly in London, are being bought by people overseas through anonymous shell companies, some with plundered or laundered cash,’ Cameron said.

He cited allegations last week of links between a former Kazakh secret police chief and a London property portfolio worth nearly £150 billion and also mentioned the case of a convicted Nigerian fraudster who owned properties in Britain.

‘I'm determined that the UK must not become a safe haven for corrupt money from around the world. We need to stop corrupt officials or organised criminals using anonymous shell companies to invest their ill-gotten gains in London property without being tracked down,’ Cameron added.

The sentiment was welcomed by Mark Hayward, managing director of the National Association of Estate Agents (NAEA). ‘We do not tolerate the behaviour of any estate agents who are involved in money laundering within the UK property market,’ he said.

‘We agree with the Prime Minister that our property market should never be a place that facilitates corruption of any kind. All agents should report any activities of such nature to HMRC or the National Crime Agency, and failure to notify them, or to allow money laundering activities to knowingly take place, is a criminal act,’ he pointed out.

‘Our members agree to abide by the professional standards that the NAEA has put in place, and we operate a range of sanctions to combat any breach of these strict standards. We are working closely with HMRC and the NCA in order to educate all of our members on the subject of money laundering, in order to fight against any such abuses in the UK property market,’ he added.