There is no data available on the real owners of more than half of the 44,022 London land titles owned by 23,653 unique overseas companies, with 91% of these properties being bought via “secrecy jurisdictions” (such as those named in the Panama Papers), according to a new report on the more shadowy bits of the London property market by Transparency International and Reuters.
The gist of the research, which looked into ownership structures of real estate titles across London boroughs, is that a “wealthy individuals from overseas are continuing to be able to buy up London property anonymously,” and that a majority of foreign firms which own London property are registered in the world’s more opaque tax jurisdictions. While such ownership structures may just be the result of sensible tax planning, campaigners are worried that more nefarious ends could be in play…
Only 54% of companies in the Land Registry could be matched to a company record (using the three main company databases).
The lack of data means it is extremely difficult to ascertain any links between these companies and any individuals with political influence (“Politically Exposed Persons”), who Transparency International believes cause the greatest corruption risk. Researchers found 986 land titles definitely owned by PEP related companies; more than 75% of these companies are registered through either Panama or the British Virgin Islands. They couldn’t, however, reliably determine whether properties owned were commercial of residential.
As might be expected, Prime Central London is a top location of choice for tax/publicity-aware/shy buyers; 52% of land titles owned by anonymous companies in London were in the City of Westminster (31%), Kensington and Chelsea (16%) and Camden (5%). The average value of land titles held by these companies was £1.9m, with the most expensive being worth over £86m.
It’s worth remembering that David Cameron has already come out swinging against this sort of thing, committing to a public register of foreign companies purchasing UK property by April 2018.
London’s property market continues to be a safe haven for corrupt individuals, through anonymous ownership
Rachel Davies, Head of Advocacy, Transparency International UK: “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: “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.”