The National Crime Agency said that foreign criminals who launder their money by purchasing expensive properties in London are responsible for pushing up house prices in the UK capital.
Donald Toon, the agency’s director of economic crime command, told the Times:
“I believe the London property market has been skewed by laundered money,”
“Prices are being artificially driven up by overseas criminals who want to sequester their assets here in the UK.”
He added:
“What they are doing is distorting the market.
“If [estate agents] have a suspicion that there may be money laundering involved, then they absolutely should be submitting a suspicious activity report.
“You are at risk of committing a criminal offence if you do not do that.”
Property prices in London are being driven up because of laundered money.
Instead of individuals buying homes in the area, many are bought up by companies, trusts and investment funds. Essentially this means that criminals are using corporations, usually based in offshore tax havens, to hide ownership of their assets from authorities.
In the past three months the Treasury has made approximately £150 million from a tax on properties purchased by companies, trusts and investment funds, as opposed to individuals – which backs up Mr Toon’s claim.
When the tax was first in operation in 2013/14, it raised £100m from 3,990 houses, with London’s most expensive boroughs – Westminster and Kensington & Chelsea – accounting for 80 percent.
According to the National Crime Agency (NCA), billions of pounds are laundered in London on a yearly basis, and investigations are intensifying into the matter.
The London property market is one of the expensive in the world, and prices in the city climbed up by 9.8 per cent year-on-year in June.