Money laundering has been a hot topic recently since the channel for documentary ‘From Russia with cash’ a few weeks ago. The Labour housing spokesperson on the London Assembly Tom Copley, has said that estate agents and Mayor Boris Johnson should take the matter in property more seriously.
Recent studies by global pressure group Transparency International advises that over 36,000 London properties are held by companies operating in offshore tax havens.
Copley has said on Left Foot Forward, a political blog that “Owing to the secretive nature of these havens we know very little about the true owners of the properties or, just as importantly, where the money used to purchase them came from to begin with”
He adds “Evidence shows that the average price of a property under criminal investigation in the UK is £1.5m with some worth up to £9m. It’s clear that criminals are targeting the most expensive properties to harvest their ill-gotten gains.”
He thinks that there is a knock-on effect for ordinary Londoners, as residential prices rise as a product of demand from the offshore purchasers.
He has claimed that concerns have been raised in the past about money laundering, but were brushed off by Johnson – “When we asked him what he thought of the Transparency International report on money laundering he said it “asserted that it was ‘likely’ that that there was a link between ‘corrupt capital’, overseas investment and rising house prices but did not produce any evidence to suggest the nature and scale of any such relationship.”
Copley is also suggesting that the prime minister disagrees with Johnson’s assessment of the problem. David Cameron last week called for the Land Registry to make offshore ownership details much more transparent.
Copley has said that “Publishing details of foreign companies investing in property is a good start but we really need to see increased efforts to identify and prosecute offenders, as well as pressure put on estate agents to carry out more thorough checks when selling top-price homes”.