Oligarchs must disclose identity as home owners

6th April 2017

The people behind anonymous companies that own billions of pounds of property must reveal their identities under new anti-corruption rules. The government published plans yesterday for a register of the identity of the owners of overseas businesses holding property assets here. The register, the first of its kind in the world, will identify the oligarchs, foreign government officials and overseas politicians who have used companies to buy expensive homes in London, affecting the property market. The National Crime Agency said the move would increase transparency in the market, especially the ownership of housing in central London, and help to trace criminal assets and tackle money laundering. Recent estimates claim that £122 billion of property in England and Wales is owned by foreign companies and that 160 properties worth £4.4 billion have changed hands in secretive transactions. Most property owned by overseas businesses is in London, with the greatest concentrations in Westminster, Kensington and Chelsea. A recent analysis of 14 new luxury developments in London found that 80 per cent of homes had been bought by overseas investors with 40 per cent acquired through suspicious or hidden wealth. Many of the property-owning companies are registered in offshore jurisdictions such as the British Virgin Islands making it impossible to determine who the real owners might be. The register meets a commitment made by David Cameron at the London anti-corruption talks last year. Margot James, the business minister, said that it would boost Britain’s reputation as an “honest and trusted place to do business”. She added: “The UK property market should be seen as fair, transparent and clean in order to attract the right investors and owners. Honest business should not fear that they are supporting criminal enterprise when investing in UK property.” The new register will also cover companies seeking government contracts worth more than £10 million. Ms James said, however, that because the register was a world first, and there was no model to follow, the government would “proceed cautiously, striking the right balance between improving transparency and minimising burdens on legitimate activity”. Robert Barrington, executive director of Transparency International UK, welcomed the initiative but warned that ministers “must not give way to vested interests that will be lobbying to keep property ownership secret or allow Brexit to delay the measure”. Mr Barrington added: “Knowing who owns houses and land in the UK is fundamental to preventing property being used as a safe haven for corrupt money. At present, if you are a UK company owning property, you have to declare your ‘beneficial owner’. It is a gaping hole that overseas companies don’t need to do the same.” Donald Toon, director for economic crime at the National Crime Agency, said: “Greater transparency over the true ownership and control of UK property held in the name of overseas companies will make the UK a less attractive place to launder money.” The National Association of Estate Agents said that the register would “set a gold standard for transparency and enhance the reputation of the UK property market as a place to do business”.