What's it
all about?

This campaign is based on data from a new report Corruption on your doorstep: How corrupt capital is used to buy property in the UK published by Transparency International UK in March 2015. You can download the report here.

The campaign is part of a global initiative across the Transparency International movement which aims to end the secrecy that enables the shifting of corrupt funds across borders. From Malaysia to Brazil, Switzerland to Russia, South Africa to here in the UK, corruption fighters around the world are asking their governments to Unmask the Corrupt by:

  • Ending company ownership secrecy
  • Regulating luxury investments (including property)
  • Denying entry at borders

For the first stage of our campaign we decided to focus on property as it was identified in our research as a sector particularly vulnerable to money laundering here in the UK. It is part of a wider piece of research due for publication later this year which will examine a number of other sectors used to launder the proceeds of corruption, such as private education, sports clubs and PR agencies.

Top
Statistics

Money laundering

The total amount of money and assets laundered worldwide in one year is estimated to be between US$800bn and US$2trillion (The United Nations' Office for Drugs and Crime, 2014)

It is estimated that at least US$1 trillion is being taken out of developing countries each year through a web of corrupt activity that involves the use of anonymous shell companies, money laundering and illegal tax evasion. 3.6m Deaths could be prevented each year in the world's developing countries if action is taken to end secrecy that allows corruption and criminality to thrive and the recovered revenues were invested in health systems (The ONE campaign, 2014).

1,400 financial services firms in the UK and over 250 foreign banks which is more than any other country in the world (The Financial Times, 2015).

The Financial Services Authority (FSA) estimated that every year between 23bn and 57bn was being laundered within and through the UK, which corresponds respectively to 1.4% and 3.6% of the national real GDP for that year (FSA, 2015).

Property

180m+ worth of property in UK has been brought under criminal investigation as the suspected proceeds of corruption since 2004. Over 75% of these properties use offshore corporate secrecy (Transparency International UK, 2015)

The average price of a property under criminal investigation in the UK is 1.5m. The minimum is 130,000, the maximum is 9m and the median is 910,000. Whilst 48% of properties investigated were valued at over 1m (Transparency International UK, 2015).

36,342 properties London properties totalling 2.25 sq miles are held by offshore haven companies (Transparency International UK, 2015). Of these, 38% in the British Virgin Islands, 16% in Jersey, 9.5% in Isle of Man, and 9% in Guernsey

Almost one in ten properties in the City of Westminster (9.3%), 7.3% of properties in Kensington & Chelsea and 4.5 per cent in the City of London are owned by a company registered in an offshore haven (Transparency International UK, 2015).

In 2011 alone, 3.8bn worth of UK property was bought by British Virgin Islands-registered companies (Transparency International UK, 2015).

In 2013-14, estate agents contributed to only 0.05% of all Suspicious Activity Reports (SARs) submitted. This figure is not equal to the risks posed by money launderers to the UK property market (Transparency International UK, 2015).

According to a 2013 Savills report, 90% of new-build luxury properties were purchased by overseas buyers (Savills World Research, 2013).

Out of 76 properties sold at One Hyde Park for a total of US$2.7bn, almost 80% were brought through anonymous companies registered in tax havens. Only 12 properties were registered in the names of individuals (Vanity Fair, 2013).

More than 700 'ghost mansions' worth approximately 3bn lie uninhabited in London. (Evening Standard, 2014)

350m worth of vacant properties lie on a single prestigious London street in Hampstead (The Guardian, 2014).

At least 122bn worth of property in England & Wales was held via companies registered in secrecy jurisdictions in July 2014 (Financial Times, 2014).

Out of 91,248 foreign company-owned properties in England and Wales, nearly two thirds are held via the British Virgin Islands and Channel Island structures (Financial Times, 2014).

July-September 2014 British Virgin Islands-based firms were engaged in 110 deals worth US$10.99bn (Compass Cayman, 2014).

350,000 purchasers of UK property in 2013 were cash buyers. 70% (245,000) were not funding their deal through the sale of another property (Hamptons, 2014). The term cash buyer may refer to both those buyers who are not funding the purchase through a mortgage and those who are purchasing with cash. In either scenario, the Anti-Money Laundering checks provided for by the UK financial sector may be bypassed.

Other
resources

Still hungry for more? Not to worry — we are good at evidence based policy work, and in-depth (slightly nerdy) research. Do your homework here:

TI-UK

TI Global

Media reports

Get
in touch

We want to hear from you! Let us know what you think about the issue by:

Are you a journalist?

We are keen to collaborate with journalists interested in the issue of the laundering of corrupt proceeds in and through the UK, particularly those doing investigative work. For more information email alice.mccool@transparency.org.uk.

Are you a student, academic or researcher?

We encourage masters and PhD students, research programmes, and public and private sector researchers to further investigate the topics we work on. Our Anti-Corruption Research Network is an information hub for researchers who are either based in the UK or focused on UK corruption issues. You can view the current list of research topics here. For more information email nick.maxwell@transparency.org.uk.