Some 40% of properties owned by anonymous firms based in tax havens are in the UK capital, analysis from international NGO Global Witness has found.
This has served to push prices up by £11,000 in London, according to ani-money laundering firm SmartSearch.
More than 87,000 properties in England and Wales are now owned by anonymous firms based in tax havens, with an estimated collective value exceeding £100 billion.
Since 2016 alone, over £11 billion in suspicious wealth has flowed into UK real estate—more than half via shell companies registered in British Overseas Territories.
Phil Cotter, chief executive of SmartSearch said: “The UK property market is one of the most vulnerable sectors to financial crime, because of the high values involved and the ability for companies to buy, own, and sell property with minimal scrutiny.
“This allows criminals to exploit loopholes—like purchasing through anonymous shell companies—to clean their money. These buyers often pay inflated prices to secure quick deals, which in turn distorts the entire market.
“In some prime areas of London, dirty money has inflated prices by up to 20%, pushing first-time buyers and local families out. In boroughs like Westminster and Kensington & Chelsea, offshore buyers have created so-called ‘lights-out streets’, where luxury homes sit empty while local communities suffer.”
Too many estate agents are failing to act
Estate agents are the first line of defence in stopping property-related money laundering. But SmartSearch warns that many are falling short of their legal obligations.
Recently, nearly 200 estate agents were fined over £1 million for breaches of anti-money laundering (AML) regulations—mostly for trading while unregistered.
Cotter added: “If estate agents don’t take their anti-money laundering responsibilities seriously, the UK property market will remain a magnet for dirty money.
“With thousands of agents still unregistered or failing to carry out even basic checks, we’re allowing criminals to distort the market—and its ordinary people who are paying the price.
“We recognise the pressures estate agents are under, which is why we’re committed to helping them navigate AML regulations and protect all involved.
“These regulations are not a burden, but a vital tool to stop criminals from distorting our market.”