The Mayor of London has called for a register of overseas property ownership to crack down on London being used for international money laundering.
Properties in the capital owned by overseas individuals and firms could be sheltering billions of pounds of undeclared funds, Sadiq Khan said.
It comes as a report by cross-party MPs found that the UK’s law enforcement regime is not “up to the job” to prevent fraud and money laundering infiltrating the country’s financial system.
It is far too easy for criminals to clean dirty money through the UK and the government needs to urgently strengthen anti-money laundering defences, the Treasury Select Committee concluded last week.
Khan said the lack of a register meant that those with strategic links to Putin could find places to hide in London and elsewhere, despite ministers vowing to crack down on Putin’s UK allies if Russia invades Ukraine.
Nearly 250,000 properties in England and Wales are registered with overseas-based buyers, a sum that has skyrocketed from fewer than 88,000 in 2010. The capital city makes up 85,451 property titles held by individuals or firms from overseas.
“For far too long ministers have turned a blind eye to the use of our capital city as a safe harbour for corrupt funds, which is having a negative impact on both our international reputation for transparency and our local housing market,” Khan said.
“The truth is that property in London plays a central role in harbouring illicit funds from around the world, which also results in many properties being left empty and unused at a time when many Londoners are struggling to afford a home to buy or rent.”
Slow progress on the topic of a register would “prevent the government acting on their tough talk about further sanctions if they are imposed on Putin’s regime,” Khan added.
A government spokesperson said: “As recently re-affirmed by the Prime Minister, the government remains committed to establishing a new beneficial ownership register of overseas entities that own UK property, in order to combat money laundering and achieve greater transparency in the UK property market. The register will strike the right balance between improving transparency and minimising burdens on legitimate commercial activity.
“The register requires primary legislation for it to be established, and the government will legislate when parliamentary time allows.”