The number of properties in London owned through offshore companies based in tax havens is on the rise and has grown by nearly 10% in the last year alone.
Nearly 40,000 residential and commercial properties in the capital are now owned by companies based in tax havens such as the British Virgin Islands, Panama, and Jersey.
Land Registry data analysed as part of a great investigation by the Guardian into the secretive nature of the London property market shows that 39,917 commercial and residential properties across the London area are in the hands of companies registered in tax havens. That’s up from around 36,500 at the same point in 2015.
On an area-by-area basis, Westminster and the City of London have the highest overseas ownership, with as much as 10% of all property owned by companies based in tax havens. Perhaps unsurprisingly, London’s most affluent boroughs are home to the highest proportion of offshore registered properties. Here’s a breakdown:
- The City of London — just over 10% of properties registered in tax havens.
- City of Westminster — 10% of properties registered in tax havens.
- Kensington and Chelsea — roughly 7% of properties registered in tax havens.
- Camden — just over 2% of properties registered in tax havens.
Not only is the number of properties owned offshore on the rise, but some of the capital’s most well-known landmarks are now owned by offshore firms. Properties cited by the Guardian include Admiralty Arch on the Mall in central London, and Belgrave House, the UK HQ of Google.
While offshore ownership of properties isn’t something that is confined just to London, the capital is home to more than 40% of all the UK properties registered as being owned by companies based in tax havens.
Across the whole of Britain, some 90,000 properties are registered in tax havens, with roughly another 9,300 owned by companies based overseas, but not in tax havens.
Foreign ownership of property in Britain, but particularly in the capital, is becoming an ever more pressing issue for politicians, with the likes of London mayor Sadiq Khan, Prime Minister David Cameron, former deputy Prime Minister John Prescott, and numerous others all citing increasing numbers of properties being in the hands of super-wealthy individuals from overseas as a major problem for the market.
Rich owners from overseas are blamed for helping push prices up, pricing out British buyers, and for encouraging developers to focus on building super luxury flats, rather than affordable housing for regular Londoners. The average London house price is now more than £500,000 ($733,946), or roughly 16 times the average London salary. That ratio has never been higher.
The government is also acutely aware of the problem of secretive purchase of property in the capital. In April, it revealed plans to create a register for offshore companies buying property in the UK. Under the plans, companies would be required to reveal who is behind them, effectively ending the secretive buying of properties from overseas.
Earlier in May, Prime Minister David Cameron said that “some high-value properties, especially in London, are being bought by people overseas through anonymous shell companies using plundered or laundered cash.”
The report follows on from an investigation from the same paper showing that 130 of 214 flats in London’s tallest residential building, the Tower at St. George’s Wharf in Vauxhall, are foreign-owned and that more than a quarter are owned through offshore companies.