Thousands of properties in England and Wales are owned by overseas companies
Data produced by HM Land Registry shows 3,112 property purchases were made by offshore companies in England and Wales in 2021. A further 50 purchases have been made so far this year (up to 2 March).
Purchase price figures are only available for 57% of entries in 2021 and 2022 but the available data shows at least £9.7 billion was spent by overseas companies in 2021, and £60.2 million in 2022.
The bulk of the spending can be linked to companies based in known tax havens like Jersey (£4.2 billion), the British Virgin Islands (£749.2 million), Isle of Man (£625.1 million) and Guernsey (£590.8 million).
Companies based in Luxembourg, which has been accused of being a tax haven, were behind £2.6 billion of purchases.
Investors are currently able to hide their identities by purchasing properties anonymously through offshore companies – an issue that has received renewed attention amid the West’s efforts to impose sanctions on allies of Russian president Vladimir Putin.
Campaigners from Transparency International said oligarchs and kleptocrats have used the UK property market “as a bolthole for their ill-gotten gains” for too long.
NationalWorld’s analysis comes as the UK government sets out new obligations as part of the Register of Overseas Entities to crack down on foreign criminals using UK property for criminal activity – a move it believes will bring greater transparency to the property market.
Under the rules, offshore entities will have to identify owners, register them with Companies House (the UK’s registrar of companies), and update records annually.
Failure to comply with the new rules will see managing officers face fines (up to £500 a day) or even prison sentences.
How many property purchases have been made by offshore companies?
There have been 93,877 property purchases made by offshore companies since 1959 in England and Wales, but HM Land Registry has only routinely recorded the country of a company’s incorporation since 1999 so the true number of property purchases will likely be higher.
Analysis shows overseas companies have spent at least £98.6 billion buying property since 1959, although purchase price data is only available for just over a third (34%) of entries.
Some individual purchases may involve multiple properties, so the figures may understate the true extent of overseas ownership. There is also no information on whether properties have been sold.
Where are the offshore companies based?
Companies based in the British Virgin Islands are linked to the greatest number of property purchases since 1959 – 21,435 property purchases, or 23% of the total.
Thousands of purchases are linked to the UK’s neighbouring Channel Islands Jersey and Guernsey. Jersey is linked to 20,867 property purchases (22% of all purchases) and Guernsey to 12,550 (13%).
The London region has the greatest number of property purchases made by overseas companies since 1959. In total there have been 41,447 property purchases, which account for 44% of all overseas property purchases.
This is followed by the South East with 16% and the North West with 12%.
Due to HM Land Registry licensing restrictions NationalWorld is unable to publish the addresses of properties owned by offshore companies, however the geographical distribution can be seen in the map below.
‘Corrupt wealth hidden in places like the British Virgin Islands’
The analysis comes as the war in Ukraine brings renewed focus on Russian-owned property in the UK.
Our analysis found Russian companies have made just four property acquisitions since 2011, all in London – but the current loopholes allowing anonymous ownership mean it is impossible to know how many transactions Russia was behind.
Research by the campaign group Transparency International has found £1.5 billion worth of property was bought by Russians accused of corruption or links to the Kremlin since 2016, most of which is owned via offshore companies.
In total Transparency International found £6.7 billion had been invested in UK property from suspicious funds (such as that from a person accused of corruption or money laundering) since 2016.
Duncan Hames, director of policy at Transparency International UK, warned there could be a “rush to the door” in the coming months, as overseas investors seek to sell their UK assets ahead of the new Register of Overseas Entities kicking in.
That could include those who would be hit by economic sanctions once assets are revealed to be theirs – such as sanctions targeting Russian oligarchs.
“Businesses need to be extra vigilant against those seeking to evade sanctions or move their loot to other shores,” Mr Hames said
“It is now well known how the secrecy afforded by Britain’s offshore financial centres, like the British Virgin Islands, has hidden corrupt wealth and obscured foreign influence operations.
“While these jurisdictions have promised to open their corporate registries by the end of next year, this will be far too late, in the current context. To help prevent sanctions evasion, ministers should work with the Overseas Territories and Crown Dependencies to rapidly increase the pace of their own transparency reforms.”
‘Greater transparency to UK property market’
The Register of Overseas Entities will be applied retrospectively to property bought since January 1999 in England and Wales and since December 2014 in Scotland.
The Government confirmed to NationalWorld the register will also be made publicly available.
A spokesperson for the Department for Business, Energy and Industrial Strategy said: “The register of overseas entities will crack down on foreign criminals using UK property to launder money and will achieve greater transparency in the UK property market.
“It strikes the right balance between improving transparency and minimising burdens on legitimate commercial activity.”
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