Wednesday, March 04, 2015

London's dirty-money property boom

London has seen a property boom over the last decade which is on the verge of driving ordinary people completely out of the city. And its all driven by dirty money:

Billions of pounds of corruptly gained money has been laundered by criminals and foreign officials buying upmarket London properties through anonymous offshore front companies – making the city arguably the world capital of money laundering.

Some 36,342 properties in London have been bought through hidden companies in offshore havens and while a majority of those will have been kept secret for legitimate privacy purposes, vast numbers are thought to have been bought anonymously to hide stolen money.

The flow of corrupt cash has driven up average prices with a “widespread ripple effect down the property price chain and beyond London”, according to property experts cited in the most comprehensive study ever carried out into the long-suspected money laundering route through central London real estate, by the respected anti-corruption organisation Transparency International.

The fundamental problem here is that Britain is a tax haven. While it pretends to be a good global citizen, its financial services industry launders money for tax cheats and the corrupt. And the spillover effects - finance-sector bonuses and dirty-money driven property booms - ruin life for everybody else. Shutting down this criminal enterprise by closing tax loopholes and forcing transparency would be good for the world, and good for ordinary UKanians. But since when have "their" rulers ever cared about them?

(Meanwhile, it makes you wonder about how much of the top end of the Auckland property market is being driven by dirty cash as well...)