London house prices are being driven up by foreign criminals laundering money
07-27-2015
by Jessica Morris
High-end inflation pushes wealthy buyers further down the property ladder (Source: Getty)
Foreign criminals who launder money through the purchase of high-end London properties are pushing up house prices, according to the National Crime Agency.
"I believe the London property market has been skewed by laundered money," Donald Toon, the agency's director of economic crime command, told the Times.
"Prices are being artificially driven up by overseas criminals who want to sequester their assets here in the UK."
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Toon's claim is supported by the Treasury's receipt of a windfall of nearly £150m in the last three months, from a tax on homes owned by companies, trust and investment funds rather than individuals.
And when it was first in operation in 2013-14, the tax raised £100m from 3,990 houses. Around 80 per cent of this came from two of London's most expensive boroughs - Westminster and Kensington & Chelsea.
It drives up property prices for everyone else by inflating the top end of the housing market, consequently pushing the wealthiest buyers further down the property ladder.
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"What they are doing is distorting the market," Toon said.
"If [estate agents] have a suspicion that there may be money laundering involved, then they absolutely should be submitting a suspicious activity report."
"You are at risk of committing a criminal offence if you do not do that."
Hundreds of billions of pounds are laundered in the city every year, according to the NCA, and it's intensifying its investigations.