With offshore-registered companies now owning around 87,500 UK properties, House of Lords peers want to create a public register to increase transparency.
UK real estate is a popular choice for foreign investors, with £50bn worth of property owned by firms that are registered overseas. But peers in the House of Lords have warned that the country could be turning into a safe haven for “dirty money”.
The creation of a public register of all properties owned by foreign companies would help to counter this, argued the peers during a committee on the Sanctions and Anti-Money Laundering Bill, preventing investment from those companies whose proceeds have been gained by crime and corruption.
Tory peer Lord Hodgson said: “We may be having something of a national crisis of identity at the moment, but of one thing that I think that we can be proud, it is our respect for the rule of law and the integrity of our judicial system.
“Allowing billions of pounds to be owned by murky foreign companies is a blot on our reputation to say nothing of the general havoc that is created by helping to drive the property market higher to levels where no normal young person can even dream of aspiring to own their own house or flat near the centre of our great cities.”
However, Ion Fletcher, director of finance policy at the British Property Federation, warned that any new rules brought in to curb foreign property ownership must target the right people, not honest investors.
“UK real estate is particularly good at attracting overseas investors and there are legitimate reasons for many of them to own real estate through offshore entities, such as ensuring that the pensioners ultimately benefiting from an investment do not suffer double taxation,” he said.
“While we support the government’s drive for more transparency, real estate is more heavily taxed in the UK than in any other OECD country and, therefore, any new rules must be proportionate and not inadvertently penalise law-abiding investors.”