A report out today says ’180 million of UK property has been used to launder money. Here, Naomi Heaton, CEO of prime residential fund manager London Central Portfolio, gives an angry response to the broad taint of corruption
The recent press release by the charity Transparency International and the spin-off reports from it illustrate how sick our society has become. The desire to create scapegoats, dissension, envy and hatred seems to have no limits. Where are the old fashioned values of rational thought and proven assumptions?
It is so much simpler nowadays to make a controversial assertion – you do not even need to back it up. Pretty similar to the way the election campaigns are being run at the moment. Lots of brouhaha but not a manifesto in sight.
So let's look at this report. It claims that 36,342 properties in London are owned by off-shore companies and we have to assume, although it is not at all clear, Transparency International has gone through every Land Registry entry to get to this figure. But even if we give them the benefit of the doubt, there are 3.3 million households in London, so this stat amounts to just over 1 per cent. Hardly world shattering!
Having identifying these 36,000 properties held in foreign owned companies, Transparency International has decided to tar everything with the same black stained, evil brush. They indulge, without shame, in emotive language, describing these companies as 'off-shore corporate secrecy' and 'off-shore havens' thereby suggesting all sorts of skulduggery, while they may quite simply be a company in foreign ownership.
Transparency International then notches the story up another peg by saying that the UK property market is a 'safe haven for corrupt capital, stolen from around the world' and that the 'UK is becoming a destination of choice for global corruption'. Where is the evidence?
The many innocent people who hold property through off-shore companies, quite legitimately, and who run their affairs transparently and accordance with the UK tax legislation, may well have something to say about that. So may the pension funds and insurance companies.
No one is suggesting that there are not corrupt people around the world who are laundering their ill-gotten gains but, as a society, we have reached rock bottom when we dump everyone into the same boat.
Shock horror, the charity proclaim that the Metropolitan Police Proceeds of Corruption Unit have investigated ’180 million worth of property in the last eleven years! Over the same time period, the value of transactions in the London market has been ’437 billion. This thorough investigation therefore relates to just 0.04 per cent of the market. So while Transparency International may have a point, they seem to be cracking a nut with a sledgehammer.
The sad thing would be if politicians panic when they read such loud, politically motivated dogma about the housing market, rather than understanding that problems are localised and there are already very stringent anti-money laundering measures in place within the UK legal system.
It would be a sad thing if politicians overlooked the fact that the majority of buyers using company structures are investing into the vitally important private rented sector, providing homes to London's cosmopolitan population while they go about their daily business.
These foreign investors alone are putting at least ’1.2 billion a year into the UK economy and another ’0.5 billion into the UK tax coffers. Foreign investors buying properties through companies to live in are also making a hefty contribution to UK taxes with the higher rate Stamp Duty at 15 per cent and the new Annual Tax for Enveloped Dwellings.
The underlying political agenda appears to be that this apparent tide of 'dirty money', purported to be coming to London, is resulting in developers catering for corrupt politicians rather than the needs for Londoners. This, as usual, avoids the fact that we need a proper agenda for providing affordable housing and rich-bashing is not going to do the trick.
The most recent data shows that there were just 285 new units developed in Central London. Hardly enough to sort out the housing crisis. Hardly enough to house many corrupt politicians!
Naomi Heaton is CEO of prime residential fund manager London Central Portfolio