Illicit funds entering the housing market have inflated property prices by an average of £3,000 across the UK, and more than £11,000 in London, SmartSearch reveals.
The anti-money laundering (AML) and digital compliance company estimates that over £11bn in suspicious wealth has flowed into UK real estate since 2016 and more than half via shell companies registered in British Overseas Territories.
In total, more than 87,000 properties in England and Wales are now owned by anonymous firms based in tax havens, with an estimated collective value exceeding £100 billion.
The issue is especially severe in London, where 40% of anonymously owned properties are located.
However, SmartSearch found that many estate agents are falling short of their legal obligations.
Recently, nearly 200 estate agents were fined over £1 million for breaches of AML regulations, mostly for trading while unregistered.
Analysis of the HMRC Supervised Business Register shows that out of nearly 25,000 VAT and/or PAYE-based estate agents in the UK, only 21,578 are currently AML-supervised.
Of those on the register, 1,341 have applied but are still awaiting approval, 980 have let their supervision lapse and around 3,400 agents are operating without appropriate oversight.
Even among those that are AML registered, 56% admit they do not always run verification checks on the people controlling business clients, while 3% say they never verify business buyers.
SmartSearch chief executive Phil Cotter says: “The UK property market is one of the most vulnerable sectors to financial crime, because of the high values involved and the ability for companies to buy, own, and sell property with minimal scrutiny.”
“This allows criminals to exploit loopholes—like purchasing through anonymous shell companies—to clean their money. These buyers often pay inflated prices to secure quick deals, which in turn distorts the entire market.”
“If estate agents don’t take their anti-money laundering responsibilities seriously, the UK property market will remain a magnet for dirty money.”
“With thousands of agents still unregistered or failing to carry out even basic checks, we’re allowing criminals to distort the market—and its ordinary people who are paying the price.”
