The Panama Papers expose how the global elite ruined the housing market
Even before the leak of the Panama Papers this week, we knew it was happening. So widespread is the use of central London property as a safe haven for the spoils of the world’s elite that the government had already promised to do something about it. The problem is, it promised so little.
Last year, speaking in Singapore, David Cameron was forced to acknowledge that foreign investment in British housing stock was damaging to the housing market and provided a cover for illegal activities. He agreed to crack down on individuals and organisations using the mask of offshore companies to invest in the UK property market as a means to launder what he called “dirty money”. He described how London property was being snapped up with “plundered and laundered cash” and promised that the UK should not be a “safe haven for corrupt money”. But it wasn’t enough.
In making the speech, Cameron was responding to a growing realisation that, in ushering in foreign investment, the government had also welcomed in a wealthy elite that objected to transparency in its financial dealings. Did we really know what, or who, we were dealing with? More importantly, did we understand how significant an effect their secret spending with the global luxury real estate brokers of Mayfair was having on everyone else, right down to the family trying to buy a modest two-bedroom semi in Chelmsford?
Even Donald Toon, director of economic crime at the National Crime Agency, said the use of ‘corporate wrappers’ and other tactics to launder money had “skewed” the property market. “Prices are being artificially driven up by overseas criminals who want to sequester their assets here in the UK, ” he said last year.
UK property valued at a total of £170bn is held by overseas investors. Of course, not every purchase made by a company registered offshore is an attempt to launder dirty cash or conceal illegal activity. But buying a home through an offshore company structure is one way of escaping the taxes and costs of ownership which the rest of us all have to bear.
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http://www.independent.co.uk/voices/the-panama-papers-expose-how-the-global-elite-ruined-the-housing-market-and-stopped-you-from-buying-a6971341.html
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