Land Registry data obtained by Private Eye through a freedom of information request, showed that since 2008, there have been 27,989 purchases of homes, buildings and land in the capital by wealthy foreign buyers, with a majority using overseas companies registered in tax havens.
According to a report in the Evening Standard, two-thirds of properties sold were to companies registered in four British tax havens; Jersey, Guernsey, the Isle of Man and the British Virgin Islands.
Purchases made by wealthy investors included homes, commercial buildings, land, parking spaces and even the ‘airspace and structures’ at Aldgate East tube station.
By making purchases through corporate structures, individual buyers can keep their names out of any official records and circumvent inheritance and capital gains tax. But the report noted that the volume of purchases through corporate structures has slowed dramatically since 2013 when Chancellor George Osborne began to crack down on tax avoidance, particularly with regard to Stamp Duty.
The Evening Standard said over recent years, hundreds of the most expensive properties have been snapped up by companies, the vast majority with wealthy foreign buyers behind them.
Almost all of the homes on London’s most sought after street, Palace Gardens in Kensington, have been purchased through firms based in Delaware, Cyprus, St Vincent and the Grenadines, the British Virgin Islands and the Bahamas, the research revealed.
Further to this, the data showed that at the Riverlight Quay development in the Nine Elms regeneration area which was signed off by Mayor Boris Johnson, 15% of the homes built have been bought by overseas firms so far.
Green London Assembly member Darren Johnson told the Evening Standard: “The Mayor has been too relaxed about investors buying property in London.
“I want the Mayor’s deputy to be frank with the big property developers. They need to build homes for Londoners to live in, not assets for investors and tax accountants.”
He added: “He should also lobby government for full transparency and tighter rules to block tax avoidance, including requiring that the beneficial owner is declared for all property and land in the UK.”
Johnson’s deputy mayor for housing and land, Richard Blakeway, said London’s ‘international element’ to its property market has helped to support the current house-building ‘boom’.
“Mr Johnson has been clear that homes built should be marketed to Londoners first and every major developer has signed that agreement,” he added.
“The Bank of England has estimated the number of homes sold to overseas buyers is about three per cent across the whole market.”