DAVID CAMERON called it a new “Domesday Book” — a register of British property bought through foreign companies. Now The Sunday Times has carried out the most complete analysis of Land Registry data to date to reveal that more than £150bn of property in England and Wales has been purchased by offshore firms since 1999. The figure is almost as much as this year’s spending on welfare and defence budgets combined.
The study reveals that one street in central London has 149 homes owned by firms based in tax havens, bought for a total £563m. On a nearby road, 101 properties purchased by companies based offshore sold cumulatively for £348m.
During a speech in Singapore last month about the need to tackle corruption, Cameron said he wanted to expose the “anonymous shell companies” used to buy luxury properties, some of it “with plundered or laundered cash”.
The scale of that task is shown by the analysis of 96,440 property transactions by 35,922 companies registered by the Land Registry in the past 15 years.
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While some of the property is commercial, such as office blocks or shopping centres, the Office for National Statistics says 73% of the value of property transactions relate to residential premises — meaning an estimated £112bn was spent on houses and flats using offshore firms between 1999 and the end of 2014.
The use of firms based in tax havens such as the British Virgin Islands (BVI) and the Cayman Islands to buy property extends far beyond London. In Maidenhead, Berkshire, almost £350m has been spent by offshore companies since 1999. The purchases include a country hotel bought by a BVI-based firm for £6.4m last January and a nearby house that backs on to the Thames purchased for £1.3m the same month.
Spending of almost £250m was registered for 146 properties in a single postcode area in Bristol between 1999 and 2014. Over the same period, more than £200m was spent on 152 properties in two postcode areas in Cardiff and £323m on 87 properties in one postcode area of Canterbury in Kent.
The street with the largest number of residential properties bought by offshore firms is Lancaster Gate, a road with two long rows of terraced houses close to Hyde Park where a four-bedroom apartment is currently on the market for £24m. The 149 properties sold for a total of £563m and are now likely to be worth more.
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In nearby Holland Park, where white rows of imposing Victorian detached houses are popular with celebrities and senior business executives, £348m was spent on 101 homes by firms based overseas in countries that included the BVI, Cyprus and Switzerland.
In Brompton Square in Kensington and Chelsea, where local stores include a Porsche outlet and a Swarovski jewellery store, a 23,000 sq ft house was bought for £28m in 2011 by a BVI-based company. The imposing property was previously owned by Achilleas Kallakis, a Greek property tycoon who is serving a seven-year prison sentence for a £750m fraud.
Neighbours last week claimed that its new owner had outbid a member of the Saudi royal family to secure it.
Referring to Achilleas, Tony Knight, a member of the Knightsbridge Residents Association who lives opposite the property, said: “I’m not anti-foreigner, we’ve had foreigners buying properties in London for ever, but it’s not good when you have undesirables buying up whole chunks.”
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A property in Pall Mall, formerly owned by the Crown Estate and reportedly used by MI6 as a location for interviewing potential recruits, was sold to Mike Spink, a property tycoon, for £65.5m in November 2013 through Decimus Limited, a Jersey-based shell company. A source close to Spink said the offshore firm had been used because foreign investors in the property wanted a “tax neutral” base to pool their money.
The source added that, while Spink paid full UK tax on his income, other investors were “respected super-wealthy individuals” who would be able to reduce their tax bill on income from the refurbished property if they kept any profits outside the UK.
The £150bn figure is likely to be a significant underestimate because the Land Registry data did not record a price for 34.4% of transactions involving foreign companies since 1999.
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Council flats worth £3m each
John Caudwell, the billionaire founder of Phones 4u, is paying for what may become the country’s most expensive council flats, writes Nicholas Hellen.
About 12 flats, each worth around £3m, will be rented to key workers with a household income of up to £71,000 for £180-£260 a week.
They will be built in Farm Street, close to Berkeley Square in Mayfair, central London, where prices reach £4,000 per sq ft. The flats would fetch less as they will be above a road cleaning depot.
Caudwell, who wants to build luxury homes at Audley Square House nearby, has paid Westminster city council £33m for the Farm Street site. He did not respond to a request for comment.
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Daniel Astaire, the council’s cabinet member for housing, said: “Providing homes for working families is our priority.”