Money laundering skews London prices: 'we all know it...

A legal expert suggests central London’s house prices may have been skewed because of money-laundering - “and we all know it.”

Jonathan Goldsmith is a former secretary-general at the Council of Bars and Law Societies of Europe, which represents around one million lawyers.

In a blog for The Law Society Gazette he calls London’s house prices “sky high” and claims they are evidence that what he calls “the cumbersome regime” imposed on solicitors to try to root out money laundering is not working.

His article - here - suggests statements by the director of the National Crime Agency and the Prime Minister, and a recent article in the Financial Times, give a scale of the problem. The FT, for example, says more than 100,000 UK property titles are registered to overseas companies, with more than 36,000 properties in London alone owned by offshore firms.

“It could be that one of the facts I have cited is not true: that compliance regimes are generally not impressive or that there is no illegal cash driving up prices. Or it could be that no current compliance regime, however impressive, can detect the wrongdoing taking place. I leave it to you to answer” he says.

He then goes on to say that whatever the view “the elaborate and cumbersome regime imposed on the legal profession by the government looks more absurd at every estate agent’s window that is passed.”

Goldsmith says the likely answer is for the government - if it has the stomach - “to take the proper action to stop illicit money being parked in the UK property market.”

He suggests the matter is further complicated because the current anti-money laundering process has failed to stop criminal cash “turning lucky homeowners into millionaires.” As a result, there is little public clamour for the issue to be resolved, he says.