Agents must show “greater diligence” dealing with Russian buyers

NAEA Propertymark is calling on agents to show “greater diligence” when dealing with Russian buyers, in the light of the report on alleged interference in British politics.

Mark Hayward, the association’s outgoing chief executive, made the comment when he came out in favour of government proposals for registers of beneficial ownership - ways of identifying the true ownership of homes which may be purchased via companies or offshore trusts.

Hayward says: “I unequivocally welcome the government’s commitment to combatting exploitation of the property market and encourage them to ensure the register is as thorough and robust as possible. 

“Property is often seen as a gateway to money laundering and it is essential that estate agents are aware of their duty in carrying out the right checks and reporting any suspicious activity. 

“Having sat on the Economic Crime Strategic Board, I am pleased to see the government has taken our call for action seriously and am hopeful that today’s statement will encourage greater diligence in the sector, eliminating any unwarranted interference such as that referenced in today’s Russian interference in British politics report.”

The report into Russian interference accused estate agents of being complicit in facilitating money laundering by Russian via property purchases, especially in London.

Part of the report - written by the Intelligence and Security Committee of the House of Commons - says: “Few, if any, questions have been asked regarding the provenance of their considerable wealth and [the government’s] ‘open door’ approach provided ideal mechanisms by which illicit finance could be recycled through the London ‘laundromat’” the reports says.

“It is not just the oligarchs either – the arrival of Russian money has resulted in a growth industry of ‘enablers’: lawyers, accountants, and estate agents have all played a role, wittingly or unwittingly, and formed a ‘buffer’ of Westerners who are de facto agents of the Russian state.”

However, the UK government itself has not taken action when it could have.

Back in 2018 UK measures to retaliate against alleged Russian government-sponsored nerve agent attack on former spy Sergei Skripal excluded any attempt to interfere with Russian-owned property.

At the time it was reported that while no precise figure could be put on the number of Russian-owned properties in London, the total was likely to be well over 1,000 - many of them are linked to Russian-owned companies quoted on the London Stock Exchange, and to Russian students enrolled at British schools and colleges.