London's Luxury Homes are a Prime Target to hide 'Dirty Money': Report

The property market in the United Kingdom is increasingly becoming a prime target for money laundering, with London's most expensive property attracting criminal buyers from the around the world to hide ill-gotten wealth.

According to a recent report by the British government, there is a higher likelihood of real estate in the country being bought to disguise illegal activity and illicit cash flows; with the government upgrading the risk of money laundering and terrorist financing in the real estate sector to medium.

The report highlights that "It is likely that criminals favor locations with high value properties such as London, Edinburgh or university towns, with London in particular considered highly desirable for overseas entities to operate a residential or commercial base in".

The onset of the coronavirus pandemic has only made the real estate sector more vulnerable to dirty money, as the dwindling demand for expensive and extravagant homes makes it more susceptible to exploitation from criminal entities, according to the report.

Furthermore, according to Transparency International, transactions made my corporate structures or trusts in tax havens such as Panama and the Cayman Islands make these financial inflows difficult to track - as nearly 75% of all properties linked to corruption are owned by companies registered in such locations, valued at over $6.6 billion.