Nearly £6 Billion in Suspicious Funds Used to Buy UK Properties via British Overseas Territories

Transparency International UK (TI) has uncovered that nearly £6 billion in suspicious funds have been channeled through British Overseas Territories since 2016 to purchase properties in the UK. The nonprofit’s analysis identified 494 properties, valued at a total of £5.9 billion, acquired via companies registered in these territories.

According to TI, each property in question is linked to individuals classified as politically exposed persons from high-corruption-risk jurisdictions, sanctioned by the UK, or implicated in financial crimes. The British Virgin Islands (BVI) alone accounted for over 90% of the funds, approximately £5.5 billion, used to purchase 475 properties, mostly concentrated in London.

The Cities of London and Westminster constituency emerged as a hotspot for such investments, with £3.6 billion spent on 224 properties in the area. This highlights the region as a significant destination for funds of questionable origin.

TI’s findings, derived from an analysis of court documents, corporate records, and leaks such as the Pandora Papers, estimate that a staggering £11.1 billion in suspicious funds have flowed into UK property markets since 2016. Margot Mollat, TI’s senior policy manager, underscored the role of British Overseas Territories in facilitating these financial flows. She described them as "global hubs for suspicious and illicit wealth" and pointed out how their secrecy has been a powerful enabler for corrupt actors.

"Their secrecy is a tool for corrupt individuals," Mollat remarked, emphasizing the need for urgent reforms to address these systemic vulnerabilities.

Earlier this month, 40 Members of Parliament signed a letter to Foreign Secretary David Lammy, urging him to expedite the implementation of public registers of beneficial ownership in British Overseas Territories. Such registers, which aim to identify the ultimate owners of companies, are considered critical in tracking and combating illicit financial flows.

While some territories, such as Montserrat, have already implemented these public registers, others, including the BVI and the Cayman Islands, have postponed their plans until June 2025. These delays have drawn scrutiny from transparency advocates.

A spokesperson for the BVI defended the territory’s commitment to tackling financial misconduct, stating: "The jurisdiction is unwavering in its commitment to combating money laundering, tax evasion, and all forms of illicit financial activity."

The BVI representative also noted ongoing efforts to enhance transparency, adding, "In partnership with the UK government, the BVI has established a dedicated sanctions unit to ensure compliance with international financial sanctions. Additionally, we are advancing efforts to provide access to beneficial ownership information in cases where a legitimate interest is demonstrated."

As the debate over transparency and regulatory enforcement continues, calls for stronger measures to address the use of UK property markets as a haven for questionable funds remain a focal point of reform initiatives.

By fLEXI tEAM