New research from SmartSearch has revealed that money laundering is significantly inflating property prices across the UK, making homeownership increasingly unaffordable for ordinary families.
The analysis estimates that illicit money entering the housing market has pushed up average property prices by £3,000 across the country, and by more than £11,000 in London. In some prime areas of the capital, prices have reportedly surged by as much as 20%, leaving first-time buyers and local families struggling to compete.
Since 2016, over £11bn in suspicious wealth has flowed into UK real estate, with more than half linked to shell companies registered in British Overseas Territories. Across England and Wales, over 87,000 properties are now owned by anonymous firms based in tax havens, collectively valued at more than £100bn. London is the hardest hit, with 40% of these properties located in the city.
SmartSearch CEO Phil Cotter said, “The UK property market is one of the most vulnerable sectors to financial crime, because of the high values involved and the ability for companies to buy, own, and sell property with minimal scrutiny.
“This allows criminals to exploit loopholes—like purchasing through anonymous shell companies—to clean their money. These buyers often pay inflated prices to secure quick deals, which in turn distorts the entire market.”
He added that many estate agents are failing to meet anti-money laundering (AML) requirements, despite being the first line of defence in tackling property-related financial crime. Nearly 200 estate agents have recently been fined over £1m for AML breaches, mostly for operating while unregistered.
Out of nearly 25,000 VAT and PAYE-based estate agents in the UK, around 3,400—or 14%—are still not AML-supervised. Even among those registered, more than half admitted they do not always run verification checks on the people controlling business clients, while 3% confessed they never carry out any checks at all.
“If estate agents don’t take their anti-money laundering responsibilities seriously, the UK property market will remain a magnet for dirty money,” Cotter said. “With thousands of agents still unregistered or failing to carry out even basic checks, we’re allowing criminals to distort the market—and it’s ordinary people who are paying the price.”
SmartSearch stressed the need for estate agents to embrace AML regulations as essential tools to protect the property market, rather than viewing them as burdensome requirements.
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