Money laundering through the UK property market is contributing to the growing unaffordability of homeownership in this country, according to new analysis by anti-money laundering and digital compliance specialists, SmartSearch.
The firm estimates that the influx of illicit funds has inflated house prices by an average of £3,000 across the UK—and by more than £11,000 in London alone.
Since 2016, more than £11bn in suspicious wealth has been channelled into UK real estate, with more than half linked to shell companies registered in British Overseas Territories. Currently, over 87,000 properties in England and Wales are owned by anonymous firms based in tax havens, with a total estimated value exceeding £100bn.
Phil Cotter, CEO of SmartSearch 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.
“In some prime areas of London, dirty money has inflated prices by up to 20%, pushing first-time buyers and local families out. In boroughs like Westminster and Kensington & Chelsea, offshore buyers have created so-called ‘lights-out streets’, where luxury homes sit empty while local communities suffer.”
According to Cotter, estate agents are the first line of defence in stopping property-related money laundering. But SmartSearch warns that many are falling short of their legal obligations.
Recently, nearly 200 estate agents were fined over £1m for breaches of anti-money laundering (AML) regulations—mostly for trading while unregistered.
Analysis of the HMRC Supervised Business Register4 shows that out of nearly 25,0005 VAT and/or PAYE-based estate agents in the UK:
+ Some 21,578 are currently AML-supervised 1,341 have applied but are still awaiting approval 980 have let their supervision lapse That leaves around 3,400 agents (14%) operating without appropriate oversight.
+ Even among those that are AML registered, more than half (56%) admit they do not always run verification checks on the people controlling business clients—leaving them exposed to front companies. Alarmingly, 3% say they never verify business buyers.
Cotter added: “If estate agents don’t take their anti-money laundering responsibilities seriously, the UK property market will remain a magnet for dirty money. With thousands of agents still unregistered or failing to carry out even basic checks, we’re allowing criminals to distort the market—and its ordinary people who are paying the price.
“We recognise the pressures estate agents are under, which is why we’re committed to helping them navigate AML regulations and protect all involved. These regulations are not a burden, but a vital tool to stop criminals from distorting our market.”
How about the Vietnamese nail bars, barber shops..massage shops and takeaways that only take cash.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
What a ridiculous comment. Who in their right mind would launder money buying kebabs?
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Not a ridiculous comment at all. Do you know how money laundering actually works?. It’s not about the person buying the kebab!. It’s a way of a business owner putting ‘sales’ through their tills without actually selling anything. That way, they are showing and declaring takings of x amount when they might not have sold even one kebab that week.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
How can this be the agents’ fault? What about the solicitors who actually complete the legal transactions — they’ve been dealing with AML requirements far longer than agents. Please tell me this isn’t just an advert for Smartsearch.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Do the banks from where the money arrives ever get fined?
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Yes, Barclays just got fined £42million
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
I was going to make an overall comment about advertorials and general marketing BS.
But, this annoyed me even more: “Recently, nearly 200 estate agents were fined over £1m for breaches of anti-money laundering (AML) regulations—mostly for trading while unregistered.”
2023/ 2024 the fines levied against estate agents for not being registered was over £3million in only 9 months of that year.
Worse than the fact that the positive trajectory has not been noted, is that the £3m stat comes from the same blinking company trying to extol their services.
Yes, there’s more work to be done, but celebrate the positive whilst pointing out the negative.
But, of course, that doesn’t get you the clicks now, does it…?
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
When comparing estate agents’ AML processes with those required of solicitors, it is clear that agents’ practices fall significantly short of SRA standards. In many cases, agents meet only the bare minimum requirements under the legislation. There is often little to no scrutiny of Source of Wealth (SoW) or Source of Funds (SoF), with reliance on self-certification and digital-only ID verification. As a result, these checks are generally considered superficial.
I Think a more effective approach would be for the government to move away from AML compliance at the agent level and instead collaborate with regulated bodies to provide a centralised check that could be relied upon across the sector. Despite claims from some panel managers and suppliers, agents’ AML processes do not provide sufficient assurance and contribute no real efficiency to the conveyancing process.
Based on my experience, many of the current AML products marketed to agents such as Smart Search and Smart Compliance are little more than commercial tools that add cost. The most recent SRA guidance is that digital checks on their own can not be relied upon for the proposes of conveyancing.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
We don’t handle cash or payments. Solicitors do.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register