An investigation has uncovered links between suspicious wealth and hundreds of UK new-build homes, raising concerns about money laundering checks in the property sector.

Transparency International UK has identified 708 new-build properties and development sites worth £2.2bn with links to suspicious wealth.

The properties span more than 150 locations and involve over 85 developers.

They account for more than a third of the 2,000-plus UK properties the organisation has linked to suspicious wealth since 2016. The wider portfolio exceeds £16bn in value.

The findings raise questions about checks on buyers, particularly when developers sell homes directly or market properties overseas.

Developers face scrutiny over money laundering loophole

Transparency International UK claims gaps in anti-money laundering rules leave some developers outside the checks that estate agents, banks and solicitors must undertake.

Around three-quarters of developers have no registration with an anti-money laundering supervisor, according to its report, ‘Concerning Developments’.

The organisation argues that off-plan sales pose particular risks.

Buyers can purchase multiple properties before construction finishes, spreading their investment across several transactions.

Some can also sell their interest before completion. As a result, HM Land Registry may never record their names as property owners.

The report also warns that developers relying on early sales to fund construction may face pressure to complete deals.

London developments linked to asset freezes

The investigation highlights several London developments where authorities have subsequently frozen properties.

In 2021, two executives linked to the Prince Group bought 27 flats at Embassy Gardens in Battersea and Centre Point in central London.

The UK and US have since imposed sanctions on the group over alleged human trafficking, fraud and corruption.

UK authorities have frozen all 27 flats, according to Transparency International UK.

At Elephant Park in south London, the organisation identified another 19 flats purchased through companies linked to a man wanted in China.

He faces allegations of illegal gambling, which he denies. Authorities have also frozen those properties.

The report raises concerns about conveyancing firms that developers recommend to buyers.

It argues that lawyers relying on developers for repeat business may face competing commercial pressures when checking buyers’ funds.

Overseas sales raise further concerns

Transparency International UK also questions the risks associated with overseas marketing of new-build homes.

Developers frequently target international buyers, including those from countries where verifying the source of wealth can prove difficult.

The organisation argues that transactions involving higher-risk jurisdictions require greater scrutiny.

However, overseas investment alone does not indicate money laundering.

Calls for tougher checks on developers

Transparency International UK wants the government to extend anti-money laundering requirements to major developers selling their own properties.

It also wants regulators to strengthen oversight of conveyancing firms handling new-build transactions.

The organisation proposes requiring law firms to disclose their developer-panel relationships and work involving higher-risk overseas buyers.

It argues that this would help regulators identify potential problems before suspicious funds enter the UK property market.

The recommendations come ahead of a government consultation on extending anti-money laundering rules.

The report warns that freezing properties years after purchase carries significant costs. It argues that stronger checks could prevent suspicious transactions in the first place.

The investigation identifies links to suspicious wealth. It does not establish that criminals funded all 708 property purchases.