So many clients ask this question when buying and selling property, it is common to hear “I have just given all this to the estate agents and my mortgage broker it is such a pain”.
The short answer is to protect you and us.
Money laundering is a problem for the UK, with trillions of pounds thought to be laundered through banks and properties. It has been pinpointed as a target for the government, with the economic secretary to the Treasury John Glen saying that “Money laundering regulation exists to help protect an honest business, so anyone who flaunts the law should know that swift action will be taken.”
But what exactly is money laundering and how does it affect me?
Money laundering is the process by which the proceeds of crime are converted into assets which appear to have a legitimate origin so that they can be retained permanently or recycled into further criminal enterprises.
Therefore under the Anti-money Laundering Regulations, it is vital that we can verify you are who you say you are and where your money comes from.
The number of properties purchased by overseas buyers or with proceeds of crime has had a huge impact on the UK property market. Criminals’ interest in properties has caused the average prices of homes to rise, especially within London boroughs, which has had a widespread effect on the rest of the market. Developers are now prioritizing more profitable high-end luxury homes that are popular with foreign investors.
Many believe that these occurrences have been a huge contributing factor to the housing shortage, as overseas buyers remove the availability of housing stock for UK citizens. This corruption extends beyond a purely economic impact. When overseas homeowners leave a house unoccupied, not only does this lead to a decline in local taxes, but it also affects the local area by creating ghost communities that are unappealing to live in.
In my next blog, we will look at how to protect your property from property fraud.