A new public register that will require overseas companies that own or buy property in the UK to provide details of their ultimate owners, as part of an effort to crack down on criminals who make use of such properties to launder “dirty” money, is unlikely to put off Asian investors in the market, who will remain attracted by “the buoyancy of the UK market”, according to a newpaper report.
The report, in the South China Morning Post on Sunday, quoted tax experts in Hong Hong as predicting that London will remain a top target for Asian property buyers, helped in part, at least for now, by the weak British currency. Because their interest is in the investment potential of UK property rather than in hiding their identities, these experts said, the register might impose a bothersome administrative burden, but would not alter the “risk-return equation”.
As reported, the UK is set to publish draft legislation calling for all UK property owners to be publicly identified later this year, with the register due to go live in 2021.
In the first quarter of last year, buyers from Hong Kong alone spent almost US$3bn on UK property, nearly US$1.3bn more than all other foreign buyers and global funds combined, the SCMP report noted.
It also quoted UK government figures that show foreign companies in particular, as opposed to individuals, own around 100,000 properties in England and Wales, including more than 44,000 in London, and how the authorities have become increasingly concerned that UK property is being used as a mechanism for tax evasion and money laundering.
The story quotes Nimesh Shah, a partner at accounting, tax and advisory practice Blick Rothenberg, as saying that those in Hong Kong who are considering new UK property purchases should “consider the possible impact of the introduction of the public register, and how their investment should be made in the future, whether in a personal name or even through a UK company”.
Others, the SCMP noted, said the new ownership register “could have a beneficial effect on the UK property market by providing transparency”, with one commentator, James Dempsey of BuyAssociation in Hong Kong, noting that it could help the authorities to “pinpoint exactly where that [laundered] money is coming in, and target people instead of punishing everybody”.
Separately, the SCMP story noted, Savills, the international property company, has predicted that London’s luxury property market will grow 20% over the next five years.
To read the SCMP report, click here.