Money laundering through the UK property market is making homeownership increasingly unattainable for ordinary families, according to new analysis from anti-money laundering and digital compliance experts, SmartSearch.
SmartSearch estimates that illicit funds entering the housing market have inflated property prices by an average of £3,000 across the UK, and more than £11,000 in London.
Since 2016, over £11 billion in suspicious wealth has flowed into UK real estate — more than half via shell companies registered in British Overseas Territories. In total, more than 87,000 properties in England and Wales are now owned by anonymous firms based in tax havens, with an estimated collective value exceeding £100 billion. The issue is especially severe in London, where 40% of anonymously owned properties are located.
SmartSearch also warns that too many estate agents are failing to act and are falling short of their legal obligations.
Recently, nearly 200 estate agents were fined over £1 million for breaches of anti-money laundering (AML) regulations — mostly for trading while unregistered.
Analysis of the HMRC Supervised Business Register shows that out of nearly 25,000 VAT and/or PAYE-based estate agents in the UK, only 21,578 are currently AML-supervised, 1,341 have applied but are still awaiting approval, and 980 have let their supervision lapse.
That leaves around 3,400 agents (14%) operating without appropriate oversight.
SmartSearch's research reveals that even among those that are AML registered, more than half (56%, almost 11,000) admit they do not always run verification checks on the people controlling business clients — leaving them exposed to front companies. Alarmingly, 3% (around 650) say they never verify business buyers.
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.
"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."
