New analysis by SmartSearch has revealed that criminal money entering the UK property market has pushed average house prices up by £3,000 nationwide, with the impact in London reaching over £11,000.
According to SmartSearch, since 2016 more than £11bn in suspicious funds have been funnelled into UK real estate, over half of it through shell companies registered in British Overseas Territories. The firm’s data shows over 87,000 properties across England and Wales are now owned by anonymous firms based in tax havens, collectively valued at over £100bn. Nearly 40% of these anonymously owned homes are in London, with certain boroughs seeing property prices rise by as much as 20%.
SmartSearch CEO Phil Cotter 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.”
Cotter added that this trend has created ‘lights-out streets’ in London neighbourhoods like Westminster and Kensington & Chelsea, where offshore buyers leave homes empty while local families struggle to buy.
The report also highlighted serious AML compliance failings among estate agents, who serve as the first line of defence against property-related money laundering. Nearly 200 estate agents were recently fined over £1m for AML breaches, mostly for trading without being properly registered.
Analysis of the HMRC Supervised Business Register shows that of nearly 25,000 VAT and PAYE-based estate agents in the UK, around 3,400 (14%) are operating without appropriate AML supervision. Even among the 21,578 agents who are AML-registered, more than half admit to failing to carry out full verification checks on those controlling business clients. Alarmingly, 3% said they never verify business buyers at all.
Phil Cotter warned, “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.”
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