UK Real Estate Aims for a “World’s First”
The Government has published a consultation document, proposing the introduction of a public register that details the identity of the ultimate owners behind foreign companies that purchase real estate in the UK. It is said that no such register currently exists in the world. UK registered companies are already subject to such a requirement as they are obliged to maintain a register of their beneficial owners at Companies House.
The catalyst to extend such transparency to overseas companies appears to have surfaced amid concerns that UK real estate is being used by international criminals to launder the proceeds of their crimes; the Department for Business, Energy and Industrial Strategy said that, since 2004, over £180 million of UK real estate has been identified as the suspected proceeds of corruption.
Business Minister, Margot James, stated that the Government is “committed to protecting the integrity and reputation of the UK property market” noting that, “this register would be a valuable measure to increase transparency and investor confidence”. It is important to note that the proposals are not intended to discourage foreign investors; the consultation paper is quick in noting the need to “[strike] the right balance between improving transparency and minimising burdens on legitimate commercial activity”.
Indeed, foreign investment into UK real estate is currently booming. Commercial real estate in London’s West End recorded a high of over £1.9 billion in the first quarter of 2017. Added to this is an announcement from Qatar’s Finance Minister of an “additional £5 billion investment” in the UK (focusing on real estate, energy and technology) noting that the UK “has always been a good market”. The aim of the public register is build on this and “support a better functioning property market”.