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Secrecy in UK property market 'enables freehold companies to rip off homeowners'

By agency reporter
June 29, 2019

Secretive offshore companies are being used to shield freeholders from being held to account by leasehold homeowners. This comes in the wake of a leasehold scandal in which UK homeowners have been charged doubling ground rents and extortionate administrative fees.

A new investigation by Global Witness has found the leasehold scandal is being exacerbated by the fact that almost 50,000 freeholds across the UK are owned in offshore tax havens like Jersey and Guernsey. This secrecy means concerned residents are unable to challenge charges, have their complaints ignored and ultimately have no idea who really owns the ground under their feet.

Adriatic Land and Abacus Land, who appear to own a major share of freeholds held offshore, are together estimated to own the freeholds for over 35,000 leasehold properties in the UK. Whilst the true owners of Adriatic and Abacus are concealed by anonymous structures, both are believed to be administered by Long Harbour, an investment management firm founded by the son of a Conservative Member of the House of Lords. 

Ava Lee, Anti-Corruption Campaigner at Global Witness, said: “I’m yet to hear of a legitimate reason to hold UK property offshore. For years we’ve seen how criminals and corrupt politicians stash and launder dirty cash through anonymous companies registered in secrecy jurisdictions. Our analysis shows that businesses are making money from leasehold homeowners using the same structures without ever revealing who they are.

"This is yet another reason why we need to lift the veil of secrecy on UK property and ensure that everyone, from leasehold homeowners to journalists, can find out who really owns so much of the UK.”

One incarnation of Adriatic Land owns the freehold of the site in Barking where a recent fire destroyed twenty homes. Local residents have told Global Witness they had tried to send fire safety warnings to Adriatic following Grenfell. 

“Lots of us have tried to contact them [Adriatic Land] about the cladding after Grenfell – but there’s no way to contact them. They don’t even have a website.” 

* Read the full investigation by Global Witness here

* Global Witness https://www.globalwitness.org/en-gb/

[Ekk/6]

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