Just one in 300 overseas cash purchases trigger a red flag

Just one in 300 overseas cash purchases trigger a red flag

According to a recent report, only one in every 300 property purchases by an overseas cash buyer triggers a ‘red flag’ with the National Crime Agency (NCA). This needs to be addressed according to anti-money laundering specialists, Fortytwo Data.

In the year to March 2016, 26,400 homes were sold to overseas cash buyers in Britain, but of these 1.2 million property transactions, only 355 were subject to Suspicious Activity Reports (SARs). This means that only 0.33% of cash purchases by overseas buyers are triggering alerts – roughly one in every 300 sales.

However, the number of SARs submitted by estate agents to the NCA did rise dramatically in 2015/16, increasing 98.3% in just one year. While starting from a very low base, this was the highest rise of any sector and offers a “wake up call” for the UK property market.

According to Fortytwo Data, a lack of awareness and training may be the cause of historically low figures.

Commenting on the findings, Chief Executive of Fortytwo Data, Julian Dixon said that the increase shows that the industry is “on the right trajectory” but that it still has “a long way to go”.

Mr Dixon added: “The residential property market is a golden opportunity for criminals, who are able to take advantage of a sector that, in the past, has not been subject to such stringent money laundering requirements as financial institutions.

“Bricks and mortar is as attractive as ever to organised crime. It’s an ideal way to deposit large sums of cash in a single transaction, allowing them to blend in with the thousands of legitimate cash buyers who purchase property each year.”

Estate agents’ reporting responsibilities have recently been strengthened by the latest EU Money Laundering Directive (4MLD).

Deborah Stuttard

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