London homes will be seized from foreigners who can’t explain source of their wealth

Britain has taken a significant step towards exposing dirty money in the London property market, passing a law allowing the seizure of homes from foreigners who cannot explain how they paid for them.

Anti-corruption campaigners hailed the “unexplained wealth orders” as a potentially game-changing tool to stop wealthy individuals from laundering their money through mansions in the affluent London boroughs of Knightsbridge and Hampstead.

The measure in the Criminal Finances Act, which became law on Thursday, will enable enforcement agencies to seize and if necessary then sell the properties, returning the funds to the country involved.

“If some corrupt official, who we know earns £30,000 ($39,000) or £40,000 a year, buys a house in the UK for £2 million there is unexplained wealth,” said Margaret Hodge, an opposition Labour MP who campaigns on this issue.

In research published last month, campaign group Transparency International identified London properties worth £4.2 billion that it says were bought by individuals with suspicious wealth.

They should be “low-hanging fruit” for the new measures, said Duncan Hames, the group’s director of UK policy.