If the plan by the United Kingdom Government to open a register of foreign property owners sails through, the long wait to tame corrupt Nigerians who invest abroad using companies and other structures to buy real estate may end soon. The new register will be public and will include those who own or want to buy property in the UK. It will be easily accessible and avoid creating a disproportionate burden or put off legitimate investors.
One of the main aims is to prevent those buying property from hiding behind offshore corporate vehicles as they are regarded as vehicles for hiding illicit funds and laundering the proceeds of crime. There has been rising concern that the rise in overseas owners of property in London, for example, could be due to criminals using the real estate market.
Under the current proposals entities wishing to buy property will have to register their beneficial ownership information with Companies House. If their application is successful they will be allocated a registration number. This number will be required in order to register title to the property at the appropriate Land Registry.
The new development has already sent shockwaves to Nigerian property investors in the UK. Most of them are consulting with real estate experts at home and abroad on ways to handle the issues.
But entities that already own property will be given a transitional year in which they will be free to choose whether to disclose the information and apply for a registration number or dispose of their property.
In order to ‘strike the right balance between improving transparency and minimising burdens on legitimate commercial activity’ the Department for Business, Energy and Industrial strategy is asking overseas investors, property and transparency experts to submit evidence by May 15, 2017.
The former President, Nigerian Institution of Estate Surveyors and Valuers (NIESV), Mr. Emeka Eleh welcomed the idea, saying that the world is changing and countries are looking for ways to make their economy more transparent and business friendly.
He said that it is nothing new, but part of the global effort to ensure government’s transparency.
Eleh compared it with the Treasury Single Account (TSA), which help to monitor the government revenue and stifle corruption in Nigeria.
A past chairman, NIESV Lagos branch, Pastor Stephen Jagun, said UK is one of the world’s leading financial centres that offer real estate investment opportunities for foreign investors such as Nigerians, Chinese and Russians.
“This investment benefits the UK economy and supports the construction industry. People see UK as a place to launder stolen money, which now rubs off on the integrity and reputation of the UK property market. The property prices are now getting out of the hand of British citizens and they continue to make laws to accommodate first time buyers,” he said.
He said: “It will be good for African countries, since London will no longer be a haven for stolen money. Why people always look towards London is because it has good security, transport system and investment is safe.
For the Dr. Meckson Okoro, an estate surveyor and valuer, Nigerians will always find ways to circumvent the law. He believes that the proposed UK policy would not have any positive effect on Nigeria’s economy and real estate market.
According to him, the federal authorities should look for internal measures to ensure property investments and soften policies that scare foreign direct investment in the real estate sector.