Leasehold scandal: Reveal the true owners of companies stockpiling UK freeholds
28 June 2019, London – 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.”
Notes to editor:
Notes to Editors:
- Quotes from leasehold residents, across the UK, are available on request, as are broadcast standard recorded interviews and footage from a recent Barking Residents Association.
- Global Witness spokespeople are available for interview/ further background information
- In this research we define an “anonymous” company as one that declares no human beneficial owner and if it meets any of the following criteria (a) it is incorporated in a jurisdiction where there is no central public shareholder register, (b) is incorporated in a secrecy jurisdiction and lists only corporate shareholders that are themselves incorporated in secrecy jurisdictions (c) lists only corporate shareholders that are themselves anonymous companies according to (a) or (b)
- We put our findings to Long Harbour prior to publication and lawyers acting on their behalf responded:
“Long Harbour and HomeGround represent responsible freeholders and we conduct our business with complete transparency and accountability, fulfilling all of our obligations to leaseholders.
"A number of the ground rents, acquired by Long Harbour on behalf of its clients and managed by HomeGround, are based in Guernsey and Jersey for operational reasons as is standard practice across the financial services industry, but this has absolutely no bearing on our obligations, liabilities or accountability as a business.
"We absolutely refute any accusations that we seek to avoid our responsibilities and, despite multiple requests, no evidence has been produced to support any claims to the contrary. HomeGround, which acts on behalf of freeholders, is fully contactable and deals with residents on a daily basis so any claim suggesting otherwise is simply wrong.”
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