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Elusive offshore owners leave London mansions to crumble

An article in the Guardian today notes that there are an estimated 1m empty homes in the UK, and about 3,000 of them in the Central London borough of Westminster. Some of them, in Mayfair, are mansions are worth as much as £50m, even in their dilapidated state. Many of the biggest and most expensive are owned not by dusty old dowagers down on their luck but by mystery investors hiding their identities behind offshore companies.

The Empty Properties Officer for Westminster council, Paul Palmer, believes many elusive owners don’t have the slightest intention of bringing them back to life. “So often offshore owners have little or no interest in the property as a building – it is merely an asset to be traded as they see fit,” he says, adding that offshore firms are very tricky to track down.

There are two vacant Park Lane townhouses which Palmer estimates are worth £10m apiece. The key leaseholds on each are held by Konzeo Ltd and Weleta Ltd, two companies incorporated in the British Virgin Islands (BVI), a tax haven in the Caribbean. Both firms ignored multiple letters from Palmer asking them to explain why the buildings were unoccupied and threatening to issue a compulsory purchase order – until a gang of squatters, plus their dogs, moved in and were pictured on the front page of the Sun in January. Builders appeared after the squatters were evicted, but Palmer says they were on site for a only few days and have never returned. “It’s just the same situation as before,” he says, peering through the letterbox nine months on, “only now they’ve left the lights on.”

Within a five-minute walk of Park Lane are 21 of the grandest properties on Palmer’s list, worth between £6m and £50m each by his estimation. Of these, seven are registered to BVI companies, with others owned by firms incorporated in Jersey, Guernsey and Switzerland. Many are registered at the same address in Road Town in the BVI’s capital of Tortola, just under different post office box numbers, says Palmer, who confesses he has often gazed at the satellite picture of Road Town on Google Maps and wondered what secrets lie beyond the satellite’s range.

John Samson, a property law expert at Taylor Wessing, says offshore-registered firms buy expensive London property as an investment, just like art or any other commodity. “One of the reasons that people buy property in London, and in particular Mayfair, is that there is almost always a demand for it,” says Samson. “Investors believe the value will not only be maintained but will go up, regardless of whether it is lived in or not.” Amanda Royce, a property solicitor, says Mayfair is a particularly attractive investment location for foreigners now because of the weak pound. “The owners leave them empty sometimes because they lose track of their properties. Often they have a place in New York, a place in Monte Carlo, one in the south of France and so on.” We suggest that a regular bill for a substantial proportion of the annual rental value of the sites on which these mansions stand would quickly help their owners to keep track of their properties. And so much for the planners being responsible for a shortage of housing.

Read Guardian article here