Neil Coyle, MP for Bermondsey and Old Southwark, has said that ‘corrupt Russian money’ is causing severely inflated house prices in the borough, while the government is turning a blind eye to the problem.
He said: “In Southwark, we know better than most about rising house prices, but the market is badly over-heated due in part due to corruption with Russians and others buying houses at ridiculously inflated prices in order to launder finance through our capital.
Property prices in Southwark have soared by 77 per cent over the past decade.
Last year the average price of a house in Southwark was £678,138. Far more expensive than nearby Lewisham (£532,263) and Bromley (£561,698), according to data from Right Move.
Money laundering is a process where cash gained from crime is invested in property and assets, so that it appears legitimate.
Mr Coyle claimed the government was turning a blind eye to the illicit Russian money flooding into the capital.
“The Government admits there is a problem but has failed to act for years, adding to London’s housing crisis and leaving some homes empty that could be better used,” he said.
He added: “Ministers have promised action but refused to publish one report for months which outlined concerns and have failed to deliver on multiple previous commitments in this area, with some concluding that the multi-million-pound donations to Tory coffers are sadly being prioritised ahead of action for Londoners or the UK.”
It has been reported that nearly £2 million has been donated to the Tory Party by Russian linked individuals since PM Boris Johnson took office in 2019, following an investigation by The Sunday Mirror.
The investigation claims that almost a quarter of the ministers who attend cabinet have accepted donations from just three well-connected ex-Russians.
Earlier in the week Foreign Secretary Liz Truss said the UK was “strengthening” its sanction system so oligarchs close to the Kremlin had “nowhere to hide.”
Mr Coyle highlighted a contradiction between the government’s tough response to Russia over Ukraine and their loose oversight of London.
“Johnson is in desperate water as he tries to dodge responsibility for attending unlawful parties in his own home, but he cannot tackle Putin’s Russia attacking Ukraine without ending the masses of Russian funds pouring into the UK.”
Russia’s ultra-rich have brought up so much of wealthy areas like Belgravia in Central London that they have gained the monikers “Londongrad” or “Red Square.”
London Mayor Sadiq Khan called for a foreign-owned property register on Monday to reveal who owns what across the capital.
He said: “Londoners deserve to know the identity of those that own property in their city, and we have waited long enough for the Government to do the right thing and fulfil its commitments.”
In London, 85,451 property titles are held by foreign individuals or companies, as per figures by The Centre for public Data.