Selling Manchester by the Offshore Pound

Property in Manchester is not only reaching for the sky: its ownership is extending across the globe. With investors keen to cash in on the lucrative high rise luxury housing boom in Manchester city centre, the number of properties owned by companies registered overseas has risen by 8.8% in just eight months.

Tower blocks are springing up across the city centre and its outskirts, the latest and largest examples underway being the Deansgate Square skyscraper cluster. But amidst this financialised housing boom in the city centre there has been a severe lack of affordable or social housing provision, which continues with two recent large scale housing developments recently announced in Strangeways (500 homes) and Chester Road (51-storey and 21-storey blocks) also failing to provide any affordable housing.

Analysis of Land Registry data concerning overseas companies owning property across England and Wales shows Manchester in the top ten districts for land registry titles held by these companies. Only 44% of the titles registered in Manchester had a price attached to them, which when added up came to a staggering £843 million, so a conservative estimate of the total value of Manchester properties owned by offshore companies is around £1.5 billion. The majority of these titles are registered to companies incorporated in tax havens such as the British Virgin Islands, Jersey, Guernsey and others.

Property owned in this way enables the avoidance of tax payments in the UK, money that could go towards public services devastated by austerity. And the secrecy which shrouds these tax havens, which is why they are also known as secrecy jurisdictions, means that the ultimate beneficial owner of the company is often hidden.  In essence, criminal gangs and corrupt political leaders from across the globe can launder their ill-gotten gains through a property that may be next door to you.

Manchester sits seventh in the list of districts in England and Wales with the most Land Registry titles belonging to overseas companies. In November 2017, when the first datasets were released for overseas company owned property (OCOP), Manchester’s total stood at 1596 titles; by June 2018 this had risen to 1736. This represented an increase of 140 properties and the second largest absolute rise in England and Wales (behind Southwark in London with 377). This means Manchester has seen an 8.8% rise in just eight months (see graph below). This was also the second largest percent rise in a city in the North of England: the largest northern city rise was York, with a 24% rise to 238 titles. Greater Manchester, across all ten boroughs, saw a 1.2% increase to 4,888 properties.

The district with the most OCOP titles was the City of Westminster in London with 11,435 in July 2018, which marked a drop of 1.2 % in eight months. Southwark, with the largest district rise in total number of titles and also as a percentage with a 37% increase, was an outlier in in the Greater London Region which overall saw a 0.2% increase to 43,256.

Eight of the top ten were districts from Greater London, with only Manchester and Liverpool present from the rest of the country.

Meteor graphic: total number of Land Registry Titles per district with percent change over last eight months indicated. Source: Land Registry

‘From Homes to Assets’

Dr Jonathan Silver from the University of Sheffield’s Urban Institute is the author of the report ‘From Homes to Assets: Housing Financialisation in Greater Manchester’, which The Meteor reported on in February. A key driver for Silver’s work was the striking contrast between a housing development boom across the city centre and increasing homelessness and a growing housing crisis for many, who Silver says are “struggling to access the basic human right of housing”.  Silver’s report showed that despite £265 million of state aid contributing to the construction of 5,330 units across 79 development sites in Manchester and Salford, there was endemic avoidance of Section 106 payments to councils by property developers, and there were only five affordable housing units supplied in Salford and none in Manchester across the city centre developments studied.

The report also described a “surge of international finance” into housing development in Greater Manchester and showed that Manchester was a very attractive place for investors, partly due to the 8.3% rate of return on buying a housing unit to let in Central Manchester. This was much higher than the 1.8% Buy to Let gross yield in the Kensington area of London. This better return on investment for Buy to Let properties in Manchester could be a factor in the 8.8% increase of OCOP observed here, compared to a -2% drop in Kensington and Chelsea district (see graph above). On the latest data on OCOP in Manchester, Silver said:

“We are only beginning to uncover the true extent of the offshore ownership of Manchester and the cast of international actors through which finance flows into and out of the built environment. The city is now enmeshed in a web of global finance and this new research shows again how this type of international investment is accelerating at a rate of increase that marks Manchester out as a key space for rent-seeking finance.  I’m not surprised by the data that has emerged but I am worried that the city is now facing a point of no return in the central areas and uncertain futures in surrounding neighbourhoods.”

From Homes to Assets: Housing Financialisation in Greater Manchester - affordable housing
Read our previous story: Endemic avoidance of payments to councils by property developers revealed, while affordable housing is sacrificed for profit

London has long been known for its role in moving illicit money across the globe due to the activity of the City of London financial district and its spider’s web of offshore tax havens. An investigation by Transparency International UK published in 2017 identified £4.2 billion worth of properties in London bought by public officials and politicians with suspicious wealth, and 80% of apartments across the 14 developments investigated were being sold to overseas investors. The Home Affairs Select Committee said in a report on London’s role in money laundering:

“Poor supervision and enforcement in the London property investment market are making a safe haven for laundering the proceeds of crime. It calls for much stronger supervision of agents, buyers and sellers… the key tool for detecting suspicious financial activity across the financial services sector and connected industries, such as real estate, is overloaded to the point of being ‘completely ineffective’.”

Read our previous story: The Spider’s Web – how Britain helps the wealthy avoid tax globally

The key tool the select committee refer to is the Suspicious Activity Reports Regime which spots suspicious financial activity related to terrorist activity or money laundering, which is then passed on to the UK Financial Intelligence Unit. If that safeguard against corruption can’t keep up with activity occurring across the UK, with London being the obvious hotspot, what amount of scrutiny are financial activities in Manchester likely to be subject to?

Since the 2016 report the government has made some changes trying, to integrate the various public and private bodies meant to prevent the estimated £90 billion being laundered through the UK financial system, and have also introduced Unexplained Wealth Orders (UWO) which can be used to question those suspected of crime and then seize their assets or convict them. Unfortunately little use has been made of UWOs so far and with austerity’s grip also affecting UK law enforcement agencies there may be little scope to do so.

Information submitted to the Treasury Committees investigation into money laundering by Prem Sikka, Professor of Accounting and Finance at the University of Sheffield, suggests that the fight against corruption in the UK financial industry, and its offshore financial centers, is still woefully inadequate:

Looking at the increasing rate of Land Registry titles registered in Manchester over the past 10 years, it is increasingly important that these financial activities are scrutinised. Comparing Manchester against the City of Westminster for the date titles were registered with the Land Registry (and still included in the the OCOP data release of June 2018) there is an upward trend from 2012 to 2017 for the number of titles registered in Manchester per year, with a corresponding decreasing trend in the City of Westminster. If this trend continues it is not too difficult to see Manchester overtaking the City of Westminster within the next five years for the number of titles registered per year to overseas companies.

Selling Manchester by the Offshore Pound
Meteor graphic: The date the proprietor was added for each of the Land Registry titles in the two districts above, that were still in the OCOP data release in July 2018. This is not the exact number of properties registered in that year, as some may have been transferred to ownership of a UK based company, or to the ownership of a an individual living overseas; property belonging to individuals is not included in this data set . Source: Land Registry

“We cannot sell our souls and our city to spivs and speculators”

Ben Clay is the Labour councillor for Burnage, and a member of Tenants Union UK (TUUK), who was present at the recent city council planning meeting which gave the go ahead for the large housing developments near Strangeways and on Chester Road. He was critical of the decision for no affordable housing to be included in those developments and is a staunch supporter of building more social housing to alleviate the housing crisis. Clay responded to the increase in overseas ownership of property, saying:

“Manchester has the best rate of return for buy to let investors in the country now, and there is a gold rush of people looking to exploit this situation. While we do have some responsible and long term developers involved in place making, we also have some extremely dubious institutional build to let, and short term let investments…

“What they represent is a form of extractive industry. Like gold miners, oil companies or frackers, they come not to invest in the long term future but to extract as much wealth as possible… the higher the proportion of peoples income that is extracted by wealth seekers, the harder it is, even for young professionals in graduate jobs, to save for a deposit and get onto the property market.

“For many people, these rising rents mean they will always be in poverty or at risk of falling into poverty. They are only one or two wage checks from being out on the streets, and many families are struggling to get by… Of course we welcome and encourage investment and business, but we cannot sell our souls and our city to spivs and speculators.”

Tax avoidance

It was Private Eye’s ground-breaking investigation into offshore company ownership of property called ‘Selling England by the Offshore Pound’, which used Freedom of Information requests to gather the data, that eventually led to the Land Registry publicly publishing its data on OCOP. The first dataset published was in November 2017, with updated data published monthly.

The Eye’s investigation pointed out that property investment and development companies often use offshore companies to achieve capital gains tax and stamp duty advantages on the properties they own. Capital gains tax (CGT) is paid on the profit made due to the difference in the price of buying and selling an asset. Currently in the UK CGT stands at 28% for residential property, and with property prices ever increasing in the UK, means an increasing loss to the Exchequer of a significant amount of CGT, due to overseas companies owning property avoiding paying it.

Stamp Duty Land Tax is payable in England on residential property costing over £125,000, and rates range from 5% to up to 15% for properties over £2 million. However, if an offshore company owning a property is bought by way of share sales, then stamp duty is not payable.

Video above illustrates the growth of overseas ownership from January 1998 to June 2018. Land Registry data from July 2018 on overseas ownership of property in Manchester was used and only land registry titles with a postcode (1180 of 1736) were used to make the video.

Wealthy families can also avoid Inheritance Tax, which currently stands at 40%, by transferring the ownership of property to an offshore company. The Eye provided the example of Lord Rothermere, the owner of the Daily Mail, who through the use of a company registered in the British Virgin Islands allows tracts of farmland in Dorset owned by the family to be passed on inheritance tax free.

Clay believes the promises laid down in the Labour manifesto of last year may hold some of the solutions, saying it:

“Gave a clear commitment to crack down on off shore tax dodging, which also facilitates corruption, money laundering, organised crime and terrorist funding. Our manifesto said. ‘Taxation is what underpins our shared prosperity…We believe in the social obligation to contribute to a fair taxation scheme for the common good’.

“I believe that has to be the starting point and the council should use all the powers and influence at its disposal to promote and reward ethical and responsible investment and development, and discourage exploitative, speculative and tax dodging methods which are encouraged by the financialisation of housing.”

Where are these companies based?

The Land Registry OCOP data for June 2018 shows that the British Virgin Islands, Jersey, Guernsey and the Isle of Man are the most popular tax havens for companies owning property in Manchester to be incorporated in. The British Virgin Islands is a British Overseas Territory, and the rest are Crown Dependencies, which the United Kingdom is responsible for. British Overseas Territories and Crown Dependencies currently do not have to publish who the ultimate beneficial owner of a company registered in their jurisdiction is. This could possibly change in the near future as, after sustained pressure from tax justice campaigners, the UK government recently voted that Overseas Territories will have to publish a publicly available register of beneficial owners by the end of the decade; this was after many years of the UK government claiming they did not have the power to change legislation in Overseas Territories. Unfortunately, this current ruling does not cover Crown Dependencies, although the UK does hold the power to make the change there too.

Selling Manchester by the Offshore Pound

Meteor graphic: Companies country of incorporation for all land registry titles in Manchester (total = 1,736) compared to the whole of England and Wales (total = 96,773). Source: Land Registry

The UK has no power to compel changes in what were previously territories under British control such as Hong Kong and Singapore. In Manchester, Hong Kong is home to 10% of overseas companies owning property in Manchester, which is five times higher than the proportion seen across England and Wales at 2%.

Silver noted in his report on housing financialisation that many of the new developments were being marketed internationally, with evidence of investment seminars being run in Hong Kong, Singapore and China encouraging investment into Greater Manchester’s housing market. Manchester City Council’s lobbying for Chinese investment, which received a significant boost with the President of China, Xi Jinping, visiting the city last year, may also be a factor in the number of Hong Kong registered companies.

The term ‘tax haven’ is interchangeable with the term ‘secrecy jurisdiction’, which the Tax Justice Network (TJN) describe as. “A secrecy jurisdiction provides facilities that enable people or entities to escape or undermine the laws, rules and regulations of other jurisdictions elsewhere, using secrecy as a prime tool.”

The TJN compile a Financial Secrecy Index ranking the worst offending financial centres around the globe: the 2018 Index contains 112 entries, with top of the index, No. 1, being the most secretive. The British Virgin Islands are ranked 16th, Jersey 18th; Guernsey 10th, the Isle of Man 42nd; Hong Kong 4th and Gibraltar 83rd; these are the secrecy jurisdictions with the greatest involvement with Manchester.

Over 75% of investigations involving land and property by the Metropolitan Police Proceeds of Corruption Unit, in 2015, involved overseas companies registered primarily in UK Crown Dependencies or Overseas Territories.

The ripple effect

The Transparency International UK investigation into the London housing market presented evidence that international investment in the housing market was driving up prices in wealthy London districts, which then had a ripple effect causing housing price and rent increases in surrounding areas. And although Manchester has some way to go to reach the scale of the problem seen in London, there have been huge increases of average rental prices across Greater Manchester, with a study in 2015 showing there had been a 22% rise in just twelve months. A report released this year predicts Manchester will see the largest residential price growth of northern cities in 2018, with property prices set to rise by 6.5% and rents to increase by 3.5%.

Silver says that Manchester is becoming a “safety deposit box for the global elite” and believes that this influx of international finance into Manchester’s housing market can only exacerbate an already severe housing crisis:

“The increasing amounts of rent-seeking finance into the city will further reinforce the housing crisis and the growing inequalities in our society. From the destruction of heritage, through to failure to provide social and affordable housing, to new forms of spatial division, pressures on local services and the destruction of cultural and public life the consequences are now widely known and experienced by many Mancunians. As this investment accelerates so will the crisis that it produces and feeds off.”

Who are these overseas companies owning property in Manchester?

There are five companies that hold 604 property titles in Manchester in July 2018, representing 35% of the total 1736 titles listed as belonging to overseas companies.

Selling Manchester by the Offshore Pound

All five companies are incorporated in tax havens that rank highly on the Financial Secrecy Index, and as might be expected, information is sparse. However, research by The Meteor has uncovered more information on these companies that we will report on in following articles.

At a public meeting prior to publishing his report into housing financialisation in Manchester, Silver said:  “What I have done here is map what has currently received planning permission. I can tell you there are huge second, third, fourth waves of more of these big build to rent schemes in the pipeline.”

With national government and financial watchdogs failing to tackle the corruption involved in offshore companies owning property, and local government backing housing development plans that favour developers and financial investors and fail to address the needs of the people of Manchester experiencing the housing crisis at the sharp end, these problems in Manchester are set to keep soaring skywards.

Conrad Bower

Featured image: The Meteor

First article in a series called ‘Selling Manchester by the Offshore Pound

For more information on the murky offshore world visit the Tax Justice Network website – click here

Or the Transparency International website – click here

Change to article 29 August 2018:  The video to showing the rise in overseas ownership between 1998 and 2018 was added.

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  • Conrad Bower

    Reporting interests include social justice, the environment, and human rights. A staunch advocate for the scientific method and rational debate for understanding the world - he believes only greater public understanding and engagement with the problems affecting society, can produce the progressive change we need. Co-founder of The Meteor.


Reader Interactions


  1. Great reporting. Thanks a megaton !

    It will be interesting to see how the council reacts and behaves- or doesn’t. I don’t want to suggest they don’t sincerely want to do good, but the unintended consequences of visions may call for changes.

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