When a TV documentary from channel 4 aired early this year , it involved under cover reporters , emphasising london's property boom is partly being funded, by overseas buyers, laundering money.
Two undercover reporters posed as unscrupulous Russian government official called “Boris” and his mistress “Nastya” whom he wanted to purchase an upmarket property in London for.
The couple [featured in video below]– Russian anti-corruption campaigner Roman Borisovich and Ukrainian investigative reporter Natalia Sedletska – viewed five properties ranging in price from £3m to £15m, on the market with five different west London agents, in Kensington, Chelsea and Notting Hill.
Despite being made aware they were dealing with ill-gotten gains, the estate agents agreed to continue with a potential purchase. In several instances the estate agents recommended law firms to help a buyer hide his identity.
One estate agent named a “very, very good lawyer … the last person I put them was another minister of a previous Soviet state” in a deal worth £10m.
The estate agents suggested that in the capital secretive purchases of multimillion pound houses are common. One claimed that 80% or more of his transactions are with international, overseas-based buyers and “50 or 60%” of them are conducted in “various stages of anonymity … whether it be through a company or an offshore trust”.
"Those caught on camera" included estate agents from high street chains Winkworth, central London specialists Marsh & Parsons which advertises itself under the slogan “The Only Way is Ethics”, Domus Nova , Chard and Bective Leslie Marsh which have been used by fashion designers and actors.
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So what can be done apart from prosecuting the guilty, well technology can offer transparency,"a indelible digital paper trail" , speed of transaction and secure payment channel in the form of a digital currency called bitcoin.
How Bitcoin works in 5 mins
There are a growing number of digital currencies, the most well-known is Bitcoin. They are a purely electronic way of making payments anywhere in the world. At present only a very small percentage of the population use them for this purpose. The Bank of England has written two Quarterly Bulletin articles which explain in more detail how digital currencies work and the economics behind them.
BoE Digital currencies: how do they work and what makes them different?
It is a great undertaking to integrated Bitcoin and Blockchain technologies into the real estate industry.
The president of the International Bitcoin Real Estate Association, Ragnar Lifthrasir say there is great potential of Blockchain technology for development in the real estate industry. His team wants to create a digital alternative for government land and title registries.
“If a buyer and a seller of a property both agree to use Bitcoin Blockchain solutions instead of government solution, nothing will stop them as long as they both agree to use it”, states Ragnar Lifthrasir, the President of International Bitcoin Real Estate Association.
Ragnar has few ideas about the exact ways of integrating innovations into the real estate industry to make it safer and simpler.
"There are three ways we could use Blockchain technology in the real estate: purchasing real estate; escrowing real estate; recording the transfer of ownership of real estate onto the Blockchain.
Right now, none of those being commonly done but we are working on it to change the situation.