London property house prices
London's roaring property market is being used by the wealthy and corrupt to launder their money.Reuters

Anti-corruption campaigners Transparency International have just confirmed what we already knew: London is a giant washing machine for filthy cash.

The world's misappropriating oligarchs, mafia bosses, wannabe Jordan Belforts, corrupt regimes, terrorists – their grubby money goes into London's property market and comes out clean and crisp.

Through networks of offshore shell companies, illicit foreign cash is funnelled to London's brothel of wealth managers, who invest it in the city's roaring property market. As they pump cash into the housing market, which has a severe shortage of supply, property prices soar ever higher.

A comprehensive Transparency International report, called Corruption on Your Doorstep, found that "75% of properties whose owners are under investigation for corruption made use of offshore corporate secrecy to hide their identities".

Over £180m worth of property in the UK, most of which is in London, has been brought under criminal investigation since 2004 because it was suspected as being proceeds from corruption. The average price of the property was a cool £1.5m. Across the English capital, 36,342 properties are owned by offshore haven companies, often used by money launderers.

London is being used like a prostitute, except for one significant difference: it ends up paying the cost of being screwed.

House prices in London have rocketed in recent years for a number of reasons. There is a serious dearth in supply. The economy is recovering again and mortgage credit is cheap, so demand for home purchases is rising. London's population is also growing rapidly. But there's one more major factor: foreign investment is flooding in.

Some of it is legitimate, such as Chinese savers looking for decent returns on their pensions. A lot of it, however, is not: the corrupt know London's property market is a safe investment for their ill-gotten gains. And as they help force up prices with their artificial investments, everyone else suffers.

In London, the average price of a home hit £502,000 in December 2014, according to the Office for National Statistics (ONS), an annual growth rate of 13.5%. Excluding London and the south east of England, the average price is just £208,000, with an annual growth rate of 7.4%.

Rents shoot up, forcing everyday workers further and further out from the centre. The housing benefit bill for those living in what's left of the city's dwindling social housing gets bigger, leaving taxpayers – of which the offshore elite are not – to pick up the tab. Most working people can't afford to buy in London anymore, as young people struggle to get together the vast deposits required.

Profit-conscious developers then target the demand for high-end property, meaning they build expensive homes rather than affordable ones as they chase foreign investment. That leaves fewer homes that ordinary folk can afford to buy and inner London's development space taken up by luxury ones, which are useless to the vast majority of Londoners.

People now have to leave the city and commute in – though prices around London are not cheap either thanks to the spillover effect – and pay extortionate travel costs, as well as lose time from their days which could be spent at leisure with their friends or at home with their families.

Inner London was once filled with a rustic muddle of grizzled old working class Londoners, mad creative sorts and artists, ramshackle markets, yuppies, and all manner of crackpots and geniuses. It was the city everyone wanted to live in the centre of.

Now it's the city nobody can live in the centre of, a hollowed-out vacuum where a soul has been replaced with the pointy-faced wives of oligarchs on their way out shopping for gaudy designer tat.

You shouldn't get too sentimental about things changing. But the changes happening in London aren't part of the city's natural evolution. It is a synthetic change forced on everyone by a small, corrupt and very rich group of people with only their own financial interests at heart.

As a wealthy criminal elite and its helpful friends in finance enjoy spoils from a city they spoiled, overlooked by governments that are powerless or unwilling to drive them out, it's everyone else who is left to live in London's ruins.