MPs have blamed the Government’s “totally inadequate” attempt to prevent the UK property market from being exploited by international money launderers, saying the UK has “laid out a welcome mat” to criminals.

The Home Affairs select committee said in a report that the current tools for detecting suspicious activity across the financial services sector and connected industries, such as real estate, are overloaded to the point of being “completely ineffective.

It called for an immediate and radical overhaul of the systems used to track seized assets.

Keith Vaz, committee chair and Labour backbencher, said the current proceeds of crime legislation have failed as £100 billion was being laundered through the county every year. This is the equivalent to the GDP of Ukraine, according to Vaz.

Last year there were 1.2 million property transactions in the UK. But those 2.4 million buyers and sellers generated just 355 suspicious activity reports, according to the National Crime Agency (NCA).

“Investment in London properties is a major route which tarnishes the image of the capital,” Vaz said.

“Supervision of the property market is totally inadequate, and poor enforcement has laid out a welcome mat for launderers and organised criminals,” he added.

How is money laundering done through property?

The NCA system of reporting suspicious transactions brings together information from banks and law enforcement agencies. It is overwhelmed with nearly 382,000 reports per year, yet it was designed to manage no more than 20,000.

“This has rendered the whole system a futile and impotent weapon in the global fight against criminal financing, with no indication from the Home Office as to when a new state of the art system will be purchased,” Vaz said.

Henry Pryor, RICS and housing market commentator, said in his opinion it was “without question” that London property market was a destination for laundered money.

“I would say that if, for example, the buyer of a property was the second son of a world leader in a country in the middle of South America—how does he have £8 million to buy a flat in Mayfair—personally I would be suspicious,” Pryor said.

“But it does not seem that my professional colleagues are as sceptical as I am, which is unfortunate,” he added.

A spokesman for the NCA admitted the system was “not effective or efficient”, but the organisation is awaiting a Home Office review before deciding how to updatetheir reporting system.

A Home Office spokesman said: “We are committed to attacking criminal finances, making it harder to move, hide and use the proceeds of crime, as set out in the Serious and Organised Crime Strategy.

Outrageous property deals in pictures Show all 15 1 /15 Outrageous property deals in pictures Outrageous property deals in pictures The Park Lane townhouse set to become one of the UK's most expensive student flats at £4,000 a week A town house situated in Park Lane, one of the most affluent places in London, is about to become the capital’s most expensive student residence. Most of London students usually live in halls of residence before moving on to house-share. For this reason it is fair to say few will able to afford the 3,540 square foot three-bedroom flat, which is available for £4,000 a week, £16,000 per month or £192,000 per year. Wetherell Outrageous property deals in pictures London's most expensive flat goes on sale at Buckingham Palace near Buckingham Palace priced at £150m A luxury flat in London’s historic Admiralty Arch, which overlooks Buckingham Palace, could sell for up to £150 million. If sold for that price, the 15,000 sq ft apartment will become London's most expensive flat, topping One Hyde Park, a flat which sold for £140 million in 2014.The Grade I listed property boasts 12 bedrooms and 12 bathrooms Outrageous property deals in pictures ‘Little White House’ inside the US embassy complex in London goes on sale for £2.5m A luxury home inside the US embassy complex has gone on sale for £2.5m. The property is said to be the most “protected home in Britain” and any visitor is asked to carry an identity card at all times. The complex has patrolling US marines, a 24-hour British police presence, checkpoints, anti-tanks blocks and CCTV.But potential buyers looking for a fortress should not get their hopes up as all the security will disappear once the US embassy moves to a new site in Nine Elms in 2017. The home, located at 4 Blackburne’s Mews near Grosvenor Square, dates back to 1732 and owes its nickname to its white façade, grand entrance and sweeping staircase as well as its proximity to the US embassy. It provides nearly 3,000 sq ft of living space and benefits from access to communal gardens. Wetherell Outrageous property deals in pictures First London luxury flats to contain their own private art gallery with prices going from £3.8m up to £7.7m The first private luxury apartment building in London with its own private art gallery has been unveiled in March. The Chilterns at 24 Paddington Street contains 44 luxury residences, the majority of which were sold in 2013. It contains a signature restaurant, a 24 hour-hotel style concierge service, a gymnasium and sauna and a private cinema. The new art gallery, with original pictures of the area by David Bailey, is part of the lobby of the building and is “one of the most exciting and unique features of the Chilterns”, according to Stephen Conway, CEO of Galliard Homes. With prices going from £3.8 million up to £7.7 million for a three bedroom flat, the residence is located between the local shops of Marylebone High Street and Baker Street. Outrageous property deals in pictures Margaret Thatcher's Belgravia home is up for sale for £30m Margaret Thatcher’s six-floor townhouse in Belgravia is on the market for a cool £30 million. The Grade II listed building on No. 73 Chester Square, one of London’s most prestigious addresses, now boasts a lift, a newly constructed mews house with a roof terrace and a private garage after a three-year refurbishment by Leconfield, a development and construction company. Some features from Thatcher’s time at the property remain. The layout and design of the formal dining room and interlinking study on the ground floor has been reinstated exactly as the Iron Lady had it during her 22 years at the property, from 1991 until her death in 2013. Outrageous property deals in pictures Tiny London house that is just 10ft wide goes on market for £800,000 A tiny terraced house that measures no more than 10ft wide has gone on the market in south London for a staggering £800,000. The house, generally labelled "unique" by estate agent Foxtons, looks all the more unusual because it is sandwiched between two regular-sized homes. It doesn't even have a proper back door - images of the interior suggested renovators had sought to maximise the property's space by including a folding aperture to the similarly narrow back garden. Outrageous property deals in pictures The Mayfair penthouse that sold for £30 million A Mayfair penthouse on Albemarle Street, one of Mayfair's oldest roads, sold to a mystery buyer for £30 million in December. The 5,845 sq ft, three-bedroom family home is thought to be one of the most expensive properties sold in the capital this year, and comes with an annual service charge of £61,000. supplied by Estate agent Peter Wetherell Outrageous property deals in pictures The dilapidated pre-fab 'shed' sold for nearly £1 million A pre-fabricated bungalow in south-east London has sold at auction for just under £1 million. The 1950s property in Peckham comes with 0.6 acres of land, is in need of renovation and has no fitted bathroom, but still sold for £950,000. A guide price of £590,000 was initially set, but increased rapidly during the bidding. Google Maps Outrageous property deals in pictures The starter home flats that went for a combined £60 million Some 215 “affordable” starter homes, specifically designed for first time buyers, sold out in just three hours in November, after dozens of aspiring homeowners camped overnight and queued in bad weather to get their hands on the flats. The starter home flats at Trinity Square by Galliard Homes went for a combined £60 million, or an average of £700 per sq ft. Londoners looking for affordable housing did not hesitate to camp out for up to two days to snag a flat, despite the fact that the project will not be complete for another two years. Galliard Outrageous property deals in pictures The longest lateral flat where H.G wells hosted a book club: yours for £3.65m The 2,200 square foot apartment in Chiltern Court in Marylebone was also home to author Arnold Bennett and political cartoonist David Low. Now on the market for £3.65 million through Rokstone agency, the four-bedroom flat has been refurbished into a luxury apartment, providing an exceptional 40 meter window frontage and depth. It claims to be the longest and most outstanding lateral flat - ones that stretch the full width of a building, or sometimes across two buildings - currently for sale in London’s West End. Rokstone Outrageous property deals in pictures Gatti House: the flats with celebrity links and private "pizza" lift that sold for a collective £16.5 million Celebrity links, a famous history and a private “pizza lift” has helped set a new record for price per square foot for a block of flats in central London. The four flats have sold for a collective £16.5 million at Gatti House on London’s Strand. Gatti House, a magnificent grade II building built in 1867, was sold as four separate apartments priced from £2.95 million to £5.95 million by CBRE Residential and Beauchamp, which has completed the last remaining sale. CBRE Residential and Beauchamp Outrageous property deals in pictures London’s most expensive office A newly refurbished office in the heart of Mayfair measuring 6,000 sq ft was unveiled by Enstar Capital in October. At £500 per sq ft, it is set to be the most expensive commercial fit out ever undertaken in the West End, according to the developer. The workspace on 54 Brooks Mews features gold-plated executive washrooms inspired by Armani-hotel in Italy, timber flooring imported from a 16th century monastery in Tuscany and an Art Deco entrance restored with a new “54” entrance logo replicating Steve Rubell’s famous “studio 54” nightclub logo from the seventies. While the director’s floor include a rooftop terrace dressed with loungers and an outside meeting and dining table. Enstar Capital Outrageous property deals in pictures Former garage in Mayfair become world’s most expensive mews house at £24m in Mayfair In September, the world’s most expensive mews house, in Reevews Mews, sold to a Qatari buyer for an eye-watering £24 million. Outrageous property deals in pictures A penthouse where you canoe from your front door, yours for £16.95 million London luxury dockside complex located on Chelsea creek is due for completion by the end of 2016. But its luxury flats are already on sale including this penthouse yours for £16.95 million. It’s future residents will be able to slip down the river for a work out on the water at anytime of the day. Outrageous property deals in pictures The only property in London too expensive for the city’s super-rich property buyers A 45 bed-room mansion near Hyde Park, previously owned by a Saudi Prince, received a private bid for £280 million. If accepted this would have made the property he most expensive single home ever to be sold in Britain. It was originally listed with an asking price of £300 million –more than double the price of the UK’s second most expensive home.

“The Government seized a total of £1.2 billion from criminals between April 2010 and March 2016, with more assets recovered in 2015-16 than ever before.”

Some 36,342 properties in London have been bought through hidden companies in offshore havens, according to a comprehensive study carried out into the long-suspected money laundering route through central London real estate, by Transparency International, an anti-corruption organisation.