Foreign criminals are laundering billions of pounds by purchasing expensive properties - pushing up house prices, the National Crime Agency has said.
Donald Toon, director of the agency's economic crime command, told The Times newspaper he was alarmed by the number of homes registered to complex offshore corporations - some of which have been bought with laundered money.
The Treasury has received a £150 million windfall in the past three months from a tax on properties purchased by companies, trusts and investment funds, rather than individuals, supporting Mr Toon's claim.
When the tax was first in operation in 2013/14, it raised £100 million from 3,990 houses.
Mr Toon told The Times: "I believe the London property market has been skewed by laundered money. Prices are being artificially driven up by overseas criminals who want to sequester their assets here in the UK."
Hundreds of billions of pounds are laundered in the City every year, according to the National Crime Agency, and investigations are intensifying into the matter.
Mr Toon added: "Prices of high end property are being artificially driven up by the desire of overseas criminals to sequester their assets here in the UK. What they are doing is distorting the market.
"If they (estate agents) have a suspicion that there may be money laundering involved then they absolutely should be submitting a suspicious activity report. You are at risk of committing a criminal offence if you do not do that."