That's one of 10 ways the advocacy group recommended to stop criminals from laundering the proceeds of crime through British real estate. In addition, there should be a cap on buying property in cash, and estate agents should do background checks on the purchaser as well as the seller, Transparency International said Wednesday.

The United Nations has estimated that law enforcement only spots about 1 percent of total money-laundering flows, the group said. Even so, in the last decade British police have investigated more than 180 million pounds ($278 million) of property. A big challenge for authorities is that many luxury properties are owned by companies registered in tax havens that don't disclose who their true owners are, making it hard to identify illegitimate investments.

"Our data suggests that the sources of foreign investment for the highest-value U.K. properties tend to be from the regions of the world with substantial domestic public-sector corruption challenges," said Nick Maxwell, head of research at the group, a nonprofit that monitors corruption.

Investors from Eastern Europe and Russia are among the biggest buyers of high-end residential London properties, according to the report.

The U.K.'s "political stability, light-touch regulations and privileged connections with well-known secrecy jurisdictions" once part of the British empire, make it a popular destination for ill-gotten wealth, the report said. Hundreds of billions of pounds are laundered through the U.K. every year, according to U.K. National Crime Agency estimates.

While the British government is drafting legislation requiring U.K. companies to disclose their true owners through a registry, it will have limited effect since overseas territories have so far refused to follow suit. More than 75 percent of the properties investigated since 2004 were owned by offshore companies that hid their true proprietors' identities, the report said.

There are 40,725 properties in London that are owned by foreign companies, and 89 percent of those are based in tax havens such as the British Virgin Islands, Jersey and the Isle of Man. Offshore companies can be created for $1,000 in less than 48 hours, sometimes without identity documents, according to the research.

The U.K. attracts the most foreign investment from all European real estate markets, according to KPMG, securing an estimated 24 billion pounds in the first half of 2014, compared with Germany's 16.2 billion pounds as the second largest.

The NCA is investigating why a new tax of as much as 143,750 pounds a year that luxury-home owners pay to keep their names secret yielded 100 million pounds last year, almost five times more than expected. The government plans to publish its first national risk assessment of money laundering and terrorist financing this month, which will look at how estate agents can help more, according to a Treasury spokesman.

"The U.K. has undoubtedly made impressive strides to improve company transparency," Maxwell said. "However, there remains a clear transparency gap in terms of offshore secret companies'" investments in property.