Once a booming market, the trade in UK ‘Golden Visas’ seems to be on the wane. Despite recent claims that it received a post-Brexit boost last year, today’s latest stats from the Home Office confirm this was merely a temporary blip in a seemingly longer, downward trend.

If you haven’t heard of golden visas before, they’re cash for residency programmes run by over a dozen countries and jurisdictions throughout the world including Switzerland, Bulgaria, Malaysia, Monaco and Malta. The UK’s Tier 1 (Investor) scheme has been running since 2008. In return for a minimum investment of £2 million into government bonds, or share or loans capital of a UK registered company, you can stay here for up to five years. If you fancy staying for good, £5 million will allow you to apply for permanent residency within three years, whilst £10 million will cut that wait down to two.

Until recently this scheme was incredibly popular. From a relative trickle in 2008 (138), the number of visas awarded soon rose dramatically to 2,995 in 2014. Although there’s no publicly available information on the total amount invested, it must amount to at least £3.7 billion based on the minimum amounts applicants have been required to invest.

Curiously, the scheme has been particularly popular for applicants from Russia and China, two countries with notorious corruption problems. Accounting for only 34 per cent of visas awarded in 2008, the number of visas awarded to these nationals rose to a peak of 2,099 (70 per cent) in 2014. What’s even more curious is that these numbers plunged off a cliff in 2015 and have dropped ever since.

There are several competing explanations for this.

The first argues that it’s been caused by an increase in the minimum investment amount in 2015, from £1 million to £2 million. Supposedly the scheme’s increased cost was too much to for applicants to stomach, pushing them to more affordable programmes elsewhere; however, this doesn’t stack-up.

Even before 2015, the UK’s scheme was relatively expensive compared to many of its competitors. Portugal, for example, has been offering Golden Residence Permits for as little as EUR 250,000 (£211,000) since 2012, whilst the US’ EB-5 Program offers a route to permanent residence from USD 500,000 (£402,000). Conversely, at £2million the UK’s programme still remains competitive compared to the likes of Australia’s Significant Investor Stream, which requires a hefty AUD 5 million (£3 million) from those applying. And at the end of the day, if you’ve got £1 million to invest in a new life another million isn’t going to break the bank.

The second explanation suggests the change could reflect wider economic and political trends, especially in Russia. In 2014 its economy tanked, pulled down by falling global oil prices, economic sanctions and a weakening rouble. At the same time capital flight from the country soared to over $150 billion, with much of it reportedly being invested into high-end London property. Undoubtedly there would have been many who thought buying residence at the same time as bricks and mortar would be a worthwhile insurance policy. Since this rush, plunging oil profits may have put the UK’s scheme out of reach of many millionaires with fewer disposable cash assets at hand. Whilst this is a more persuasive argument than the first, I’m still not convinced.

During 2014 there was an increase in visas being awarded across the board to people of almost all nationalities, not just Russians. In fact, as a proportion of total visas awarded their relative number actually fell, with Chinese investors accounting for almost half of all successful applicants during that year (see graph below). In a further blow to this theory, as capital flight from China increased in 2015 the number of its citizens applying through the scheme still dropped, just like the number of applicants from almost every other country. Had there been a relationship between capital flight and visas, you would have expected to see their numbers increase significantly.

In short, there must have been something else to explain the 2015 ‘cliff face’.

The final and most persuasive explanation is that the dramatic drop was caused by a tightening of the checks on applicants’ sources of wealth. Until early 2015, those applying could be awarded visas before opening a UK bank account. Why is this a problem? We understand that a number of banks took the visa as a rubber stamp from the Home Office that an applicant’s wealth was legitimate. Conversely, the Home Office took it for granted that the applicant would actually open a UK bank account, which would involve thorough due diligence checks. As a result, there was effectively a ‘blind faith’ period where there were extremely weak checks on who the investors were and where their money came from.

In early 2015 the UK Government changed the rules, so now applicants have to open a UK bank account before they apply for a visa, closing the previous ‘blind faith’ loophole. As a result, today’s figures and those from 2015 may signify the new ‘normal’.

In policy terms you might think this is job done: there was a risk, it’s been mitigated, move on. Wrong.

If the UK still wants to command a reputation as a respectable international financial centre it needs to show that impunity can’t be achieved with the passage of time. As a minimum there should be thorough retrospective checks on all applicants who were granted visas before 2015. But more fundamentally there is a question as to whether this scheme should exist at all.

At a time when people are risking their lives to escape from hellish conditions beyond most of our comprehension, many will wonder why the UK is offering fast-track residency according to the depth of one’s pockets instead of the urgency of their need. Canada has taken a lead on this, closing its own investor visa programme back in 2014. Maybe it’s time the UK the learnt from its Commonwealth cousin and followed suit.