The Bow Group - a think-tank that was previously a solid backer of the Tories but has recently flirted with UKIP - says it wants sharp restrictions on the sale of homes to foreigners in order to restrain price inflation.
The report claims that investment buyers generally provoke inflation because “they are less price-sensitive, prone to herd behaviour and have considerable buying power.”
It claims foreign investors are even more like this “because of their dependence on intermediaries and ‘experts’ who aggressively market UK housing as an investment opportunity.”
While it accepts this is not a new principle, and can be seen throughout the last 100 years in London, the scale of it is now greater than ever before “with up to 85 per cent of prime property being sold to foreign buyers.”
It says increasing supply through more house-building will have “no effect on price” and is a policy “used erroneously by the property lobby as an argument for an even greater building programme.”
Instead, the Bow Group says Britain should follow the examples of Australia, Jersey, Denmark, Singapore, Hong Kong, China and Switzerland and restrict overseas purchasers.
Specifically it advocates:
- a ban on the foreign purchase of existing homes - “only new properties can be purchased by foreigners”;
- to prohibit foreigners from selling a property for five years after purchase;
- a reciprocity principle, whereby foreign nationals are only allowed to buy in the UK if their home country permits UK citizens to buy property there;
- a restriction of one foreign property per foreign family;
- the banning of ownership of property by foreign companies;
- the prohibition on property purchase by foreigners with criminal records;
- an unspecified percentage limit on the volume of homes in any area that can be foreign owned “to prevent the development of ghettos”;
- limit the percentage of flats in any block that can be owned by foreigners;
- size limits, whereby foreigners would be prohibited (or require special permission) to buy properties over a certain size.
“Whilst a strong free market foundation is essential, foreign and corporate influence on the UK market has hurt UK citizens, and will continue to do so without intervention” says a spokesman for the group.