Foreign buyers could face restrictions on UK property

26/09/2017 John Evans,

Foreign buyers could be confronted by tough restrictions on buying British property under plans being considered by the Treasury in an attempt to help first-time buyers at home.

Policies could be announced shortly as helping younger Britons to get on the housing ladder becomes a major part of the Conservatives’ autumn political drive.

A large proportion of new-build flats being purchased off plan by particularly Far Eastern buyers – China, Hong Kong, Singapore, and Malaysia – is becoming an issue, Whitehall sources indicated, according to reports.

The prospective move follows calls currently by leading UK politicians for curbs on foreign buyers, although it is admitted that no controls are possible on citizens of EU member states until after Brexit.

Foreign Secretary Boris Johnson has said rules restricting foreign buyers from snapping up property could be imposed only when Britain leaves the bloc.

He said: “It is often pointed out that the price of housing in certain parts of London may be increased by buyers from overseas. But there is no point in putting any kind of tax on foreign buyers, because the inhabitants of 27 other countries cannot legally be treated as foreign.”

Vince Cable, the Liberal Democrat leader, called for a “fierce” tax on overseas residents buying British property. Britain “must end the stranglehold of oligarchs and speculators in our housing market”.

Property buyers from several countries including Russia have found UK properties significantly cheaper due to the steep decline in the pound sterling since the Brexit vote.
Russians are getting a discount of about 20 percent on UK properties due to the fluctuation in currencies of both the countries. In the case of EU nationals, property is 16 percent lower.

At the same time, Brexit is overshadowing UK house prices, which grew at the slowest annual pace in more than five years in September. Asking prices for London alone have dropped 3.2 percent in the past year, according to property website Rightmove.

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