Labour to cap foreign sales of new homes

In her first speech as shadow housing secretary, Lucy Powell introduced Labour's plans to limit the number of new homes sold to foreign investors. Will that really make a difference to the UK's housing crisis?

In her speech at the annual party conference, Lucy Powell outlined Labour's plan to help first time buyers with a cap on foreign purchases of new developments.

She promised to change England's planning regulations so that no more than half of homes in new developments can be sold to foreign investors. preventing properties being sold off plan before local people can buy them.

​If the definition of a 'foreign investor' is applied in the same way as the current stamp duty rules. the proposed restriction will include UK expats as well as foreign nationals.

Under the plan, first time buyers would also be given "first dibs" on newly built properties, but without saying for how long.

Other proposed changes include a re-definition of 'affordable housing', linking affordability to local wages rather than average market rates.

Councils would be given expanded powers to acquire land for housing at agricultural rates instead of the present formula linking agricultural rates and development values.

In the crosshairs is "the outrageous practise of foreign hedge funds purchasing swathes of new homes, off plan".

Comment

Over the last thirty years, the UK has built three million fewer homes than in the previous thirty. Over the same period, the population has increased by nine million. The UK has now reached the point where it needs to build 300,000 homes a year just to stand still. That's a city the size of Coventry. Every year. Beyond reforms to local authority land acquisition, the speech offered little in the way of a solution to the basic issue - the shortfall in new supply.