Is this true? The Guardian seems to think so: Guardian article
It all comes down to data. We need to check how widespread this really is. If anything new is being bought up by foreigners and then left vacant… that is a problem for a number of reasons.
One of which is quality control. Recent articles have been published about the poor quality of housing produced by some of Britain’s leading home developers. The more you build for absentee homeowners, the more you don’t care about quality and the bigger this problem becomes.
Restricting foreigners from buying property in the UK may not solve the problem
The one issue I see with the Guardian article is that there is a circle here. Foreigners buy up new housing – this puts upward pressure on prices as demand exceeds supply – encouraged by the higher prices, developers build more properties – these are bought by foreigners – this puts upward pressure on prices so more get built by profit savvy developers – you see where this is going?
If the government restricts foreign ownership of property, this means foreign buyers can’t buy up new developments – this means downward pressure on prices – this means developers are discouraged from building more property – so either way, there are not going to be enough new houses for UK residents.
Do we need a bit more protectionism?
Are countries a bit like families? I mean – there are rich people that could come into your house and offer you tonnes of money for your house and furniture, plus all your kids’ toys. You have the power to say no and prevent this from happening. In effect, by doing so, you are voting for protectionism and local only ownership. Is that a bad thing? In this context, probably not. I think the answer is that in a completely global economy where there is a complete free movement of labour and capital, many will get completely marginalised. On the other hand, complete protectionism and nationalism have their own problems. A happy medium is required and that medium is always moving, a little like interest rates. There is no perfect interest rate, for capitalism to work, interest rates move up and down as required. Same with inflation. Perhaps that is true for protectionism – at the moment, at least according to the Guardian article, there is not enough. Time for change?