Opinion: Its time to ban foreign landlords from London's housing market

London’s housing crisis is not a mystery. We know what’s driving it: a toxic mix of chronic under-supply, speculative investment, and distorted demand fueled by the world’s wealthy elite using our homes as financial assets rather than places to live. And yet, one of the most damaging forces behind it all, foreign ownership of London homes remains largely untouched by policy.

Regent Street, London. Photo Credit: Peter Spencer

By: AW, PhD Economics

It’s time that changed.

As an economist, I’m well aware of the value that foreign capital can bring to a national economy. Investment drives growth, creates jobs, and fuels innovation. But there is a critical difference between productive investment and capital that simply hoards housing stock for wealth preservation. Unfortunately, the latter is exactly what has plagued London’s residential market for more than a decade.

Foreign investors, often ultra-high-net-worth individuals from outside the UK, have poured billions into prime and increasingly, non-prime London property. Entire blocks of flats sit empty. Properties are bought and sold not as homes, but as tradeable commodities, inflating prices far beyond what local workers and families can afford.

This isn’t just anecdotal. The data is unambiguous: in many central boroughs, more than 10% of homes are owned by overseas landlords. In some newly built luxury developments, that number skyrockets to over 50%. Meanwhile, median rents are surging, homeownership among young Londoners is collapsing, and key workers are being forced out of the communities they serve.

This is not a healthy market. This is speculative dysfunction.

The usual counterarguments fall flat. Some claim foreign buyers fund construction, but what kind of construction? Gated luxury towers, sold off-plan in Singapore and Dubai, that contribute nothing to solving the city’s housing shortage. Others argue that banning foreign ownership would scare away international capital. Let me be clear: if your economy is dependent on wealthy non-residents buying up its homes and leaving them empty, that’s not strength it’s fragility.

Canada has already recognized this. In 2023, it enacted a temporary ban on foreign ownership of residential property to cool the market and restore access for residents. New Zealand took similar action. London should follow suit and not just as a temporary experiment, but as a permanent shift toward housing policy that prioritizes people over portfolios.

There are many tools available. We could ban non-residents from owning residential property altogether, as some nations do. We could impose an escalating vacancy tax on homes left empty for more than 6 months. We could heavily tax capital gains on non-resident sales. But what we cannot do is nothing.

Housing is not a luxury. It’s a basic need, and when left to the mercy of global capital, that need is commodified, corrupted, and, ultimately, denied to those who need it most. The market has failed to self-correct. The government must intervene.

I am not calling for isolationism or anti-foreign sentiment. London is and should remain a global city. But it must also be a livable one. We cannot continue to watch entire generations priced out of their own city while absentee landlords reap tax-free gains from vacant penthouses.

The moral case is clear. The economic case is undeniable. And the political moment is now.

Let’s take back London’s homes for the people who live in them.

Note: The author has chosen to remain anonymous; however, Economicuk.com is aware of their identity.