Labour is considering moves to levy higher taxes on foreign buyers of UK homes, as a senior Conservative blamed their party’s abolition of housebuilding targets for woeful results in last week’s local elections.
In another sign that Labour believe Rishi Sunak is politically vulnerable over the housing crisis, the party has devised a series of policies aimed at making it easier for UK residents to buy homes.
One plan would be to increase the 2% surcharge on stamp duty that overseas purchasers have to pay on UK homes.
Another would introduce a rule making new developments available for purchase to first-time buyers only for a fixed period – a time to be agreed by the local council with the developers.
Overseas buyers would also be banned from purchasing more than 50% of the homes in a development.
The ideas, yet to be confirmed but expected to be adopted by Labour at the next election, follow a huge increase in the number of UK homes bought by overseas investors, often from Asia, pricing out local buyers.
The moves come as Simon Clarke, the former levelling up secretary, castigated Sunak for scrapping compulsory targets for housebuilding by local authorities under pressure from MPs, despite the crisis in the numbers of homes available.
Clarke, who served in Liz Truss’s cabinet, told BBC Radio 4’s Today programme that dropping the targets was “a major mistake” and played a significant role in the Conservatives’ loss of around 1,000 net seats in the local elections.
“In these results there is one theme that stands out above all others for me … we cannot out-nimby the Liberal Democrats and the Greens, so one aspect of policy that does need to change and change as a matter of urgency is our housing policy,” he said.
“So we can get back to building the homes that people need, making the case, the moral, economic, political case, for building the homes that a growing population requires rather than, I’m afraid, trying to pander to the public’s worst instincts on this question, which isn’t working.
“I would say that dropping those targets was a major mistake and I would like those restored.”
While Sunak dropped the targets to avoid a potential backbench rebellion in the Commons, in a later interview with Conservative Home, the prime minister said he had been persuaded against them by hearing from views of Tory councillors when he stood for the party leadership against Truss last summer.
At the final prime minister’s questions before the local elections, Starmer castigated Sunak for the move, saying the scrapping of target on top of higher mortgage rates was “a hammer blow” to people hoping to buy a first home.
“He’s kicking them when they’re down, because his decision to scrap housing targets is killing the dream of home ownership for a generation,” Starmer said.
