The UK’s Ministry of Housing, Communities and Local Government has downgraded a Labour manifesto commitment to restrict overseas purchases of new-build homes from a firm pledge to “an option under consideration,” as first reported by the Financial Times. The shift is most relevant to overseas buyers eyeing new-build flats in London and other major UK cities, where off-plan sales to non-resident investors — particularly from Asia — have been a significant funding source for large apartment developments.
Labour’s original 2024 manifesto proposal, first floated by Keir Starmer in 2021 while Labour was in opposition, would have restricted market-sale new-build homes to first-time buyers only for the first six months after completion, and capped overseas-investor purchases at no more than half the homes in any single development. That policy specifically targeted flats being sold to non-resident investors. More than two years on, the government now frames giving local residents first refusal on new-build homes as merely one option it is still considering, rather than a committed measure.
Property developers, especially in London, have opposed the restriction, arguing that off-plan sales to overseas buyers are essential to the financial viability of large schemes at a time of weak first-time-buyer demand and no replacement for the former Help to Buy scheme. Liberal Democrat housing spokesperson Gideon Amos criticised the government for quietly dropping the commitment without a formal announcement or explanation, arguing the move risks locking another generation out of home ownership.
In place of the foreign-buyer curb, the housing department is pointing to its existing and planned support for first-time buyers: the current 2% stamp duty surcharge on non-UK-resident buyers in England and Northern Ireland, a new Mortgage Guaranteed scheme, a planned First-Time Buyer Isa, the stamp duty exemption for first-time buyers up to £300,000, and the Bank of England’s recent easing of its loan-to-income lending limit. According to Traders Union’s own earlier reporting, the retreat on foreign-buyer curbs is one of several 2024 manifesto commitments — spanning housing, political-donations reform and Thames Water — that the government has stepped back from since taking office, with ministers arguing a fuller 10-year housing programme will follow later this year.
References
Traders Union – UK housing policy retreat leaves foreign buyer curbs on new flats as option
