The UK, like many other developed countries, is stuck in a “Property Doom Spiral” — where house prices keep rising, and there’s not enough supply to meet demand. Fixing this problem needs bold and radical solutions.
Spain’s Prime Minister, Pedro Sánchez, has suggested one: a 100% tax on foreign property buyers. His plan is to stop foreign investors from buying homes and making it harder for locals to afford them. In 2022, non-EU buyers, including many Britons, bought 27,000 properties in Spain. Most of these weren’t homes for personal use but investments to sit empty or earn rental income. By making these purchases too expensive, Sánchez wants to ensure houses are used as homes, not financial assets.
This idea might seem appealing for the UK, especially in London, where foreign investors have bought up significant amounts of property. On the surface, taxing foreign buyers could give locals a better chance, but there are bigger issues to consider.
Foreign investment is an important part of the UK’s housing market. Many new building projects depend on funding from overseas. If this capital disappears, construction could slow down, making the housing shortage even worse. A high tax, like Sánchez’s, might scare off not just speculative buyers but also investors who help finance much-needed new homes.
There could also be international consequences. Other countries might introduce similar taxes, affecting British buyers who want to purchase homes abroad, like retirees moving to France, Spain, or Portugal. The global nature of property markets means these actions could backfire.
Still, Sánchez’s proposal raises an important point: housing shouldn’t just be an investment. It’s a basic need. To solve the UK’s housing crisis, we need real change. This includes updating restrictive planning laws, speeding up construction, and involving more developers in building new homes.
Taxing foreign buyers might sound like a quick fix, but it won’t solve the root problems of affordability and availability. The real solution lies in making long-term changes that ensure homes are for people, not just for profit.