Sunday, 28 September 2025

If you want, I can: (a) pull together a short annotated bibliography on the most rigorous empirical papers about foreign buyers and house prices (4–6 papers), or (b) draft a one-page policy brief (700–900 words) aimed at a UK parliamentary committee that lays out the same evidence and the recommended interventions. 

You said:
Both

Executive summary (≤60 words): Foreign purchasers affect prices in geographically concentrated segments (high-value central locations and new-builds). The UK has fiscal and transparency tools (non-resident SDLT surcharge; ROE), but enforcement gaps and trust-based loopholes limit effectiveness. Policy should prioritise measurement and enforcement, place-based targeted interventions, and supply-side reform. SSRN+2GOV.UK+2

1. Problem statement & evidence

International capital purchases of UK residential property have risen in visibility and scale and are concentrated in certain submarkets (prime central London, new build developments). Rigorous empirical work (e.g., Sa) finds positive local price effects in affected areas, though magnitudes vary by dataset and specification. Crucially, foreign purchasers are heterogeneous (sovereign investors, private individuals, corporate wrappers), and their incidence is low in aggregate but concentrated spatially, making average national effects misleading. SSRN+1

2. Measurement & enforcement gaps

The UK introduced the Register of Overseas Entities (ROE) in 2022 to improve beneficial-ownership transparency, and maintains Land Registry datasets identifying overseas companies. However, investigative analyses show large volumes of property owned via opaque trusts and low fine collection rates for ROE non-compliance — suggesting weak enforcement and substantial measurement error in current official estimates. Any policy that targets foreign ownership must first close these data and enforcement gaps. GOV.UK+2Financial Times+2

3. Policy instruments and trade-offs

Options used internationally and domestically include:

  • Fiscal surcharges (UK non-resident SDLT + additional rates): Raises transaction costs and generates revenue; can be avoided via corporate wrappers or legal residence changes. GOV.UK

  • Ownership prohibitions / temporary bans: Canada (since 2023) and Australia (temporary measures from 2025) have adopted direct prohibitions on non-resident purchases of established dwellings in defined areas. These can reduce targeted demand but risk legal/retail investor flight, reduce new-build finance, and may have limited effect if foreign buys are a small share of transactions. Justice Laws Website+1

  • Transparency & anti-avoidance (close trust loopholes; strengthen ROE enforcement): Improves targeting and enables taxation/enforcement but requires resourcing and legal tightening. Evidence shows this is a necessary precondition for effective targeting. Financial Times+1

  • Place-based tools (vacancy taxes; second-home taxes; targeted restrictions): Less distortionary nationally and better at addressing local overheating, but require accurate occupancy data and administrative capacity.

4. Recommended strategy (sequenced, evidence-based)

  1. Prioritise measurement & enforcement (short term, prerequisites):

    • Close trust reporting loopholes (public trust registers or at-minimum more comprehensive beneficial-ownership disclosure for trusts holding real estate).

    • Fund Companies House / HM Land Registry enforcement to collect ROE fines and litigate non-compliance; link ROE entries to council tax and planning records to detect non-occupancy. (ROE currently under-enforced; only a small share of fines have been collected.) Financial Times+1

  2. Targeted fiscal & regulatory measures (medium term):

    • Retain and calibrate the non-resident SDLT surcharge, tighten anti-avoidance rules on corporate wrappers, and implement a targeted vacancy/empty-home tax in localities with measurable non-occupancy problems.

    • Use place-based restrictions only in clearly defined overheated markets — avoid national blanket bans that risk legal/ investment side-effects.

  3. Supply-side and local planning reforms (long term):

    • Accelerate brownfield and social housing delivery, incentivise build-to-rent and affordable housing obligations tied to new developments, and reform planning gates where evidence shows bottlenecks. Empirical consensus indicates supply expansion is critical to durable affordability improvements. Gravita

5. Implementation considerations & metrics

  • Data needs: property-level ownership data, occupancy measures (council tax / utility linkages), and transparent registers of trusts and offshore entities.

  • Metrics: share of transactions to overseas purchasers (by local authority), vacancy rates, changes in first-time buyer price-to-income ratios in affected localities, ROE compliance rates, revenue from surcharges and vacancy taxes.

  • Legal & diplomatic risks: consider WTO/FTA/treaty clauses and investor-state dispute risks for aggressive prohibitions; use narrowly targeted measures to reduce litigation exposure.

6. Research priorities

  • High-resolution causal analysis of foreign purchases on rents and first-time buyer access at local levels.

  • Evaluation of vacancy/second-home taxes and targeted bans in comparator countries (Canada, Australia) after 1–3 years to quantify displacement effects and impacts on new-build finance.

Conclusion: Foreign buyers matter in specific geographies and segments; policy should begin with credible measurement and enforcement, then proceed with narrowly targeted fiscal/regulatory measures coupled with supply-side reforms. Blanket moralising or one-shot bans without data and enforcement capacity risks policy failure and unintended economic costs. SSRN+2GOV.UK+2


A. Annotated bibliography (selected rigorous sources)

  1. Sa, Filipa G. — The Effect of Foreign Investors on Local Housing Markets: Evidence from the UK (CFM/CEPR; various versions 2016–2025).
    Empirical study using Land Registry transaction data to estimate local price effects of foreign / overseas purchases, exploiting spatial and temporal variation. Finds statistically significant positive effects concentrated in higher-value locations; emphasizes heterogeneity across neighbourhoods and property types. Essential for causal inference about where foreign demand matters. SSRN+1

  2. HM Land Registry — Overseas companies that own property in England and Wales; Register of Overseas Entities (ROE) documentation.
    Official datasets and legal instruments documenting (a) transaction-level recording of overseas-registered companies and (b) the 2022 ROE, which requires overseas entities to identify beneficial owners. Fundamental primary sources for ownership measurement and legal context. GOV.UK+1

  3. Transparency International UK — Analyses on trusts / opaque ownership & policy briefs (2024–2025).
    Investigative analysis estimating the scale of property hidden behind trusts and assessing loopholes in ROE enforcement; argues that opaque trust structures hide significant value and undermine enforcement. Useful for policy design on beneficial-ownership transparency. Transparency International UK+1

  4. EU Tax Observatory / research brief — The End of Londongrad? Ownership transparency and offshore investment in real estate (2025).
    Uses Land Registry and offshore ownership datasets to map offshore company purchases and the role of offshore financial centres in UK real-estate markets. Valuable for understanding offshore vehicles, data linkage strategies, and the limitations of current registers. Eutax

  5. Government policy documents & cases: UK SDLT non-resident surcharge (gov.uk) and international policy experiments (Canada’s Prohibition on Purchase by Non-Canadians Act; recent Australian restrictions).
    These primary legal/policy texts describe existing UK fiscal tools (non-resident SDLT surcharge) and international comparator policies (Canada’s 2023 prohibition; Australia’s 2025 temporary ban). They are necessary for assessing policy feasibility and trade-offs. GOV.UK+2Justice Laws Website+2

  6. Financial Times / investigative press on ROE enforcement (2025).
    Reporting that enforcement and fine collection under ROE has been weak (only a small fraction of fines collected), which empirically demonstrates the enforcement gap between law on the books and law in practice. Important for realistic assessment of transparency measures. Financial Times

LLM

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 Excellent question — and yes, there’s a real conceptual resonance between Žižek’s “fetishistic disavowal” and both pluralistic ignorance ...