Boris Johnson defends foreign property investors

Boris Johnson said it would be 'utterly nuts' to deter foreign investment

London Mayor Boris Johnson has said it would be wrong to "slam the door" on wealthy foreigners buying property in the capital.

Chancellor George Osborne is to impose a so-called "oligarch tax" on sales of homes by non-UK residents in a bid to cool the housing market.

A sharp rise in overseas buyers has been blamed in part for soaring prices.

But London Assembly Green Party member Darren Johnson said: "The mayor is completely wrong."

"The last thing we need is even more demand in this booming market," he added.

"The mayor should be pushing for taxes on land and property to dampen down demand and stabilise prices, while regulating the private rented sector and building more social housing."

In a speech to the annual Mansion House London Government Dinner, Boris Johnson said he recognised there was a "desperate shortage of homes" in the capital - with up to 47,000 now needing to be built every year just to meet demand.

'Utterly nuts'

New builds should be "marketed first to Londoners", he said, and foreign owners should either live in or rent out their properties, not just regard them as "blocks of bullion in the sky".

"But what I don't want to do is to follow the logic that I read from time to time and that is to slam the door again on the right of overseas residents to buy homes in London, notwithstanding the effect they may have in some parts of prime London on the market," he said.

"I don't think that is the right approach."

Mr Osborne confirmed in his Autumn Statement that non-UK residents would have to pay capital gains tax on property sales from April 2015.

Boris Johnson said it would be "utterly nuts" to pursue any policy which deterred vital foreign investment.

He did not refer directly to the tax policy, but said: "I do not in any way want to deter international investment in our city. Quite the reverse: I want to encourage it.

"You can see astonishing transformations taking place in London thanks to international investment.

"We would be utterly nuts as a society if we did anything to turn that away."

London Assembly Labour housing spokesman Tom Copley said: "Rather than standing up for the rights of oligarchs, many of whom leave their homes empty or rent them back to Londoners who may themselves have bought these homes, he should focus on getting more homes built and improving standards in the private rented sector."