FOREIGNERS who buy property in the UK are set to pay a higher rate of stamp duty - the tax payable on purchase - it has been announced.

Prime Minister Theresa May told the Conservative Party Conference that it is part of the overall strategy to tackle the housing crisis amid concerns that foreign buyers have been using property as a way of stashing money and pushing up prices, particularly in London.

There will be a consultation period, but it is likely that anyone buying a property who does not pay tax in the UK will find themselves paying a higher rate of stamp duty.

Research from York University estimated that 13 per cent of new London homes were bought by non-residents between 2014 and 2016, and a study by King’s College London estimated that a one per cent rise in homes being sold to overseas companies put up house prices by 2.1 per cent.

But the plan has not been universally welcomed by the industry.

It is a knee-jerk reaction, according to Caroline Takla, director of prime London buying agency The Collection.

‘The idea that this levy will help tackle homelessness is a noble one, but I think this is a cynical distraction. One could argue that homelessness has not been caused as a direct consequence of non-resident ownership in London, but rather from the imposition of many years of austerity,’ she said.

She added that it will lead to a reduction in stamp duty tax going into the Treasury if it deters foreign buyers in significant numbers.