A surprise proposal was put forward in parliament last week that could shut foreign high net worth investors out of the UK's lucrative property markets.
An amendment to the 2015 Immigration Bill was tabled by Baroness Hamwee and Lord Paddick (both Liberal Democrats), proposing the abolition of the Tier 1 Investor visa from 1 January 2017 - the visa granted if you invest more than £2 million in the UK.
Although it is unclear as to what has prompted the proposal, there is speculation it is due to concerns about transparency surrounding big ticket real estate transactions and doubts about the economic benefit to the UK from offering visas in exchange for large investments in property.
2015 saw a tiny number of foreign investors applying to come to the UK under the Golden Visa scheme, with numbers down from around 1800 in 2014, to fewer than 200 last year. The popularity of the Tier 1 Investor route dropped significantly following the increase in minimum investment from £1 million to £2 million in November 2014.
In addition, geopolitical and economic factors affecting the two main source countries for Golden Visa investment – China and Russia – has negatively impacted transaction volume in the UK's prime property markets.
The Tier 1 investor route requires an extended period of residence with significant presence before a non-EU buyer can obtain permanent residence in the UK, becoming eligible for British Citizenship a year later, subject to security and character checks. Those who come to the UK this way bring funds, typically provide employment and are therefore useful citizens for society as a whole.
The proposals come at the time in the UK when foreign investment is being increasingly viewed as being the catalyst behind rapid price growth that has resulted in significant affordability issues for the domestic market.
However, there are differences of opinion as to whether restricting investment at the top end is likely to slow price growth in the short term. The proposed changes to Golden Visa legislation will be a continuing theme of debate over the next few months.