A Labour-run council has sparked fury after saying that local authorities should have the right to take control of properties left vacant for more than six months.
Westminster council has urged the Government to relax rules and allow local authorities to confiscate properties that have been vacant from two years to six months. The council claims that at least 11,000 properties are sitting empty.
This would make it easier to issue Empty Management Dwelling Orders and bring vacant homes under control.
But the plan has sparked criticism as it would be difficult to enforce, an attack on people's homes and is a 'distraction' by the local authority to compensate for their failure to build enough housing over the last 40 years.
Jacqueline Connerky, Westminster City Council's empty property enforcement officer, said: "What we want to try to do is engage with the owner to bring the property back into use."
The central London council claims to have spent £140m over the last two years on temporary accommodation, despite 11,000 properties in the area sitting empty.
Mark Pollack, of residential estate against Aston Chase, said: “Legally it’s difficult to imagine that actually being enforced without huge objections. It would be a further attack on wealth and international investment in our cities.
He said Labour's tax raid on non-doms had already soured Britain’s appeal with wealthy foreign investors.
“At a time when we are already in a challenging market, given the legislation around non-doms and geopolitical volatility, it’s the last thing London’s market needs that has not seen the kind of capital growth we had come to expect in the past.
“There are probably quite a lot of properties that are in foreign ownership that have been locked up and left for many years,” he said, adding that they were unlikely to be appropriate for housing as they are “ordinarily in quite poor condition”.
Dr Kristian Niemietz, editorial director at the Institute of Economic Affairs, said: "The issue is that we haven't been building enough houses for more than 40 years."Westminster Council, like many other councils, is just trying to distract from that."
A spokesman for the MHCLG said they would support councils to tackle empty homes by strengthening their powers to take over the management of vacant residential premises.
They added that the government would publish more details on the matter soon.