Spain is to scrap its so-called “golden visa” program, which granted residency to foreigners who made substantial real estate investments in the country.

In a blow to British expats, Spanish Prime Minister Pedro Sanchez told reporters on Monday that ending the scheme would help make access to affordable housing “a right, not a speculation”.

Currently, the scheme allows non-EU citizens to invest at least £428,000 (€500,000) in Spanish property and live and work in the country for three years.

“Today, 94 of every 100 such visas are related to real estate investment… In large cities facing highly stressed markets, it is almost impossible to find decent housing for those who already live, work and pay taxes there,” Sanchez said Mr.

He added that the government would initiate the process of scrapping the scheme at its weekly cabinet meeting on Tuesday after studying a report submitted by the housing ministry.

Government data shows that from the launch of the golden visa program in 2013 to November 2022, Spain issued nearly 5,000 licenses.

According to a 2023 Transparency International report, Chinese investors topped the list, followed by Russian investors with investments of more than 3.4 billion euros. The report questioned whether authorities investigated the source of the funds.

Spain has been a popular destination for Britons moving to Europe for many years, with around 284,000 people living there as of 2023.

So-called “golden visas” allow Britons to bypass EU residence restrictions. If you do not have a current permit, you can visit Spain without a visa for 90 days before applying for residency or a visa.

Mary Dunn, of Hamptons International Estates, told MailOnline: “It was like a bomb went off this morning. It’s going to be a big problem for expats who want to move, a lot of them People are very unhappy about this. What is being done is not that different from other European countries, but it is not a positive message.”

Idealista spokesman Francisco Inareta said Spain’s housing problem was not caused by the golden visa program but by a lack of supply and a surge in demand.

“The measures announced today, which focus on international buyers rather than encouraging new homes to come onto the market, are yet another misdiagnosis,” Iñaretta said.

Neighboring Portugal recently revised its own “golden visa” program and excluded real estate investment in response to the housing crisis. Foreigners who want to obtain residency can still put money into investment funds.

The European Commission has long called for an end to such schemes, citing security risks.