Britain's deputy prime minister Nick Clegg has hinted that the rumours that the government is slapping foreign property investors with a new capital gains tax is true.

Speaking at conference in London, Clegg said Britain may impose the new tax on foreign property investors, in a bid to stem soaring house prices in the country's capital.

"We certainly need to make sure that people who invest very large amounts of money into property in central London locations...pay their fair share of tax in those transactions," said Clegg, without giving any further details.

"That is why we are looking at options like a differential application of capital gains tax to those kind of transactions."

On 31 October, Osborne was said to be aiming to prevent a housing bubble from forming, by imposing a new tax rate for foreign property investors.

However, ahead of the 4 December Autumn Statement, Osborne said "I am not going to comment on specific tax affairs - it's not a leak that comes from anyone near me."

"The only reason I don't want to deny it is because I don't want to then get into a whole list of other things you are going to ask me about."

People living in Britain pay 18% CGT and 28% if they make a profit when reselling a property that is not classified as their main home.

People who own properties in the UK are deemed non-residents are currently exempt from CGT.

Clegg said an influx of foreign money had left parts of the London property market "divorced from and dislocated from the rest of the economy".