The foreign buyer is one of the most important profiles of the Spanish residential real estate sector. His predilection for our country translates into a level of transactions that contributes to the dynamism of the housing market. The nationality that always leads to foreign operations is British. According to the College of Registrars, the British were behind 13.31% of total real estate purchases from foreigners in the second quarter of 2019. This percentage is the lowest in the historical series. In this post, we detail some of the consequences that could occur from producing a hard Brexit.
The United Kingdom's departure from the European Union without a firm agreement with the member states would impose heavy punishment on the Spanish real estate market. Our country has traditionally been a recipient of British buyers attracted by good weather and health as factors they value when thinking about their retirement.
A hard Brexit would end their status as European citizens and cause the demand for houses to decrease and also increase the stock, with the entry into the market of British properties that would find it difficult to travel between the two countries.
A departure from the UK without an agreement would cause a devaluation of the pound against the euro, which would make housing more expensive for these buyers. As the Registrars data already anticipates, the transmissions would be pushed down. The British demand for properties in Spain is formed, above all, by people over 40 who decide to retire and live in a place with good weather and a wide range of gastronomic and leisure activities.
Since the referendum was held, British public visits to real estate fairs looking for a home in Spain have been reduced. That the main foreign buyer of housing located on the coast paralyzes his purchase decision, directly influences the price of these properties. The Costa del Sol, Valencia, Azahar and Blanca, in addition to the two archipelagos would accuse adjustments.
Another of the possible consequences of a "no-deal" would be for the British who are already owners in Spain to sell their homes. The reason for this reaction is based on the loss of European status and, therefore, of certain advantages related to the free movement of persons or, even, of a sanitary nature. In addition, it would be difficult for the market to absorb a peak in the inventory.
The future of financing is also at stake. At the time when the British banks left the European Union, problems would arise regarding the granting of mortgages, given that the English entities would not be authorized to work in European territory. What would not change would be taxation: the taxes applied to the purchase of a house would be the same.
Although the level of uncertainty is really high, most experts agree that after a few months of some market tension, stability would finally be achieved thanks to the signing of agreements. The commercial links between Spain and Great Britain are very strong, and they would try to minimize the consequences of a hard Brexit through dialogue.
7 thoughts on “Consequences of a hard Brexit in the Spanish real estate market”
je pense que tout le monde s'affolle à tort , la grande bretagne ne s'ecroulera pas et l'Espagne n'en souffrira pas , bien au contraire, a mon avis , le pays qui en souffreras le plus est la France , qui joue les grands pays et qui en réalité est fortement endettée , et avec les mesures prises par l'actuel gouvernement, une poperisation totale du peuple , , les entreprises etrangères ou français se délocalisent , en meme temps que les Français vers d'autres horizons , retraités , et aussi jeunes diplomés , migrations vers les pays nords américains , israel également , chine , australie , suisse etc , que personne ne s'affolle,
I agree - as freelance marketing consultant and property writer working with A Place In The Sun, UK buyers / sellers & Spanish conveyancing firms there really needs to be a deal soon. The uncertainty has impacted and we now need to facilitate everyone interested in purchasing in Europe or currently living there to get on with the new reality. Life will go on regardless - remember plenty of non EU investors from Asia, Russia, America etc purchase in Spain quite happily BUT economically neither UK or countries like Spain can afford to mess this up.
Even if this ends in a hard Brexit fiasco, UK investors will still find new ways to get a great return on investment from a place in the sun. As CEO of Asia Pacific Property Hub - Twitter @asiapropertyhub I am now seeing rapid interest from UK investors seeking 7-9% returns from opportunities such as hotel resort properties in Philippines Thailand, Cambodia and Uganda! Yes, for the switched on investor the emerging markets of developing countries are now the new European dream. Indicators are that Europe/West is in a decline - Spain will always be popular with the British, regardless - even if just for weekly holiday rentals - but good sense is to spread your bets and consider the East for investment as well.
Yes, The pound is likely to up because it can be traded with many world currencies including the Euro and Yes we will have less to pay to the EU dictators, so more to spend...
Even people over 40 have usually reached their career goals/income, along with inheritances...
UK residents in Spain currently enjoy the much better benefits Maggie Thatcher got then compared to their Spanish hosts and bring part of that into Spanish Real Estate. But i guess the market beating won't turn out too bad. If the English leave EU the Scottish and N. Irish population will likely escape their London dictators and continue to enjoy EU benefits they can spend in part on the Spanish coastal region's wonderful houses.
Ralph, Dictators , UK?
Considering Scotland get more Tax rebate per head than England I think you’ve got to check facts, anyway, here in England we’re pretty fed up with the bitching harping Sturgeon, let them leave , save us a few more million !
Why dont you let us go then?
j'ai effectivement constaté un ralentissement net des ventes de villas en Costa Blanca,j'ai visité de nombreuses villas d'anglais(et j'aime beaucoup l'architecture et la décoration de leurs villas),en avril et elles sont toujours en vente,j'ai même reçu pour plusieurs d'entre elles des propositions de baisse de prix.
Je sais que les anglais représentaient 70 % des achats des étrangers et ils risquent
de voir leur pouvoir d'achat baisser du fait de la dévaluation de la Livre et de ne plus avoir de couverture sociale en Espagne.
Je prévois donc une baisse de l'immobilier dans les mois à venir.