How Brexit is affecting the Spanish property market

How Brexit is affecting the Spanish property market

Spain has always been one of the most popular countries for Brits buying abroad, but with Brexit underway and the exchange rate in a state of flux, overseas property and finance expert Simon Conn has been looking at the current state of the market.

“Spain is still in the top five places to buy abroad, but we are finding that some people are waiting to see what happens with Brexit before committing to buying. However, it looks like they could have a long wait before everything has been thrashed out.

“Although I have seen the number of purchases made by Brits in Spain reduce when compared to last year, they still made up a third of all non-resident purchase enquiries that I receive, which is similar to the previous year’s figure,” Simon said.

Popular areas include Costa Blanca, Costa Brava and Costa del Sol.

The poor exchange rate has caused an issue, with the Pound dropping 14-16% against the Euro since Brexit was announced. This has led to Simon helping an increasing number of applicants aged over 50 who now need to raise finance because the amount of savings they had lined up will not stretch as far, meaning they need to top it up with a small mortgage.

Adam Jordan, a senior dealer at Moneycorp, one of the UK’s fastest growing foreign exchange companies, said: “The current lack of progress with the Brexit negotiations is already having a negative impact on the value of the Pound. Not only is there a genuine fear that Britain could leave the EU with no deal, but it raises questions about the current government’s strategy.

Given the apparent lack of contingency planning for a ‘no deal’ Brexit, we could argue that this may have a negative impact on the value of the Pound making the cost of any future property purchase hard to manage,” Adam added.

There are three ways to send your money overseas. Either by sending large lump sums as required, fixing a rate today for future use, or by making regular payments each month to pay for a mortgage.

Peter Esders, legal director and solicitor at international property law firm Judicare said that Brexit has had an impact on their clients. “We have seen the number of people considering buying drop and we are being told that their plans are on hold either until there is more certainty around Brexit or until the exchange rate recovers. The uncertainty over how Brexit will affect buyers and the market and the poor exchange rate is definitely putting people off."

Some people are still pushing ahead with their plans to purchase. In fact we had a flurry of people wanting to complete on properties and get their title deeds prior to Article 50 being invoked – the rationale being that if any laws or regulations were introduced retrospectively that was likely to be the starting point for any new laws or regulations.

There is also a band of purchasers who are taking the view that little is likely to change and therefore are proceeding with their plans to buy anyway, regardless of Brexit and the uncertainty over how it will pan out."

During his 35 years dealing with the overseas property and finance market, Simon Conn has seen the market go through many changes. “Personally, I do not think people should be put off from buying in Spain in the current market. It could be unsettled for a long time and things can get worse as well as better. It is still a popular destination to go on holiday and people are still renting out villas/apartments and therefore, if you have the finances and it is your dream to buy abroad, it is still worth considering.”

Join our mailing list:

Leave a comment

Latest Comments

Scott Garnet
Scott Garnet 06 Nov 2017

If you have a patio or a porch it is important to make sure that any connecting doors are secured. Good advice for sliding glass doors is replacing the panels with storm resistant glass and getting heavier...

view article
richardrawlings 01 Nov 2017

What has not been mentioned here is the effect of not only higher interest payments, but also that these payments are less likely to be offsettable as a business cost due to the scaling back of mortgage...

view article
Kelvin Lloyd
Kelvin Lloyd 09 Oct 2017

IT is up, to the Planners. If they will only give permission for bungalows on certain (suitable) sites, they will be built.

view article
maggie swift
maggie swift 09 Oct 2017

It's just the beginning of the shocking rise.

view article
maggie swift
maggie swift 09 Oct 2017

I have recently read that the bungalows can provide social housing for elderly residents in London.

view article
zoe glover
zoe glover 05 Oct 2017

Update! Worst company I have ever dealt with. Undervalued a Cambridge property by over 100k, wont take on any evidence of valuation including a RICS valuation done 3 years ago for the very same value...

view article
Paul Edwards
Paul Edwards 27 Sep 2017

Its nonsense articles such as this that make it harder to get clients to realise just how difficult the market is out there. When you see Rightmove and there are more 'price reduced' then 'new' most days...

view article
Tom Allen
Tom Allen 20 Sep 2017

Absolutely agree with you!

view article
RyanGeo 18 Sep 2017

A sharp correction would be a less dramatic expression to use. That is already underway in certain sectors in Reading where I practice as Chartered Surveyor

view article
sean benton
sean benton 01 Sep 2017

Identity theft is a thread for any profession. So,people should stay alarmed. I once take help from a letting agent and came to know that letting agents are taking every precaution to prevent fraudulent...

view article
Mark N.
Mark N. 30 Aug 2017

We have seen a surge in instructions over August and that should continue into September too.

view article
Chris 30 Aug 2017

Unfortunately, all the legislation bears its force on Landlords and ignores, naively, the effect of Rogue Tenants on the ability of landlords to keep houses in repair and offer properties for rent at reasonable...

view article

Related stories

More articles from Overseas