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.”