Before, purchasing a property in Spain was a straightforward seamless process for UK citizens. However, since the Brexit referendum, things have changed. It’s therefore essential that buyers assess the impact of this referendum before buying as the process can be more complicated.
Brexit and International Property
The Association of International Property Association (AIPP) predicts a huge impact on the international property sector following Brexit. It is why they want certainty that British owner’s rights of a foreign property will be considered and included during Brexit negotiations. Without this, purchasing a house in Spain will be a painful investment. That said let’s look at how Brexit will affect buying of properties for UK nationals.
Will Brexit Hinder One from Buying a Second House in Spain?
Although in the short term, changes in currency due to Brexit have made it hard for buyers to afford to buy a house in popular locations. As a result, purchasing second-holiday homes seems difficult compared to buying retirement homes. Studies found that currency volatility impact sales negatively.
Before the global financial crisis in 2008, the exchange rate of pound-euro was profitable. A UK pound at times could be as high as 1.56 euros. However, as of May 1st, 2020, it trades at 1.15 euros. There have been significant fluctuations for exchange rates of GBP-EUR after Brexit, but now, the Covid-19 pandemic is worsening things.
Many individuals thinking of buying a property in Spain might be put off with the low currency exchange rates. But, non-EU nationals like Americans and Scandinavians can continue buying property as they have always done without any problems even during low exchange rates.
Brexit Influence on the Overall International Real Estate Cost
Since there are some limitations of movement, it can cause some restrictions or visa requirements. But, because British citizens with property on Spain contribute to this country’s economy, they will not be denied entry visas to visit their houses.
Will More UK Citizens Emigrate Due to Brexit?
Well, recent research says that there has been an increase in online searches on the number of UK nationals who want to migrate to countries like Canada, Australia, and New Zealand following Brexit. While often the reasons for migrating are personal, the fact that Britain is out of the EU will encourage some people to move to different countries. However, this will be mostly an incentive for those who had been thinking about moving anyway.
Brexit Impact on Passports, Visas, Currency, and Migration
Brexit will likely cause many and significant political changes considering that the UK opted for a system of immigration points like that in Australia. There will be limited movements between UK and EU from January 2021. Additionally, while it is still not clear on how Britain’s immigration point system will work, it’ll likely result in an exit from the single market.
Note that, the UK and EU had a scheme that gave British nationals the freedom to live, start businesses or study in any European country they have migrated to. However, Brexit does not include freedom of movement which means things could also change for British citizens in terms of social security benefits, accessing health care, and working rights. As a result, it also reduces the number of Brits who want to work or buy a property abroad.
How Will Brexit Impact International Property Owners
Well, it’s not exactly clear how this referendum will affect those who own international properties. However, it would be impractical to limit cash flow from British expats. Think about it. Over 1.2 million British expats are living in France, Spain, and Ireland. And more than 1 million UK residents own a property in the EU and visit regularly for holidays. Therefore, it wouldn’t be wise to limit these over 2.2 million people from spending their cash in EU countries.
Brexit Influence on Exchange Rates
We’ve already said that the low exchange rates have already negatively affected some perceptions about buying a property abroad or migrating to these countries. But, according to a recent survey, there has been an increased demand for currency exchange services since Brexit. This demand is mostly from British businesses who want to balance market shifts and protect their investments by controlling their currency risk.
Well, as we have earlier said Brexit will have a huge impact on buying or living abroad for UK nationals. It is therefore wise that you weigh out the effects before making any decision. Also, experts urge buyers to work with a real estate agent, an attorney, and financial experts when buying a Spanish property.