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British buyers not put off buying abroad despite Brexit

Tuesday 25th July 2017

Written by Roy Weatherby, The Overseas Investor

The decision to leave the European Union is a big one, and it has lead to large amounts of uncertainty in many markets. Whilst the UK property market may be feeling the effects of this, it seems Brexit is not stopping people buying property abroad.
The Brexit effect
It seems that since the Brexit referendum, around 28% of British buyers have decided not to buy property in the European Union. However, there are still very many people who see the value in doing exactly that, with many choosing France as their top destination.
Of those with projects already underway, at least two thirds intend to continue with their endeavours, whilst 23% are looking to speed up their purchases as a result of Brexit. The British are the top investors in France, with Spain and Italy also proving popular. 
Many people are still planning a property purchase, and 65% say they have not been put off by Brexit. Whilst 27% have looked into postponing their transaction, they do still intend to buy.
Top EU countries
It is thought that France has proved to be such a popular choice due to its close proximity to Britain. The attractive property prices and more favourable climate could also be determining factors as to why 32% of non-resident transactions in the country last year were made by Britons. The Belgians were the second most popular investors but fell a long way behind their British compatriots. In 15 of the 21 French regions, the British ranked in the top three of foreign investors.
The French also attract the biggest property budgets from UK buyers, with 44% aiming to spend in excess of €300,000, with 66% of buyers seeking a form of credit in order to buy, and many looking to use French banks for this. Releasing equity from an existing property is an option for 23% and 18% require bank finance with the help of a broker.
It is thought to be the warmer climate and lifestyle that continues to attract British investors to countries such as France, Spain and Italy, and 66% of buyers appear to be looking for their own second homes.
Over half of those currently working on a European property project feel optimistic about the Brexit negotiations; however, many are still hesitant when it comes to the legal uncertainties surrounding the UK’s departure from Europe.
A change in interest rates will also alter the property landscape, with 77% expecting UK interest rates to rise, compared with 65% in the Eurozone. Whilst some of the Bank Of England’s rate-setting committee back a rate rise, this may be postponed due to the recent drop in inflation.
Brexit property transactions
After the Brexit referendum, there was a downturn in requests to buy, as well as some cancellations and postponements, however, the residential property market is one that is used to change and has survived many political and economic transformations.
This has meant that British interest in France and other areas of the EU remains high, most notably due to favourable prices and borrowing conditions, which means these countries are still ripe for property investment. The early part of 2017 has seen healthy levels of investment requests with some buyers accelerating projects.
For more information on investing in European property, please contact Hopwood House.

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Editorial Contact Details - Conor Shilling
0845 672 6000
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