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Registrars show less Brits active in Spanish property market

Tuesday 3rd January 2017

Written by Roy Weatherby, The Overseas Investor

The retirement, holiday or investment home in Spain has become a dream come true for a number of people from the UK. Brexit, however, has left current intra-EU migrants in something of a state of limbo. It also raises the question of how feasible it will be for people to move to other European countries in future. The numbers are already telling an interesting story.
Third quarter 2015
It may seem like a long time ago, but at the end of 2015, the Brexit referendum had yet to be formally announced, although the fact that David Cameron had made it an election promise was a strong indication it was going to happen. Even so, the prospect of a win for “Leave” seemed, literally, incredible. A look at the data for Spanish property sales in quarter 3, 2015 shows a total of 92,786 sales, of which 2,900 were to people from the UK, meaning that UK buyers accounted for 3.12% of sales during that period.
Third quarter 2016
In quarter 3, 2016 there were a total of 103,055 sales of which 2,422 were to people from the UK, meaning that UK buyers accounted for 2.35% of sales during that period. To put those figures another way, sales increased by 11.1% but the UK’s participation in the market dropped by 16.5%. What reason(s) could account for such an abrupt change? One obvious answer is that property in Spain is priced in Euros and the aftermath of the Brexit vote saw the Pound sink badly against it. This means that even if prices had stayed level in Euros, they would have become more expensive to those paying in pounds. At the same time, people looking for retirement property, by definition, are more likely to be older people on fixed incomes (pensions) who could be starting to become more cautious about the thought of moving to a Eurozone country and thereby exposing themselves to the risk of currency fluctuations.
Third quarter 2017 and beyond?
Brexit is unlikely to change the allure of Spain’s weather or its food and wine. It could, however, have a very significant impact on the practicalities of moving there in retirement (or at any other time of life). This means that, in the short term at least, people from the UK may be tempted to adopt a more cautious approach, for example renting instead of buying, until the situation is resolved one way or another. In the event of a soft Brexit, where freedom of movement remains (largely) intact, it is reasonable to assume that interest in the Spanish property market would strengthen again. In the event of a hard Brexit, a lot would depend on the attitude of the Spanish government and the extent to which they valued their country’s status as a retirement destination. In the event that Spain adopted a welcoming approach, then again it’s probably safe to assume that UK buyers will be happy to head to its sunny shores. If, however, moving to Spain becomes more challenging then UK buyers may either choose to stay home or look at alternative retirement destinations.
For more information on investing in Spanish property, please contact Hopwood House.

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Editorial Contact Details - Conor Shilling
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