Spanish property expert says Brexit will affect demand from British buyers
A weak pound, plus the uncertainty about what comes next following the UK's decision to leave the European Union, will undermine British demand for property in Spain, especially in the short term, it is suggested.
This should be a concern as British demand has been growing strongly since 2013 and according to Mark Stucklin of Spanish Property Insight there could now be a reversal in that trend.
He believes that this will have a negative impact on the markets where British demand is dominant, namely Alicante and Malaga, and to a lesser extent the Balearics, the Canaries, and Murcia. ‘Thanks to this Brexit vote, there will just be fewer British buyers about,’ he said.
One reason is that British demand in Spain is driven by the strength of the pound. When the pound goes up against the euro, British acquisitions inscribed in the property registry rise with a delay of around two quarters. ‘Now we have a weak pound plus the dramatic situation of a Brexit, so falling sales in coming quarters are almost a given,’ Stucklin explained.
He pointed out that it won’t be good for British vendors either. ‘They now have a smaller pool in which to find a buyer. Price expectations may have to adjust even further down,’ he added.
He also expects fewer British people to move to Spain until the deal for exit is struck and that will take a minimum of two years. ‘British expats in Spain will now be in limbo until the new order is established. That could take years, and in that period I expect to see more British expats leaving than arriving,’ he pointed out.
British owners of holiday homes in Spain with no plans to sell won’t be affected much for now. A much bigger worry for them is what will happen to the UK, or whatever is left of it when the dust settles.
Figures from the registrar of Notaires confirm that British demand for property in Spain grew strongly last year on the back of a strong pound and attractive Spanish property prices. Buyers from the UK were the biggest group by a wide margin, making up 21% of the foreign market and increased the most by up by 42% last year.
Indeed, in some regions like Alicante on the Costa Blanca and Malaga on the Costa del Sol, the British dominate the overseas buyer market.
On the other hand for those who want to buy in Spain properties will be cheaper due to the Pound falling making currency exchange more favourable for changing into euros. However, those wishing to move permanently to Spain who are reliant on a British pension will get fewer euros for their money.