We’re leaving the EU. Britain will no longer be part of the single largest trading bloc on the planet. Our government is about to begin negotiating trade deals with Australia, The USA and other countries around the world. Doesn’t seem like a good time to be investing in property in Europe does it? But think again, we’re here to explain why things might not be as simple as they seem.
By committing once and for all to leave the European Union, Boris Johnson’s Conservative Government has ended a lot of the uncertainty surrounding Brexit.
Between the referendum in June 2016, and just before the December 2019 election, the pound some of its worst drops in value in living memory, due in part to Britain’s uncertain future. And as we all know, the currency markets hate uncertainty.
This was great news for those visiting the UK, but Britons heading abroad found that they could suddenly get far less for their money.
The election put an end to that. The pound hit a 3 ½ year high against the Euro in December 2019 and has remained steady since then.
Dawn Cavanagh-Hobbs, founder of luxury Italian fractional ownership company Appassionata, believes that it will be the ideal time for Britons to buy abroad:
“The long-term impact of Brexit-based uncertainty on the pound has been frustrating to watch. With the majority Conservative government finally moving things forward, we’re anticipating something of a surge in UK interest in European property towards the end of January, when buyers are likely to quite suddenly be able to get far more for their money.”
With the UK officially scheduled to leave on 31st January, Sterling is expected to take another leap upwards against the Euro throughout 2020. Those looking to buy abroad may find themselves pleasantly surprised by what they can afford.
Spain is expected to continue to be a popular destination for holiday home purchases. Marc Pritchard, Sales and Marketing Director at Taylor Wimpey España explains why:
“It’s an exciting time to be taking out a mortgage in Spain as there are some superb borrowing opportunities right now. With a stronger pound to play with as well, British buyers can suddenly get quite a bit more for their money when it comes to second home ownership in Spain.
“Spain remains the second most visited country in the world, as its superb climate, cultural heritage, delicious cuisine and pristine beaches – along with a huge range of other attractions – continue to charm visitors from across the globe. Some of those who visit are so delighted by Spain that they want it to play a more substantial role in their lives – hence the huge demand for holiday homes here.”
It is important to remember, however, that the Brexit boost to the pound also brings with it added obstacles to owning property in Europe. By pulling out of the EU’s freedom of movement agreement, Brits won’t find the process of moving to and living in EU countries as simple as before.
Jonathan Eshkeri at E&G Solicitors says:
“Merely moving to Spain may not be sufficient. One would need to be established in Spain, not necessarily having purchased a property, but at least having rented one, having registered at the local town hall as living at the property, having registered with the Spanish authorities as a resident. This, in turn, necessitates a private health insurance policy and having either contracted employment or established a business of one sort or another, in which case one will be making social security payments.”
Some states are also proposing the introduction of new temporary residency certificates after March 30th, but you will need to check the rules for your desired country.
So, those looking to purchase property in Europe may now find that they can buy roughly the same as what they could buy three and a half years ago, but will have to jump through more hoops to do so. Was Brexit worth it? We’ll find out in the coming months and years.