Brexit developments have affected the property market, with many Britons buying property abroad before the UK leaves the EU. On the one hand, the prospect of Brexit has triggered a desire to move or buy a holiday home abroad, and on the other hand, the uncertainty has caused a delay in deciding to buy a home abroad. For many, the decision to exchange a large sum of pounds into euros to buy property is delayed until the financial landscape becomes clearer and we know where the pound is heading. Inevitably, the fluctuation and weakness in the value of the pound has a direct impact on the value of property overseas and this is a determining factor in many buyers’ choices.
For UK buyers, Europe has become more expensive, whereas for Europeans, the UK now is cheaper. For those, looking to sell their overseas property, Brexit and the weakness in the pound may be in fact advantageous. But how is it for UK buyers looking into buying property overseas?
To Buy or not to Buy
According to many overseas property businesses, there has been strong interest from Britons for Spanish and French properties. Marc Pritchard, of Taylor Wimpey España, said that “Over the last year we have seen reservations of our Spanish properties by British buyers shoot up by 77 percent.” He added: “In the Costa del Sol we’ve witnessed a 100 percent increase in reservations. It certainly seems that Brexit has not dampened British buyers’ appetite for holiday homes, at least not in Spain. If anything, the decision to leave the EU has pushed many into hurrying to purchase a home overseas before the UK actually leaves the EU.”
Trevor Leggett, of Leggett Immobilier, said that interest in French properties has increased as in the months after the Brexit vote “Sales increased and those buying increased their budgets. The figure that has dropped is the number of British homeowners moving back to the UK.”
Uncertainty surrounding the future of the pound
As a recent Bloomberg article pointed out, while many are delaying their decisions to purchase property abroad until they are sure about the value of the pound, many Britons are still, nonetheless, buying property. The article, for example, said that the “number of British residents registered in Portugal rose 18 percent to 26,513 in 2018, and 22 percent of all passengers who arrive at Portuguese airports are British.”
Laurence Seward said to Bloomberg: “Brexit will affect some people, especially those who need to borrow,” to continue the construction of their millions of worth sea-front villas. “But if you’re someone who has available funds and are looking for a second home in the Algarve, you will do the deal regardless of Brexit,” he added.
However, the choice of buying property abroad has been significantly impacted by each buyer’s financial situation, now aggravated by the devaluation of the pound and Brexit instability. The very wealthy buyers might still be buying homes abroad but the less wealthy are putting their plans on hold until the horizon becomes clearer and more certain.
Uncertainty will continue, with Brexit having important and irreversible ramifications for the economic situation of the country, but also for all Britons living or moving abroad. However, if you are considering buying property abroad, a decision that will weigh significantly on your personal finances, paying attention to the news and currency movements will help you make informed decisions that will affect your future and finances.
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