Buying property abroad has become the standard for Brits in recent years. Cheap opportunities, low travel costs and affordable living meant that many could easily relocate abroad or purchase their holiday home in the sun. With increasing political uncertainty and the pound fluctuating every time there is a crucial update on Brexit, many Brits have turned to their foreign exchange specialist to help them navigate the current landscape and get the best exchange rates for their money.
No deal? Living abroad post-Brexit
British citizens have suddenly found themselves in a difficult situation where they need to consider what rules will apply after Brexit. The Prime Minister Theresa May has managed after seven hours of talks at the Brexit summit on Wednesday (10 April), to get an extension until 31 October. Of course, there is the option to leave with a Brexit deal in place earlier. It could not be more appropriate, that the extension coincides with Halloween, so that the horrors of Brexit can be fully laid to rest. Or not, as a further extension still remains a possibility. According to the Guardian’s sources, “There have to be very good reasons to extend for another time. Therefore, there is this expectation that something should happen before. And again, in the [leaders’] discussions some are more keen to bring this process to an end than others.”
Tory Brexiters have reacted angrily to the Halloween extension, while the veteran Conservative MP Bill Cash asked May if she would resign. May blamed the Brexiters for the delay as they failed to vote for her Brexit deal.
But it is still possible that Britain will crash out of the European Union without a withdrawal deal. British nationals in Europe would need to get their papers in order or get a visa to buy a home, as the rest of the non-EU nationals.
While each E.U. country has its own views on how to treat British residents in the case of a no-deal Brexit, nine EU countries are legislating to allow British nationals permanent residency rights after Brexit, with Spain and France legislating only for temporary residency. According to a leaked European commission paper, the “most generous countries – Denmark, Norway, Cyprus, Austria, Slovakia, Italy, Bulgaria, Malta, Croatia and Romania – will offer permanent national ‘regularisation’ under which British citizens will automatically be considered to be legally staying.”
Pound’s decreased value impacting on British expats
A major and constant concern for British expats and those thinking of buying property abroad is the decreased value of the British pound. Since June 2016, the pound has dropped against the euro. This has had a negative effect on British expats, especially those who are depending on their pensions.
So, Brits living abroad or considering buying an overseas property, will have to transfer money from a British bank account abroad to pay for a deposit, legal and valuation fees, or mortgage repayments. Not only are such transfers costly currently, but they might become more expensive following Britain’s exit from the EU. Exchange rate changes could also impact on the cost of repaying a mortgage on an overseas property you own.
Continued uncertainty will definitely have implications for the economy, with the pound moving unpredictably. A hard Brexit has not been ruled out, so on such an event the pound could fall significantly, as analysts have noted. So, if you are thinking of buying your dream home abroad or you want to lock a more favourable exchange rate to use in the future, talk to a foreign exchange specialist at Universal Partners FX.