Brexit: Buying Property Abroad as Pound Tumbles

Buying property abroad has become more complex the last few years as Brexit uncertainty and the pound’s volatility continue to negatively impact the UK economy, with fears of a recession increasing.

Brexit update

On Tuesday (3/9), the pound experienced increased volatility, reaching its lowest level  in 34 years, from which it rebounded, as rebel Tory and opposition MPs attempted to block a no-deal Brexit. The prime minister Boris Jonson was eventually defeated. According to the so-called Benn bill, if he is unable to reach an agreement with Brussels in the next few weeks, he will have to delay Britain’s departure from the European Union until 31 January.

Sterling dropped due to fears of a snap general election, reaching its lowest level in more than three decades, with the exception of the October 2016 “flash crash." Ahead of the vote, and after Tory MP Philip Lee’s defection to the Liberal Democrats, it rose slightly.

“For all the uncertainty that lies ahead, markets see a Boris Johnson led no-deal Brexit as the worst-case scenario and thus treat anything that undermines that as pound positive,” said analyst at IG Joshua Mahony.

According to the Independent, a Bloomberg survey last month, showed that a delay was seen as the most positive outcome for the pound. Sterling has tumbled significantly since the EU referendum in June 2016.

Boris Johnson’s defeat by a margin of 328 to 301 on Tuesday, has put the prime minister in a precarious position, and has wounded his rhetoric of no-deal. As a result of his defeat, the prime minister said he would table a bill to trigger a general election, but Labour said it would not back his election motion, which requires a two-thirds majority to pass through the Commons.

On Thursday, the House of Lords voted in favour of getting the Benn bill, that will rule out a no-deal Brexit, through all the stages of parliament by Friday afternoon.

Buying your dream abroad

For many, the decision to buy a home abroad is not significantly affected by Brexit. They have prepared and have done their research and are confident that their decision is final. For them, consulting a leading expert in transferring money abroad has also given them peace of mind. Foreign exchange specialists such as Universal Partners FX have years of experience in international money transfers and can navigate volatile currency markets, saving you money and time. So, considering the current volatility and the weakness of the pound, getting help from UPFX will help you significantly when you make large international transfers to buy property abroad or pay related costs.

Residency rights

Due to the fact that many Brits are already living in countries such as France and Spain, and with more EU countries guaranteeing British expats post-Brexit grace periods, British expats are slightly less worried about Brexit, especially the ones already living there. As many European countries have pledged to offer legal residency rights to British expats in return for the same rights for European nationals residing in the UK, it is hard to see that certain freedoms will completely eclipsed after Brexit. For example, the Italian government has announced that British expats will remain legal residents in the event of no deal, while the Spanish authorities are saying British expats will have the same rights in Spain post-Brexit as long as Spaniards already living in the UK are offered the same residency rights.

France has also made sure to clarify its position on residency by passing a bill in the case of a no-deal Brexit, followed by a government decree. Like other European countries, France will apply these rights as long as the UK does the same for French nationals living in the UK. After Brexit, for example, Britons in France will have six months to apply for a residence card. During the one-year transitional period Brits will continue to have existing rights over residence, work and benefits, while they can enjoy access to healthcare for two years after Brexit. Remain in France and the UK government website provide more details.

So, if you are buying a home in a European country, you need to consider all the complexities of life abroad after Brexit. More importantly, as the pound continues to fluctuate, getting expert help from a foreign exchange specialist such as UPFX, will prove to be extremely beneficial especially when you are transferring your hard-earned money. Get in touch with them today for a quick quote and find out how much you can save on your international currency transfers.

Buying property abroad can be hard but is especially harder when considering the current political impasse. After the prime minister, Boris Johnson, received the Queen’s approval to suspend parliament for five weeks from early September, in a move that has been criticised as “profoundly undemocratic” and “sinister,” Brexit continues to be one of the thorniest issues in the UK.

Brexit and expats

This is why, when thinking of moving abroad, British retirees might need to firstly research and understand the complexities of post-Brexit life outside the UK.

What would a long-term residency mean, or what would be the changes to pensions for Brits abroad. For example, it is unclear whether transfers to a Qualifying Recognised Overseas Pension Scheme will be tax-exempt post-Brexit. Additionally, for anyone considering buying property abroad, the biggest issue is currency volatility and its impact on international money transfers. Once you decide to buy your property and want to transfer funds to pay for your property, you don’t want to find that your hard-earned money was significantly affected by the movement of the pound due to Brexit developments.

What to consider when deciding to purchase a property

Researching and understanding local laws regarding buying a property should be one of your first steps. The process of buying a property abroad will be different from place to place, with specific laws and regulations for foreign residents buying property. If you would like to invest in a property abroad to let it afterwards, you should most likely follow the same steps, and research the laws about renting. You don't want to spend a large sum of money on a property that will be chained to a set of rules and limitations, something that will eventually hurt your funds. While you might be looking at European countries such as Spain and France, you might as well do your research regarding other countries where housing prices, the pound's exchange rates, and the local laws are most favourable to you.

Buy to let

Investing in a property abroad that you can also let is a way to increase your income, so deciding the right location and price, and understanding its potential and rental yield are important factors. If you are unsure, discussing this with mortgage brokers, financial planners and accountants might help you decide on whether this is a good investment.

When you deal with tenants, it will be good to have a mediator such as a property manager, who will help you find the right tenant and organise maintenance issues. As long as you are prepared to maintain a property abroad and make it attractive to tenants, then you would also be prepared to pay the costs regarding maintenance and renovation.

Buying a property

Once you have decided on a property, you need to make sure that all papers are in place and all processes are transparent. Get receipts and documents to prove your transactions or agreements and never leave anything to chance. You must always get the title deeds to the property or land, so you know that you own what you have paid for. Also, you need to be aware of any outstanding utility bills or local tax from the previous owner of the property.

If you require financial help to purchase your property, you can get a mortgage, but first do your research and find the right mortgage lender for you. You will need specific mortgage from a bank that supports your chosen country. As it is a competitive market, there are lots of options for you, so get the right solution to meet your own borrowing needs.

Transferring money

When you’re buying property, you’ll need to transfer money overseas. Universal Partners FX is a leading foreign exchange specialist that can assist you with your international currency transfers and save you significant amounts of money on large transfers. UPFX will provide an affordable way to transfer money overseas and protect your funds from foreign exchange risk. Get in touch today to find out how much they can save you on your international money transfers.

Buying a property abroad can be difficult especially with the likelihood of a no-deal Brexit. But considering the advantages and disadvantages, and doing your own research wisely, you will be able to buy a property without throwing your life savings away. It will be good to discuss your property purchase with a currency specialist who will help you understand the market and offer assistance when making large or regular international transfers. This will be significant particularly due to the current political chaos in the UK. On Wednesday, Merkel gave the prime minister an ultimatum to find a solution with regards to the Irish backstop, as the pound slipped to low levels, close to the ones seen back in January 2007.

Brexit

In his meeting with Merkel, Johnson accepted the German Chancellor’s "blistering timetable" admitting that it was the UK’s burden to find a solution to the political deadlock. In his familiar humorous style, Johnson repeated Merkel's campaign slogan "Wir schaffen das," or "we can do it," causing laughter among the Chancellor and reporters.

In a Bloomberg article, it was reported that after Boris Johnson’s letter to EU officials, the French government now expects the U.K. to leave the EU without a deal, something that would immediately install border controls at the end of October.

The article notes that with Johnson becoming prime minister, EU officials believe that a no-deal Brexit would be the most likely outcome, as the UK “doesn’t have a realistic plan for an alternative to the backstop. The measure is despised by ardent Brexiteers in Johnson’s Conservative Party because it keeps the U.K. tied to many of the EU’s customs and trading rules, and Parliament has rejected the Brexit deal three times.”

Buying your dream or retirement home

Despite the political deadlock in the UK, if you have made your research and you are certain about moving abroad and purchasing your dream home, then there’s a few things you need to have in mind.

First, you should research the area of your desired property and find out the benefits of living in that neighbourhood. Are there any amenities nearby, is there access to the beach or the motorway, and generally, what is the atmosphere and feeling of the area and community? You will have to live there and, perhaps, in the future, sell the property with significant returns. So, trying to get the best deal for the best location will definitely enhance your investment in the future.

Make sure that you are not buying something you have never seen in person before. In the case that a developing company will take care of the construction of the building, but you have only saw the plans, do your research beforehand and find out whether the developers are reliable. Having a contract that guarantees that by the end of the project you will get what you were promised is the most secure way to safeguard your interests. Not only foreigners, but locals have fallen in the trap of buying a property but not the land is on, resulting in court cases and lots of stress.

Talk to the experts

From currency exchange brokers, to mortgage brokers and lawyers you will need specialist help when deciding to relocate and purchase a property abroad. In this sense, you will need to factor in costs for legal advice, taxes, notary fees, utilities, such as electricity, water, and gas connections.

Buying a property in France or Italy, 10%-12% of the property’s purchase price would go to cover government taxes and legal fees, while in Spain can go up to 12%-16%.

If you are buying property abroad, it is very important to go to a specialist such as Universal Partners FX. With the current volatility and weak pound, it is best that you contact a currency specialist as soon as you start the buying process, so that you get the best exchange rates possible and pay the minimum amount of fees. UPFX conduct in-depth market analysis, use state of the art technology and can offer access to the best exchange rates available. Get in touch with them today to find out how much you can save on your currency transfers.

Buying property abroad in Brexit times can be stressful, especially when Boris Johnson, the new PM, has announced that the government will be setting aside an extra £2.1bn for preparations in the case of a no-deal Brexit.

Nonetheless, many Brits continue to move to France, despite being considered a costly decision and one of the most expensive countries in the region. But, with its lifestyle, amazing food and cheap wine, and the fact that housing can be quite affordable in certain regions, make France one of the most attractive places to call a second home.

Brexit update

The extra no-deal Brexit funds will be used for stockpiling medicines, adding 500 more border officials and paying for a public awareness campaign about disruption. Johnson’s government aims to convince the European Union that the UK can handle a no-deal Brexit, and it will be able to do so, in three months, on 31 October. Johnson has clarified that he prefers to reach a deal with the EU.

Sajid Javid, the new chancellor, will provide a cash boost of £1.1bn with an extra £1bn available if needed, which means that this year’s spending will increase to £6.3bn.

Labour has criticised the spending which is an “appalling waste of tax-payers’ cash, all for the sake of Boris Johnson’s drive towards a totally avoidable no deal.” John McDonnell, the shadow chancellor, said: “This government could have ruled out no deal, and spent these billions on our schools, hospitals, and people. Labour is a party for the whole of the UK, so we’ll do all we can to block a no-deal, crash-out Brexit, and we’ll deliver a transformative economic policy that delivers for the many, not the few.”

Meg Hillier, chair of the Commons public accounts committee said: “Just because Boris Johnson is making it sound like he’s fighting a war, with seven-days-a-week meetings in Whitehall, that is not licence to spend taxpayers’ money like water, throwing good money after bad. It is of course responsible for a government to be prepared for an emergency. But this is an emergency of the government’s own making – boring though it may be that taxpayers’ money could be spent on essential public services. There isn’t much headroom. There is a bit more than there was but not much. And I don’t think his spending pledges add up.”

The business group the CBI warned that neither the UK nor the EU are prepared for a no-deal Brexit on 31 October, as certain “aspects cannot be mitigated.” The Institute for Goverment on Monday said that there was “no such thing as a managed no deal” and that a “clean break” from the EU is just impossible.

In the meantime, conservative MPs are considering how they can stop a no-deal Brexit if Johnson decides to leave without a deal. Many of us are also considering escaping to France, as Brexit chaos appears unresolved and the situation in the UK is becoming more complicated day by day.

France

While data comparison from Eurostat shows that France “is one of the more expensive places in the EU, with most categories being above the EU average,” British expats still consider the place as an ideal destination for certain reasons. While Paris together with Singapore and Hong Kong are “the world’s most expensive cities,” according to The Economist, there are other places and equally attractive options in other parts of France.

Truth be told, cars can also be expensive, while bringing one with you from the UK and registering it after six months can be a complicated and expensive process. According to The Local, white goods, electronics, DIY equipment and building materials for house renovations, were listed among Brits’ most expensive items.

However, the cheap price of wine in France and its unparalleled quality is incredibly alluring. Especially, if you decide to live in the countryside, restaurants offer cheap meals but high quality. According to a British expat quoted in The Local: “All the villages within a 40km radius of me have small restaurants where I can get a superb lunch for €13-14 with ‘buffet à volonte', main course, cheese, dessert, coffee and red wine included. And the quality is way above any café I would find in the UK.” Drinking and eating local, as well as going to the cinema are some of the amazing and cheap things you can do in France.

Most importantly, the affordable properties you can find is an important incentive. According to The Local, “almost all readers named house prices as one of the country's big benefits.” Nigel Day in Charente said: “The price of houses, whether renting or buying (except in big cities and the Mediterranean strip) is still a bargain, although nothing like it was 15 years ago.” With cheaper "annual housing taxes,” Brits still consider France an ideal home.

If you are interested in buying a property in France, get in touch with Universal Partners FX to discuss the most affordable ways to transfer your funds and protect them from currency volatility due to Brexit. UPFX are foreign exchange experts with years of experience in the financial markets and can offer assistance to move your funds safely and fast. Give them a call today and find out how much you can save or your international money transfers.

Spain is a great choice for buying property abroad according to business and finance magazine ABC Money.

While Brexit continues to worry Brits buying property in Spain, the article argues that by 2020 political uncertainty might dissipate and Brexit be resolved. As it notes, “If this does happen markets may begin to stabilise, and there will be far less volatility, for example in currencies. Understanding the costs can make it easier for investors to feel confident.”

However, with Boris Johnson as the new Prime Minister and a new cabinet committed to “leaving the EU on or before 31 October, ‘no ifs, no buts,’” it is hard to consider what kind of Brexit resolution there will be.

Nonetheless, it is hard to change your decision to buy abroad once you have made up your mind. Of course, Brexit might be something that will remain a constant source of anxiety, but this does not mean that it can cancel out your decision to buy.

Spain as an ideal choice

If you like feeling part of community, then the large British expat community living in Spain might be enough reason to convince you. More importantly, life in Spain is relatively cheap, property value is on the rise and the quality of life is higher than that of the UK.  Many expats choose sunny places such as the Costa del Sol and Marbella, while others prefer the bustling life of cities such as Barcelona, Madrid and Seville.

Property prices

The Spanish property market is currently enjoying a healthy rise, and this is not just temporary. According to a report from Marbella’s real estate agency Panorama, residential property prices rose an average of 6.7 percent across Spain. Hundreds of new modern houses are being built in the greater Marbella area (including Estepona-East and Benahavís), while 20 year old buildings are being refurbished to the highest standards, with many high quality properties for sale.

The report points out that according to the Ministry of Public Works and figures of the National Institute of Statistics, “2018 ended with the best results of the last ten years, with 557,919 residential properties sold (not including public housing sales) of which 50,875 were newly built properties and 507,044 sales of resale properties. These figures represent an increase of 9.4% over the previous year with a sharp upturn in sales noted in January 2019.”

Prices are now returning to those seen before the financial crisis, something that means that they will continue to grow. In this respect, ABC Money argues that “investing in 2020 should see you with a property that will continue to grow.”

Buy to let homes

In the recent years, many are deciding to rent their holiday homes and increase their income, getting a healthy return on their investment. Even if you use the property as a holiday home, you can still rent it during those months you are back in the UK. Since Spain, like many other Mediterranean countries, is a popular holiday destination, with a holiday market that is growing, such a decision makes perfect sense.

A great time to invest in property

With interest rates being very low, now is perhaps the ideal time to get a loan and invest in the Spanish property market. With savings being low and investment opportunities in other countries poor, investing in a property might be the safest way for return on investment. According to ABC Money, “with the Central Bank of Spain forecasting a 10.5 per cent return on residential properties now is the perfect time.”

Universal Partners FX is a great choice when you consider buying a property abroad and transferring your money. With years of experience in the currency market, UPFX are experts in transferring large amounts of money fast and securely. Get in touch with them today to find out how much you can save on your international money transfers when you buy a property.

With Brexit being shrouded in uncertainty, many Brits are dreaming of moving abroad and buying property in the vibrant and romantic southern part of France. 

Southern France and, particularly, Provence, as a Telegraph article tells us, is also the place where Vincent van Gogh produced more than 150 paintings, a place where “the lure of the Bouches-du-Rhône department of Provence endures” to this day. Beautiful and magical, “an hour north-west of Marseille and 25 minutes south from the Eurostar or TGV at Avignon, there is a sophisticated array of eateries that service a well-established second-home market, where a pale-olive or dove-grey shuttered Provençal stone mas (farmhouse) is the dream.” It is not difficult to imagine the lures that have driven many of us to such a location. 

Natural beauty dispels Brexit fears 

Brexit anxieties, the spectre of Britain’s European identity weighing heavy on the political landscape, seem to dissipate as one imagines the French medieval villages nested amidst olive trees and pines. As an agent with Knight Frank attests: It’s a “picture-perfect cluster of medieval villages, with traditional weekly markets under plane trees, all with the backdrop of the foothills of the Alpilles, this is classic Provençal life.”  

There is culture and art everywhere, with half of the buyers being wealthy Parisians and Monaco royalty, and the other half British, Swiss, Belgians and Germans. As many of us dream, a big 3-5 bedroom house with a pool and garden seems to be as close to perfection as it gets, but not without a price: “For €1 million (£900,000) you can achieve, this but not with a view; this can push up the price to €2.5-3 million.” For example, with €7.9 million, you can get pure luxury in Saint-Rémy: a “seven-bedroom property … within 10 acres of grounds with 500-odd olive trees, an outdoor cinema, a swimming pool and eye-catching sculptures.”  

Even with prices this high, buyers are still very much interested. Millions of worth of property is still as alluring as ever, since the market is active “and things go for close to asking price.” As the Telegraph article points out, “people choose to buy in Les Baux for the views and in Saint-Rémy for the address.”  

Little Britain? 

Interest in Southern France has remained strong and continues to grow, as many Brits desire their own warm corner in this part of the world. As a result, house prices have increased but, more recently and due to Brexit, prices have dropped and somewhat stabilised. Provence has become the home for many of us Brits, where we have brought our traditions, from cricket teams to fish and chips and pubs.  

But is this what we really dream of? Brexit has brought to the surface many issues regarding our identity, and replicating our British lives abroad appears to be problematic. On the one hand, “we Brits have rescued from oblivion and restored with care buildings that would otherwise be heaps of ruins. We have brought money and tourism to French regions and, in some cases, helped to revive villages that were moribund. Many Brits take an active part in the local community and in cultural and social associations, although most of us are careful to act like foot soldiers rather than generals.” 

 

For these reasons, and because of Brexit, France is in many ways our second home, but we should avoid turning this beautiful and magical corner into little Britain, altering the tranquility and unique character of French customs.  

If you are also dreaming of moving to France and, like us, you have fallen in love with that magical part of Provence, then Universal Partners FX are here to solve all your questions about buying property abroad and transferring your money. Give them a call today and find out how much they can save you when transferring your hard-earned money.