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.

On Monday, Tony Lloyd, the shadow Northern Ireland secretary, said that Boris Johnson was pursuing a Brexit that was either “disastrous” or a “fantasyland wishlist.”

Lloyd was responding to a letter that the prime minister had written to the EU about reopening the Irish backstop issue and suggesting its replacement by some form of commitment that would guarantee the prevention of a hard border between the UK and Ireland. Johnson’s new position contradicts his previous support of Theresa May’s deal. As Tony Lloyd said: “Boris Johnson seems to have forgotten that he voted for Theresa May’s deal including the backstop. Whichever Brexit outcome he pursues, whether it’s a disastrous no-deal or this fantasyland wishlist, Boris Johnson clearly has no qualms about putting jobs, rights, prosperity or peace in Northern Ireland at risk.”

While Johnson believed that the EU will be receptive to his proposal, on Tuesday Donald Tusk rejected his request. As a response, a Downing Street spokesman said: “that unless the withdrawal agreement is reopened and the backstop abolished there is no prospect of a deal. It has already been rejected three times by MPs and is simply unviable as a solution, as the PM’s letter makes clear.”

Johnson has stated on more than one occasions that he is willing to crash out of the EU without a deal on 31 October, despite warnings that the UK will face food and medicine shortages.

The letter

Johnson’s letter is an attempt at negotiating with the EU which appears as a regressive move, bringing up again the controversy around a hard border with Ireland that the EU and many in the UK and Ireland are clearly against. Before meeting European leaders, Johnson addressed the four-page letter to the President of the European Commission Donald Tusk saying that the backstop is “anti-democratic and inconsistent with the sovereignty of the UK.” He added that there could be different customs arrangements at the Irish border within the two-year transitional period after Brexit. However, having some general commitments in place that would prevent a hard border until the proposed system was agreed, was also a solution, Johnson noted.

But the EU does not wish to renegotiate the withdrawal agreement and the backstop. According to Guardian sources: “There was a two and a half year negotiating process in which the EU compromised, including on the question of the backstop. The withdrawal agreement is not open for renegotiation and the backstop is not open for change. A legally operable backstop to avoid a hard border remains central to the withdrawal agreement for the EU27.”

Johnson said: “I propose that the backstop should be replaced with a commitment to put in place such arrangements as far as possible before the end of the transition period, as part of the future relationship. I also recognise that there will need to be a degree of confidence about what would happen if these arrangements were not all fully in place at the end of that period. We are ready to look constructively and flexibly at what commitments might help, consistent of course with the principles set out in this letter.”

In the letter, he claims that the backstop is anti-democratic because it could force “the UK potentially indefinitely into an international treaty which will bind us into a customs union and which applies large areas of single market legislation in Northern Ireland”.

But an EU source described the letter as “a total moving of the goalposts on an issue of great importance and sensitivity that affects the lives of people on the island of Ireland.”

What happens next?

Johnson has also been accused by Tory MPs who have written a letter saying that the prime minister is preparing for a no-deal Brexit as his demand for the abolition of the backstop is simply impossible.

According to No 10, the prime minister has been clear: “there cannot be any actual negotiations unless the backstop goes; that’s the message he has delivered to leaders in his phone conversations and he will do that face to face. We have been clear that what the EU needs to understand is unless the withdrawal agreement can be reopened and the backstop abolished, there isn’t any prospect of a deal.”

Johnson will be meeting Merkel in Germany on Wednesday and on Thursday Macron, but the eyes of EU leaders will be on the UK, Tory MPs and opposition leaders as they attempt to block a no-deal Brexit on 31 October.

Are you importing or exporting?

If you are an importer or exporter who transfers money internationally, you are aware of the unpredictable movements of the pound due to Brexit and ongoing political developments. Universal Partners FX can offer valuable assistance, in-depth knowledge of the markets and tailor hedging strategies to help you make the most of your money. Give them a call today and find how much you can save on your international money transfers.

Many businesses that export only to the EU do not have the necessary papers to continue trading after a no-deal Brexit, reports have shown.

According to the Liberal Democrats, statistics showed that no deal would be a “wholly irresponsible political choice,” but the government said that despite only a small number acquired the necessary documentation, these were nonetheless “the firms responsible for the bulk of exports to the EU.”

Once the UK crashes out of the EU, UK firms would require an Economic Operator Registration and Identification (EORI) number to be able to comply with economic operators and customs authorities.

 What is an EORI number?

EORI stands for “Economic Operators Registration and Identification number” and can be used by both business and individuals when trading. The EORI number acts as an identification number in all customs procedures making processes efficient, not only for customs authorities, but also for statistical and security purposes.

The EORI number is made up of two parts. One includes the country code of the issuing Member State and the other a code or number that is unique in the Member State.

According to the European commission, a legal entity such as a company or a natural person can request an EORI. More particularly, “persons established in the customs territory of the Union should request the assignment of the EORI number to the customs authorities of the EU country in which they are established.” Also, “persons not established in the customs territory of the Community should request the assignment of the EORI number to the customs authorities of the EU country responsible for the place where they first lodge a declaration or apply for a decision.”

Exports and imports 

If you are a firm that exports and imports outside the EU, you will have an EORI number, but as The Guardian notes, “registration has become a pressing issue for the 245,000 who trade internationally only within the EU. A no-deal Brexit would be particularly difficult for them because, instead of having current rules apply during a transition, they could find their trading opportunities shut down after 31 October without an EORI number.”

In another article by the Business Insider titled “Just 3 in 10 British firms that export to the EU are prepared for a no-deal Brexit,” it is said that only a 27% of British businesses have secured an EORI number and that there is a growing concern that British businesses will not be prepared for a no-deal exit on 31 October.

Lib Dem MP Chuka Umunna obtained information from the Treasury that shows that many firms are simply unprepared for a no-deal Brexit. The figures also show that if exporters apply for an EORI number at the current rate, all businesses won’t be registered until maybe the start of 2021. Umunna said that the statistics show “an overwhelming majority of UK exporters to the EU are unprepared for a ‘no deal’ Brexit and will not be in a position to deal with the mountain of red tape and bureaucracy it will burden them with on 31 October.”

He added: “Pursuing a ‘no deal’ Brexit is a wholly irresponsible political choice of the new administration for which there is no mandate and which will put businesses and jobs at risk. Any form of Brexit will harm the economy and put obstacles in front of UK firms which is why Liberal Democrats not only want a final say for the people on any deal but are also the only party that can get into Government which is committed to stopping Brexit altogether.”

British small businesses are not prepared for a no-deal Brexit in October, and, as the Business Insider pointed out, are even less prepared than they were back in March. On the other hand, businesses that already spent millions of pounds for a no-deal Brexit in the spring are now less motivated to spend more money in case there are further delays, while others just simply cannot afford it.

Chancellor Sajid Javid’s announcement last week for additional no-deal Brexit funding is not especially encouraging as most of it will be used towards government competencies, and not really towards helping businesses prepare. 

A spokesperson for the HMRC – the department responsible for issuing EORI numbers – said it was doing “everything we can to help businesses get ready for the UK leaving the EU. Businesses who import or export goods need to take action, the first step of which is obtaining an EORI number (if they don’t already have one.) It’s simple and free and can be done online.”

If you are an exporter or importer and you worry about Brexit volatility, getting in touch with your currency exchange specialist will give you some peace of mind. Universal Partners FX are experts in the foreign exchange markets and can assist you when transferring large amounts of money or making regular international transfers. Get in touch with them today to find out how much you can save on 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.