Demand for Spanish property from British Buyers could be affected by Brexit

By HopwoodHouse, 02 August, 2016

Following the decision for the UK to leave the EU, the weakening pound and the potential changes that could come into effect following the Brexit decision could see the demand of Spanish property from British buyers change for the worse.

The demand for property in Spain has been growing since 2013; however since Brexit, markets could see a negative impact on areas that were high in demand, such as Alicante and Malaga but also slightly less popular areas such as the Balearics, the Canaries and Murcia. The strength of the pound has determined the demand for Spanish property but now that the pound has weakened as well as the general uncertainty surrounding the EU membership, it is expected that demand is going to drop and less purchases will take place.

Things may not be looking good for those British property owners looking to sell as there are likely to be less buyers about and this could mean that prices have to be dropped in order to encourage interest. Until a deal is put in place for the UK to leave the EU, it is possible that less people are likely to move to Spain. This is something that could last for at least two years as that is the length of time it will take to come to a deal. Therefore, those expats who are already living in Spain could find themselves living in uncertainty which as we know could last for a number of years, so expect to see more British expats returning to the UK rather than moving to Spain.

Those who own a property in Spain and have no plans to leave will not be affected for the time being, the concern for them will come when decisions have been reached about what will happen to the UK.

Last year, the figures show that the demand for property for sale in Spain from British buyers grew at a steady pace. This followed the strengthening of the pound and low property prices. British buyers made up 21% of the foreign market which is an increase of 42%. Many regions such as Costa Blanca and on the Costa Del Sol, is dominated by buyers that come from the UK.

One benefit of this is that for those who wish to purchase a property in Spain are likely to pay less as the strength of the pound is weakening. Therefore, converting sterling to Euros will mean that buyers get more for their money. The downside to this is for those who wish to move to Spain permanently and rely on a British pension will unfortunately get less Euros for their money.