BrexitEU ReferendumSpanish property

Is the Future becoming a Little Clearer?

By July 6, 2017 No Comments

Brexit2-300x250With Brexit, we are all in the same boat. Writers based in Spain have the same concerns as readers, but with a slight advantage in that we focus on its effect upon our specialities. Mine are pre-acquisition building surveys and valuations, the latter being principally as an expert witness for UK and other countries’ courts regarding divorce, tax, inheritance, and other disputes relating to the value of properties in Spain.

When the Brexit result was announced, everyone, including many Leave supporters, were in shock. “What have we done?” and “How will it affect me?” For a year, we haven’t had an answer to either of those questions. Now, the UK government has put forward how they will treat EU nationals within the UK, assuming that similar arrangements will be made for UK nationals in Europe. 

As hoped, there may be relatively little change to the current situation. Those who have been here for five years or more, should be permitted to stay for as long as they wish. If you haven’t been here for five years, then there will be some interim arrangements until the five-year stay is completed. So, make sure that you are registered empadronamiento!

The UK is stressing that they are prepared to carry on the reciprocal arrangements for healthcare, pensions, rights to work, study and the like, so those big worries should be removed. Additionally, family members of those permanently resident will be able to benefit from that status too. No doubt all will be only after jumping through administrative ‘hoops’. Oh dear, more queues!

However, and this is where it begins to affect the property market, those arriving after the unspecified ‘Specified Date’ will be able to stay on a temporary basis, but “they should have no expectation of guaranteed settled status”. If the reciprocal of that is applied to Brits wishing to be expats in Spain, they will have to comply with whatever the undefined arrangements are for benefits, health service, etc. So, Brits considering settling here, assuming the ‘Specified Date’ is when the UK leaves the EU in 2019, must be established here before then. Expect a rush of UK buyers over the next year or so, as after that date their situation will be much less certain.

As Brits based here, we must open our eyes wider too, building up relationships for working for EU nationals, rather than concentrating on UK buyers. After 2019, we are likely to see a reduction in Brits intending permanent emigration to Spain. However, the tourist market should continue as before, though the number of second home buyers may reduce.

Regarding values, the reduction in UK buyers is currently being balanced by increases from other Northern European countries and also by a gradual resurgence of Spanish wealth. However, there are many new properties being built and remodelled, speculatively, and there is concern that there may be an over-supply building, evidenced by agents’ commission rising to 10% and more on some new builds and new cars being offered to new home buyers as part of the ‘package’. Those were the evidence of selling difficulties just before the ‘bubble’ burst the last time. When interest rates rise, as they must surely do to control inflation, there will be many more owners finding their costs are more than their income.

As always, interesting times ahead!