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Britons Appetite for Spanish Homes Slows on Brexit

4. Britons Appetite for Spanish Homes Slows on Brexit

Britons are the most prolific foreign buyers of Spanish properties. However, since the vote for Brexit, there has been a lot of talk and worry about how it has and will continue to affect various aspects of the British economy, including the property market.

“While the early signs have been that the broader UK economy is coping well, the property market has fared a little less well,” said Battersea estate agent, Eden Harper “And, the same appears to be true for the British appetite for Spanish property.”

The Second-Home and Resort Industry Home Observatory (SHARIO) recently conducted a survey to capture the impact of the referendum result on British spending plans on Spanish property.  The insights from that survey don’t make for great reading.

SHARIO property market analyst Mark Stucklin, says British demand for Spanish property has fallen. Data from the Spanish Association of Land Registrars shows a 16% on-year drop in the number of Spanish property purchases by British buyers, logged with the Land Registry. The decline is the first in over three years, with Brexit the clear culprit.

Estate agents and property professionals who responded to the SHARIO survey work in Spain but specialise in selling property to British buyers. The weak pound was named as the main reason behind the Brexit-induced slowdown in activity. The immediate slump in the pound following the surprise referendum result, saw a number of British buyers withdrawing from purchases of Spanish homes, according to the survey.

Uncertainty over the potentially longer-term impact of Brexit on the UK and the European Union, has also affected demand for Spanish property. This has been experienced, not just in relation to British buyers, but foreign buyers from other countries.

“The reality of a weaker pound has undoubtedly caused nervousness among British buyers of overseas property,” said London bridge estate agent, Williams Lynch. “But, uncertainty over the future implications of Brexit is also playing a big part in the slowdown of all prospective foreign purchasers of Spanish homes.”

Since the pound recovered and the UK economy appears to have expanded despite the uncertainty, there have also been signs that interest from British buyers in Spain has stopped losing ground. Budgets, though, have clearly been affected, with potential buyers coming to market – or returning – with lower budgets than were on show earlier in the year. That’s a development that should provide at least some reassurance to estate agents.

However, according to Stucklin, one agent’s response to the SHARIO survey was punctuated with the comment: “You can forget about the British market for at least a year.”

The other side of the Spanish property market is, of course, the sellers. The occurrence of Brexit means that owners who are selling are being more flexible on price. If they really want, or even need to sell, they’re having to be.

“Of course, the popularity of Spanish holiday homes for British buyers is something that will always be affected by something like Brexit, or other major changes,” said Westminster estate agent, Andrew Reeves.

“But, while broader circumstances can and do change, the appetite for a holiday home in Spain is something that will likely remain and improve again, once there’s more certainty over the future of the UK’s relationship with EU.”

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