Will Brexit Affect Brits Buying Homes in the EU?
With over 1 million Brits living across the EU, there’s concern the Brexit result will disturb investment in the European housing market. However, the general consensus is that, despite a period of uncertainty, there’ll be no severe adjustments and markets will continue to operate as they’ve always done.
Of course, whilst the UK negotiates the terms of its exit under Article 50, there’ll be no changes in circumstance as EU membership will continue. Even after Britain does eventually leave, there’s no concern whatsoever that current homeowners will be forced to sell up or lose their property.
For the estimated 750,000+ expats in Spain, their Prime Minister Mariano Rajoy has reassured Britons currently living or working in the country not to fear. How much this stays the same post-Brexit is unclear at the present time, although many forecasts are promising.
The main area of concern is that the weaker pound will make it more expensive to buy property abroad. However, the drop in performance is likely to be short-lived as sterling begins to stable.
Reassuringly, a recent FTI Consulting poll of institutional investors has shown that two-thirds of those surveyed believe London will retain its status as Europe’s unrivalled financial hub.
In more good news for the economy, the FTSE 100 recovered all the ground it lost after the ‘Leave’ vote and actually rose to its highest position since August 2015.
However, there is still some worries about the state of UK affairs, in particular the leadership contests of the Conservative and Labour parties, and effects the Bank of England NGRE will have on the pound.
Experts thus advise foreign property investors to make their move in the next two years or so whilst the UK is still a part of the European Union.
EU Property Market
The marketing director of Kristall Spaces, Branson Atterbury, has compounded this viewpoint. He observes that:
“If Article 50 is triggered, we predict no change for the following two years as we negotiate our exit and trading relationship with the EU. Purchases before conclusion of the exit will not be affected retrospectively.”
He also goes on to dispel some of the negative forecasts that have been bandied about after the Brexit result:
“We expect sterling will strengthen once the uncertainty has been removed… Furthermore, with 1.2 million UK citizens living in EU member states and 2.9 million EU citizens living inside the UK, we predict both the EU and UK governments will agree a fair deal for both sides without delay.”
Francois Marchand, the director of a French property agents Erna Low Property, has also looked to reassure investors that the post-Referendum fallout won’t be detrimental. He notes that prospective buyers should evaluate currency fluctuations and make investments based upon personal circumstances. He says:
“We are sure that there will be no change in buying costs for those looking to buy property in France, and there are no planned changes in taxations for the income made from property rentals, as well as no difference in capital gain tax – as of 1 January 2015, a single rate was applied for EU and non-EU members.”
Other concerns regarding unrestricted travel to the EU and difficult visa stipulations are also misguided. More Britons live in the USA, Canada and Australia alone than in the entire EU. Requiring a visa for these countries has obviously not deterred investors so there’s no reason why it should do in Europe either.