With the EU referendum now just two weeks away, many overseas property owners in the UK with holiday homes in Spain are confused and frustrated over the affects of a Brexit on their investments.
What would happen to the Spanish property market if Britain leaves the EU? What would happen to the value of UK owners’ Spanish property? With so much uncertainty surrounding the vote, the market has now become stagnant.
If you currently have a holiday home in Spain or are thinking of buying, remember to protect your investment with Overseas Property Insurance, particularly at this volatile time.
John May, of Sell4LessSpain.com, explains how a Brexit might affect those with Spanish properties: “It is expected, and widely reported, that if Britain decides to leave the EU, the sterling will drop significantly in value against the euro, meaning properties in Spain become more expensive for British purchasers to buy.
“It is also expected that an exit from the EU will make it harder for British buyers to get mortgage finance for Spanish purchases. All this means that the supply of ready and, more importantly, able buyers may well dwindle, which would drive down prices as sellers compete to discount their properties to make them more attractive to the limited supply of buyers.”
Although he continues: “However, the real problem is uncertainty. What will happen is but a guess, although the one thing that is guaranteed is that British and other northern European citizens will always want and seek out a life under the Spanish sun, so long-term, personally, I doubt there will be much change either way once the dust has settled.
“At the moment, the market is stagnant and therefore selling is slightly harder, as there are fewer buyers, as everyone holds off until the referendum results are known. So if you do need to sell now, then it’s important to reduce your fees as much as possible, as the chances are you won’t get a premium for your property.”
If you are considering purchasing an overseas property in Spain, May advises: “As a buyer, of course, this could be an opportunity to buy a property a little cheaper. However, you run the risk of not knowing what the future may hold for your property and the money invested.
“Traditional Spanish agents typically charge between 5-7% plus IVA for their services, meaning on a €200,000 sale at 5%, the seller would have to hand over €10,000 plus IVA to the agent. Using an online agency can save you a lot of money and your property will be listed with all the major property portals.”
He concludes: “If you can wait until after the referendum, then, if the UK stays in, you may find your property is worth slightly more than it is now. On the other hand, it is a risk, as if we vote to leave, then there will probably be a dip and you will get less for your property.
“Either way, whenever you decide to sell, look further afield than the local estate agent in the resort closest to your home – compare them to agencies like Sell4LessSpain.com. You will almost certainly be able to save considerably, as there is no commission payable.”