For many years now, Europe has been the go-to destination for many Brits. The weather conditions in France, Greece, Portugal and Spain are far superior, and the properties are perfect for a second home. Those looking to invest may be wary after the implications of COVID-19 and Brexit, and understandably so. But how much of an impact have they actually had on the market this past year?
Taking Spain as a prime example, due to its easy links with the UK and Mediterranean climate, it is clear that the pandemic has been impactful. Travel restrictions have been in place, making it impossible for Brits to visit and view properties in person. The country’s economy also took a hit, with lockdown restrictions halting businesses and rental income for property owners nosediving.
Taking Spain as a prime example, due to its easy links with the UK and Mediterranean climate, it is clear that the pandemic has been impactful. Travel restrictions have been in place, making it impossible for Brits to visit and view properties in person. The country’s economy also took a hit, with lockdown restrictions halting businesses and rental income for property owners nosediving.
Although this has been the case, the demand for Spanish properties has not dwindled. Taylor Wimpey Espana reported a 39% increase in virtual viewings during the first week of 2021. Kyero also reported a 446% increase in Britons aged 18–24 viewing Spanish property on their site. When restrictions are completely lifted, we could see a sharp increase across the Spanish market and a return to the popularity it had seen before the coronavirus crisis began.
It is expected that the pandemic will have a temporary effect, one which will not detract from what Spain has to offer. Investors can be ensured that, when things are fully back to normal, Brits will once again look to rent or buy within the country.
Spain has always been an affordable location for Brits to enjoy their holidays or retirement. Brexit has, however, ended some of these hopes, with free travel being removed entirely. A Visa is now essential for living in the country permanently; those without one can only stay for 90 days over the course of six months. Holiday goers may not see this change as many do not stay for more than 90 days, but this is something to keep in mind for investors.
Those aiming at the British population in Spain may want to do more research on how achievable a monthly rental income will be in the wake of Brexit. The non-lucrative residence Visa does not allow people to work in Spain. Those looking to get one will have to prove they have €30,000 in savings or a minimum monthly pension income of more than €2,000.
A considerable number of British pensioners will be unable to realistically achieve this feat, meaning the market will shrink as a result. Therefore, investors will need to look to a higher-earning market. This may not be financially achievable for every investor, meaning it could be out of the question for some. Looking at renting out properties as holiday lets could be the way forward, but a plan must be in place to tackle the 90/180 rule. Finances can quickly be eaten up by travelling to and from the country.
Making sure there is a concurrent stream of tenants would be a difficult task, especially when it comes to handling Covid safety measures. Perhaps looking at advertising towards the native Spanish market is the smartest move after all. But, hopefully, amendments are made in the future to accommodate the damages Brexit and Covid are looking to have.
If you are considering investing in property in Spain, check out our blog on ‘The Top 5 Regions in Spain for Property Investment in 2021.’ With resilience in its blood, the Spanish property market is still deemed a viable investment option this year.