There are an array of economic elements to the recent Brexit vote which will be clarified and confirmed over the coming weeks and months. While much of the argument surrounds the U.K.’s access to the European single market many property investors are growing concerned about Spanish properties and UK expats. Only this week we saw Nicola Sturgeon, the first Minister of Scotland, meeting with various EU nationals living in Scotland. She was looking to allay any fears regarding their future life in Scotland after Brexit.
So, is there a chance that Spanish property prices will be impacted by returning UK expats?
More negative headlines
It is no secret that UK expats have a very strong influence over Spanish property prices in many of the country’s coastal regions. This relationship has been growing stronger for decades now and for many UK expats looking to pastures new in their later years Spain is the obvious choice – mainly because of the weather and the lifestyle. This has led to significant demand for property in some of the coastal regions such as the Costa del Sol, etc.
What can we expect in the medium to longer term? Is there a danger that the Spanish will forcibly eject UK expats who live (and spend money) in the country?
Spanish coastal property prices
Spain was one of the worst hit in light of the collapse of the euro and the European economy. The property market went into freefall, Spanish banks were left with unwanted property assets and unemployment increased to record highs. While a number of UK expats did return to their former homeland the vast majority have remained in Spain, retaining their property assets. It is difficult to estimate the real impact that expats returning to the UK had on the Spanish property market when looking to jettison their Spanish assets, but one thing is certain, it was not positive!
Scare stories
As we have seen in many European property markets, there have been a number of scare stories regarding UK expats living in the likes of Spain, Portugal, etc. Many UK expats have been abroad for decades and have taken to the local way of life. Despite the fact that some so-called “experts” would have you believe the Spanish government, as one example, would jettison UK property owners this will not be the case.
Even though the Spanish property market has made some gains in recent times, although recovery is extremely slow, a flood of sellers from the UK expat community could tip the sector back into a downward spiral. If you read the news, neither the Spanish nor the Portuguese governments, popular destinations for UK expats, has even suggested that UK expats would be repatriated after the Brexit process is complete.
Short-term opportunities
It will be interesting to see how these scare stories impact Spanish property prices in some of the coastal regions popular with expats. If the stories continue to circulate, with little in the way of factual evidence, there may well be some interesting investment opportunities to take assets off the hands of desperate sellers. In the longer term the procedure for future UK expats moving to the likes of Spain may be a little more complicated but this will not stop a determined expat!