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Brexit impact on expat property owners
| Published: | 20 Jun at 6 PM |
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Tagged: Spain, Visas, Property Abroad, UK, Citizenship, Money, Euro, Exchange Rates, Pension Transfer, England, Travel Abroad
Brexit negotiations are now underway, but a lack of first-hand information on the UK government’s position is weighing heavily on UK expat property owners in EU member states.
Divorce talks between the UK and the EU are now ongoing, with Brexit Secretary David Davis stating the UK is seeking a ‘deal like no other in history’ – whatever that may mean. The plight of EU and UK expats is expected to be top of the agenda, but the effect of Brexit, whether hard, soft or somewhere in between is anyone’s guess. Fear of the unknown has been stalking expats for a year now, leaving many confused and unsure of what to do to protect themselves.
Property owners are especially nervous due to possible effects on their mortgages and the chances of selling if necessary. The general feeling amongst experts in the real estate sector is that existing owners will probable see few changes to their rights as property owners, even although they may not be able to continue living in them. Owning an overseas property and travelling to visit it is unlikely to change, although the worst scenario might include having to apply for a tourist visa to access a former permanent home.
Tricky issues such as healthcare, pensions, banking facilities and taxation are another matter, with no guidance at present available for those wishing to make plans for the future. For those wishing to purchase a holiday home in Europe post-Brexit, it’s possible that taking out a mortgage overseas might be affected by extended credit checks and even more bureaucracy than is now usual. Banks are there to loan money, and they’re unlikely to make mortgaging a suitable property too difficult as long as the borrower can prove affordability of the monthly payments.
As sterling continues to fall, exchange rates will make European properties more expensive for British buyers using the British pound. However, should the right to remain have been disallowed, Spain’s real estate market in particular will become a bargain basement as retired expats pack up and return to the UK. Many buyers are likely to take advantage of others’ misery, and wait to make capital gains when the market recovers.
It’s also likely there will be more room for price negotiations, especially when buying from UK citizens attempting to make money on the exchange rate after selling at an initial loss to avoid unwelcome changes in their lifestyles.
Divorce talks between the UK and the EU are now ongoing, with Brexit Secretary David Davis stating the UK is seeking a ‘deal like no other in history’ – whatever that may mean. The plight of EU and UK expats is expected to be top of the agenda, but the effect of Brexit, whether hard, soft or somewhere in between is anyone’s guess. Fear of the unknown has been stalking expats for a year now, leaving many confused and unsure of what to do to protect themselves.
Property owners are especially nervous due to possible effects on their mortgages and the chances of selling if necessary. The general feeling amongst experts in the real estate sector is that existing owners will probable see few changes to their rights as property owners, even although they may not be able to continue living in them. Owning an overseas property and travelling to visit it is unlikely to change, although the worst scenario might include having to apply for a tourist visa to access a former permanent home.
Tricky issues such as healthcare, pensions, banking facilities and taxation are another matter, with no guidance at present available for those wishing to make plans for the future. For those wishing to purchase a holiday home in Europe post-Brexit, it’s possible that taking out a mortgage overseas might be affected by extended credit checks and even more bureaucracy than is now usual. Banks are there to loan money, and they’re unlikely to make mortgaging a suitable property too difficult as long as the borrower can prove affordability of the monthly payments.
As sterling continues to fall, exchange rates will make European properties more expensive for British buyers using the British pound. However, should the right to remain have been disallowed, Spain’s real estate market in particular will become a bargain basement as retired expats pack up and return to the UK. Many buyers are likely to take advantage of others’ misery, and wait to make capital gains when the market recovers.
It’s also likely there will be more room for price negotiations, especially when buying from UK citizens attempting to make money on the exchange rate after selling at an initial loss to avoid unwelcome changes in their lifestyles.
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