Following on from our previous post regarding the implications of the Brexit vote affecting expats in Marbella, today we will be looking at how it affects you being able to buy property in Marbella. Last week the UK decided to leave the European Union and has therefore raised some important questions amongst those wanting to buy property in Marbella or the surrounding areas of Nueva Andalucia, Puerto Banus and Benahavis. Here’s how the Brexit will affect you.
Can Brits Still Purchase Property In Marbella?
Yes. Technically, Britain will still be part of the EU for at least two years whilst negotiations take place and potentially even longer for trade agreements to be put into place. British citizens can enjoy the same rights today that they did before the Brexit took place.
What Will Happen Now That The Pound Has Dropped In Value?
The weakened sterling is the most immediate effect of Britain’s referendum. In effect, property in Marbella has just become more expensive for UK buyers, however it is important not to panic and keep things in context. Whilst the Marbella property market has been steadily recovering over the past two years, over the past 2 years, property prices still remain 32% cheaper than their peak in 2007.
What Will Happen To My Property Once The UK Eventually Does Leave The EU?
Spain has a long history of welcoming buyers from overseas, who these days account for 1 in 5 property sales. Non-EU buyers are increasingly active in the market and benefit from very similar rights to EU nationals. The fact that Britain has decided to leave the EU is unlikely to impact the rights of British citizens being able to buy property in Marbella. Overseas investment is too important to the economy.
Can I Still Get A Mortgage If I Buy Property In Marbella?
Yes, you can. The Spanish banks typically ask foreign buyers for a deposit of approximately 30% of the total property price. Whilst it is true that there is scope for this to rise, it is already at a level that provides banks considerable protection and is not likely to fluctuate much.
Is The Spanish Property Market Going To Crash?
British buyers are extremely important to the Spanish market and they are the biggest nationality among overseas investors. But to put this into a simple context, British citizens make up 4% of the market. There are two main reasons that the result of the Brexit referendum is not likely to trigger a crash in the Spanish property market. First of all, foreign investors are a diverse group made up largely of: German, French, Belgian, Italian and Swedish (among many others) and they are all an extremely active part of the market, contributing to its growth. Whilst it is true that there may be some localised pain, it is important to remember that even a complete collapse in UK demand (again, completely unlikely) would only make a tiny dent in the Spanish property market. Secondly, the market has nowhere to go. Spanish property has been steadily recovering since 2014 and it is still a long way off reaching its peak. The absolutely worst you can expect from Brexit is a hindered growth.