Sellers: how to use Brexit to your benefit
If you’re a UK resident who owns property in Spain, the latest news is not all doom and gloom. There are still a couple of ways to make Brexit work in your favour and give you more bang for your pound.
Since we last wrote about Brexit, just a week after the UK’s referendum to leave the European Union in June, much has changed.
On June 22, one British pound was worth 1.30 euros, already down 10% on its value in November 2015, as the referendum loomed. By July 6, less than a fortnight later, sterling had already lost another 10% against the euro, falling to a little over 1.17€ to £1. At the time of writing, £1 is trading at a tad more than 1.10€, despite Britain’s latest better-than-expected inflation data, with most analysts not expecting much positive improvement before the end of the year.
If you live in the UK and used pounds to buy a property in Spain at pretty much any time over the last decade, with the exception of the 12 months from December 2008-November 2009, the chances are you got a much better deal converting sterling to euros than you would get right now and, foreseeably, in the near future.
As a result, if you’re in the market, or are thinking of being, to sell your property in Spain, with a view to either retaining the proceeds in euros or converting them back into pounds to repatriate to the United Kingdom before the day dawns when QE2-faced banknotes are worth little more than ‘papel higiénico’ across the channel, the probability is that you’ll be quids in for quite some time to come.
Should you be among the lucky Brits who bought in the right place at the right time and have already seen the value of your property in Spain rise as the market has gradually staged a recovery over the last three years, you also stand to benefit if you plan to purchase another place in the sun.
While the prime locations on the Costa del Sol, such as Marbella and Estepona, have already seen the volume of sales rebound to pre-crisis levels, there are still bargains to be had even in the most in-demand areas for those in the market for a new property, even if you’re planning to use British pounds to fund the purchase.
According to the Ministry of Public Works, Spanish house prices remain well down on the all-time high of just over 2,100 €/square metre, which they reached in the first quarter of 2009. In the second quarter of 2016, the average price per square metre of a home in Spain stood at 1,506€, equivalent to £1,345 at the time of writing.
Given that the average price per square metre of a house in the UK is £2,216 (2,482€, at current exchange rates), according to research from British bank Halifax in March 2016, buying a home on the Costa del Sol, where the sun shines 325 days a year, where the winters are hardly cause for discontent, and where the living is easy most of the time, even the ever less valuable pound will still go a lot further and buy you much more than it would in the Brexit Isles.
By Adam Neale | Property News | October 20th, 2016