stu7373

Hi all,

Just after your advice.

We are thinking of buying a holiday home over in Spain, but as we all know Brexit is looming around the corner. Do you people think it is a good idea to do this? Or is it best to save our money until Brexit deals are made and people know what is gonna happen.

Our short term plan is to have a house out there and use it all the time when the kids are off school. Long term plan is to them make Spain our home. But in truth that will not be for at least another 7 years, until our last child finishes school/college/6th form etc...

Any advice will be much appreciated, and any other suggestions will be good to hear.

Thanks for your time

amideislas

Look, if you're going to buy, do it now. The pound is likely to continue to tank, and that will make any purchase abroad more expensive. Especially if you're working with multiple hundreds of thousands.

Then there's the issue of residence rights. Brexit is likely to require 5 years or more. In the end, Brits aren't likely to have any specific "right" to live in an EU member state without substantial barriers similar to say, an American national. However, it's far more likely that if you already have these rights, you'll be allowed to keep them, even if Britain refuses to provide the same reciprocal rights (it wouldn't make any sense for Europe to deny this).

In addition, the EU economy is growing while the UK economy is contracting (and that will accelerate as Britain leaves the EU), so UK property prices will fall, while Spanish property prices will only rise.

Really, it's now or never.

Moses2013

I would not agree that it's now or never and that's what most estate agents have always said. According to amideislas, prices will only increase? How can that happen if the biggest percentage of holiday home buyers in typical British areas are British and they apparently no longer have rights??? Just because the housing market in Mallorca is booming, also doesn't mean prices will increase in the whole of Spain. First it's important to know where the OP wants to buy and what type of property the OP wants to buy. There are actually many places where prices keep falling and will keep falling. It could be that you have an old population and these people are dying. With no work available, it's pretty hard to attract new young people to those areas, even if the beach or village is nice to look at. Young people want to live in the city, so yes prices are increasing there but for how long if wages aren't? There are a lot more factors to consider, so more information would be good. I agree that some areas will remain expensive and always have been but we'll still always have boom and bust.

snikpoh

What an assumption! They may want to buy elsewhere like a lot of Brits have - not everyone wants or even likes being next to other Brits whilst in Spain.

KieronF

Another consideration is the knock-on effect of the rental crisis on property prices in some areas. In those regions/islands that are refusing to issue tourist accommodation licences some owners find themselves unable to generate income and will not be able to afford to keep the property. Many agents believe the surplus of properties on the market will drag prices down until supply and demand stabilise. Depending on where you want to buy, waiting may be a good option as prices may fall.

Moses2013

Exactly, so nobody can say now or never if they don't know the facts and you have to consider every area.
That's why I compared different areas. Mallorca housing market is different than the housing market in Valencia etc.

johnnyone

That really is a bit of a one-sided view and written as though the Uk is about to go down the tubes.
The UK is not contracting, it is currently growing albeit more slowly than some other countries.
I see UK unemployment reached a 42 year low, down to 4.4%. hardly a sign of impending doom.

amideislas

In the Balearics, the highly publicised (in British media) nonexistent "rental crisis" you speak of is a programme to address the large number of unlicenced urban dwellings being offered for tourist lets on airbnb and others.

The problem is that in the larger cities, there aren't enough apartments available for long term renta to accommodate the local population. And secondly, there's no control over the holiday lets, they're uninsured, and most don't pay a cent in taxes on their earnings.

Also, apartments are terraced residential dwellings. People live there. Without any rules, many apartment complexes are being turned into holiday let blocks full of tourists .. Without consent of those living there.

Otherwise, it doesn't affect legal holiday let properties; rural villas, detached houses... They can all still get licences as they always have.

This will have no impact on property prices. But the continuing economic growth most certainly is affecting property prices. 18% increase in the past year alone.

Assanah

I think the most important question is not whether to buy or not to buy now, but if you will be able to get a visa to live in Spain. If you are fine with living in Spain for a few weeks a year you probably won't have a problem. However, moving there full time will be difficult. Check the requirements for US citizens, for example. What requirements do they need to fulfill in order to live in Spain full time. That could give you an indication if moving to Spain permanently after Brexit is an option.

amideislas

Couple of things... First off, Mallorca is hardly a "British area". Yes, there's one or two of the stereotypical "Brits abroad" neighbourhoods, but by far, Germans and other continental Europeans are the dominant expats.

Second, yes, surely it's different elsewhere, but generally the Spanish economy is improving (one of, if not the fastest growing in Europe) and that will have greater impact on property prices than whether or not Brits can afford it. Europeans can afford it too. Britain isn't he only first-world country. It is, admittedly, one that enjoys EU freedom of movement... for now.

And come 2019, it'll still be just as easy for Europeans to move to Spain as it was before. It won't however, be as easy for Brits. And then there's this continuing devaluation of sterling.

So again, if you're going to do it, better to do it before.

KieronF

I am sorry, but on that point you are quite wrong. In Menorca, no new licences will be issued and only properties more than ten years old will be considered once the ban is lifted - this to stop new builds being snapped up and bought as tourist rentals. A good many owners on the island do not have licences, yes, their problem, but the situation now is that without rental income many can no longer afford the property and will have to sell. The net effect of that is that many properties in tourist areas are coming onto the market at the end of the season and the simple forces of supply and demand will result in property prices falling, albeit in the short term.

Moses2013

I never said Mallorca is a British area. I wrote "How can that happen if the biggest percentage of holiday home buyers in typical British areas are British and they apparently no longer have rights??? According to your post, it's now or never and after that property will just increase. As you live in Mallorca, it's different for people elsewhere and you can't compare.


This was just one example that property prices are never the same and it's different for each individual. If worried about Sterling and you have the money now, you could also buy Euro today.

stu7373

Hi folks,

Thanks for your comments.
We are looking to stay on the Orihuela Costa region. Good for airports, and there is plenty to see and do in the area.
Also not too far away from the Sierra Nevada ski resorts.
Constantly looking on property websites. But probably not gonna get to Spain now until towards Christmas, New Year time, due to my work and kids school holidays...!!!

bolton wanderer

I would arrange a long term (12 month) rental first. This will allow you to have holidays when you like and check out what the place is like out of season. You may find that once you start taking extended holidays (over a month) you might prefer to be be somewhere else. It costs around 20% of the house price to sell & buy somewhere else in Spain....So it makes sense to get it right 1st time.

Moses2013

As bolton wanderer mentioned, might be good to check out of season. I really wouldn't worry about prices increasing in the Orihuela region and take your time. The population in that part of the country is actually declining and it's not going to change that quickly. There's just not enough work in the area and young Spanish people need to be where the work is. And even if there is work for some in the area, it's not as if salaries are going to increase by 20% this year. Home purchases made by UK citizens have fallen and it's the same for Germans/French. People have to spend so much money on rent and mortgages back home, they just don't have the money to buy holiday homes and many don't want to either. Of course you still have rich buyers from elsewhere looking for top location properties but that's a different area and market.