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What Brexit means for British buyers

What Brexit means for British buyers

The UK’s decision to leave the European Union raises some important questions. Here’s how itwill affect British buyers in Spain.


Can I still buy a property in Spain?

Yes. Britain is still a member of the EU and British citizens enjoy the same rights today that they did last week.

It is likely to take at least two years to leave the EU, and many more years to settle the resulting changes in trade agreements. British buyers are unlikely to feel the impact for some years.

What does a fall in Sterling mean?

A weakened Pound is the most immediate effect of Britain’s referendum. In effect, Spanish property has just become more expensive for UK buyers.

The exchange rate is expected to be volatile over the coming months, but buyers can take steps to insulate themselves from currency risk. It is also worth setting this in a wider context: While Spanish house prices have been steadily recovering over the past 2 years, they remain 32% cheaper than their peak in 2007.

Spanish property remains excellent value.

What will happen to my property when the UK leaves?

Spain has a long history of welcoming buyers from overseas, who now account for 1 in 5 house sales. Non-EU buyers are extremely active in the market and enjoy very similar rights to EU nationals.

Leaving the EU/EEA is highly unlikely to impact the rights of British citizens to buy property in Spain. Overseas investment is too important to the economy.

Will I still get a mortgage?

Yes. Spanish banks typically ask foreign buyers for a deposit of up to 40%. While there is scope for this to rise, it is already at a level that provides banks considerable protection and is unlikely to see much adjustment.

Meanwhile, the economic climate in Europe is wedded to low interest rates. Borrowing costs remain good value.

Will the Spanish property market crash?

British buyers are important to the Spanish market and they are the largest single nationality among overseas investors. However to put this in context, Brits form 4% of the market.

There are two reasons Brexit is highly unlikely to trigger a crash. Firstly, foreign buyers are a diverse group: German, French, Belgian, Italian and Swedish (among many others) are all an extremely active, growing part of the market.

There may be some localised pain, but even a complete collapse in UK demand (again, totally unlikely) would only put a small dent in the market.

Secondly, the market has nowhere to go. Spanish property has been recovering steadily since 2014, but remains a very long way off its peak. The worst we expect from Brexit is restrained growth.

Is my EHIC card still valid?

Yes. The European Health Insurance Card provides reciprocal health cover for travellers in the EEA. It will remain in place for at least two years while Brexit negotiations are in motion.

European countries are keen to ensure that their citizens enjoy healthcare while travelling, so it’s entirely possible an EHIC agreement (or something similar) will remain in place even after Brexit.

Will I get full healthcare if I move to Spain?

For now, yes. As long as Britain remains in the European Union, reciprocal healthcare arrangements continue as before. Expats who live in Spain and contribute to the social security system already receive full healthcare, and will continue to do so regardless of Brexit.

The situation for British pensioners is less clear. The current cost of their healthcare is met by a per capita payment from the UK to Spain for every pensioner who has completed the S1 form and is in receipt of a UK pension.

Nobody knows if this arrangement will continue, though many commentators predict British pensioners will require some form of health insurance post-Brexit.

What about my pension?

Under single market rules, UK citizens living in Spain (and indeed the whole EEA) have their pensions and social security payments automatically uprated each year in line with local inflation.This system is a mutual EU arrangement and is likely to become a negotiating point in Brexit talks.

In the worst case, British pensioners in Spain could get similar treatment to those in Canada and lose their automatic right to pension increases.

How will inheritance work?

British citizens (and indeed all EEA residents) currently get very good tax treatment in Spain, paying the same inheritance tax as locals.

Crucially, the double-taxation treaties that enable theseare NOT made in the EU. Therefore Brexit has no effect on the existing tax agreements between the UK and Spain.

What happens next?

In short, nothing for quite some time.

Exchange rate fluctuations will be the only visible effect of Brexitin the short term.

The two year process of leaving the EU will not begin until Article 50 is triggered and this is currently scheduled to happen inOctober 2016. (Despite protestations, Europe cannot force a faster pace until Britain formally takes this step.)

It is also important to note that this referendum is non-binding, and British politicians willnow enter a protracted period of horse trading over what to do next – or even who’s in charge.

With Brexit leaders already dialling back their rhetoric and promises, it is not a foregone conclusion that Britain will completely leave.Huge debating points now remain over whether Brexitmeans a totalwithdrawal from the single market (EEA).

Time will tell, and it all serves to slow the process.

The net effect is Britons will continue to enjoy the benefits of European citizenship for some years, and can expect a broadly similar deal once Brexit is complete.


The British love affair with Spain continues.

 

source: Kyero.com

Bankinter Forecasts 20% Rise in Home Sales in 2016

According to a recent report published by Bankinter, the demand for housing in Spain will continue to grow, reaching up to 420,000 home sales in 2016 and up to 450,000 in 2017, and that the price increases shall not exceed 3% on average, or 5% for those in the best locations.

These figures represent an increase in transactions of around 20% compared to the total of 354,132 homes sold during 2015, according to the National Statistics Institute’s data. Moreover, the Bankinter report indicates that second hand homes will continue to be the dominant choice in a scenario of economic recovery, accounting for over 85% of all home sales transactions carried out in the coming quarters.

As the homes being constructed in the second half of 2015 come on the market, says Bankinter, sales of new homes should increase to account for over 15% of the sales, with the number of transactions reaching possibly 60,000 or 70,000 units per year.

This increase in demand, explained the financial institution, is due to the expected improvement in employment, as well as low interest rates and the greater attraction of housing as an investment.

With regard to prices, the report notes that the residential market varies depending on the area, but that average prices are likely to rise, driven by a lack of supply in places like Madrid or Barcelona. In this regard, the report also indicates that the first increases in land values could begin to have an impact on the final prices of housing.

However, El Mundo reported that Bankinter emphasise that these price increases will not be significant as some of the purchases will be for foreclosed housing awarded to the banks, being sold at great discounts. Moreover, as a result of these advances in the market, the ‘stock’ of unsold new homes could fall to below 500,000 units during 2016.

 

 

 

source - Kyero.com

Home Sales Increased by 24.2% in August

 

The sale of homes in Spain increased by 24.2% in August, compared to the same month of 2014, reaching a total of 29,369 transactions, according to provisional data published by the National Statistics Institute yesterday, which corresponds to sales recorded in the Property Registers of transactions carried out in months prior to the reference period. The year-on-year increase in August is 10.3% higher than the figure recorded in July, when the number of home sales grew by 13.9%.

With the August upturn, home sales accumulated 12 consecutive months of year-on-year increases, thanks exclusively to the 50.5% increase in transactions for second hand housing, which reached a total of 23,428 transactions, since the sales of new homes dropped by 26.5% in August, compared with the same month in 2014, to 5,941 transactions.

In the first eight months of this year, home sales accumulated an increase of 12%, with transactions on new housing registering a decline of 35.7% and those on second hand housing increasing by 43.9%.

Month-on-month (August over July), home sales fell by 10.2%, compared with the 17.7% decline registered in August 2014.

El Mundo reported that most of the home sales in August (90.5%) related to free housing, which registered a year-on-year increase of 24.5%, to 26,570 transactions, while there were 2,799 transactions on protected housing (9.5%), representing an increase of 21.2% over August 2014.

In August, the largest number of home sales per 100,000 inhabitants were recorded in Valencia (110). In absolute terms, Andalucía remained in the lead for home sales in August, with 5,984 transactions, followed by Valencia (4,335), Catalonia (4,286) and Madrid (4,242), while in relative terms, the regions where home sales increased most year-on-year were Murcia (49.9%) and Aragón (39.5%). In contrast, Castilla y León (-0.5%), Extremadura (5.1%), and Galicia (6.2%) registered the most negative year-on-year rates.

 

 

 

 

source  kyero.com

Spanish House Prices Register Second Greatest Decline Globally Since 2012

  


Spain is the second country amongst the major world economies to record the greatest declines in their house prices since 2012, behind only Greece, according to a recent study published by ‘The Economist’ magazine.

Specifically, since the first quarter of 2012, Spain has accumulated a reduction in the price of housing of 14.3%, a figure exceeded only by Greece, which accumulated a decline of 25.6%.

In the list of 26 leading world economies, only four other countries have registered declines in their housing prices in the past four years: Italy (-13.6%); the Netherlands (-6.8%); France (-6%) and Singapore (-2%).

In contrast, the countries which recorded the greatest increases in their housing prices were Hong Kong and Turkey, with increases of 61.4% and 56%, respectively, followed by Brazil (+35%), the United States (+30%), South Africa (+29.1%) and the United Kingdom (+24.9%).

Over the last year however, El Mundo reported that Spain registered growth of 1.6% in its housing prices, above Belgium (+0.7%), France (-2.3%), China (-2.4%), Italy (-3.3%), Singapore (-3.7%) and Greece (-5.9%).

Hong Kong and Turkey were also the countries to register the largest growth year-on-year (of 20.8% and 18.8%, respectively), followed by Ireland (+13.4%), Sweden (+10.3%), Australia (+7.5%) and South Africa (+7.3%).
 
 
 
 

 
source kyero.com

House Prices Rose 5.1% in Q2

 

The price of housing in Spain increased by 5.1% year-on-year in the second quarter of the year, according to the latest statistics from the Association of Property Registrars. This increase is almost double the increase recorded in the first quarter of the year (2.65%), which the Registrars point out "consolidates and intensifies the change in trend which began in 2014”.

 

Quarter-on-quarter, the increase in housing prices amounted to 2.8% in the second quarter over the first. Thus the pace of growth of the past few quarters has softened the decline since the peak levels reached in 2007, to 29.2%.

 

A total of 87,187 home sales transactions were registered in the second quarter of the year, which is 11.1% more than in the same period of 2014, and the second highest number of transactions recorded in the last nine quarters, although the figure is 3.7% less than that recorded in the first three months of the year.

 

In the last twelve months a total of 335,163 home sales transactions have been registered, which is 2.7% more than the accumulated figure up until the first quarter of the year.

 

Once again, a great difference was noted between the number of new and second hand home sales in the second quarter. While a total of 18,482 transactions were recorded on new homes, representing a decline of 18.5% over the previous quarter, some 68,705 transactions were carried out on second hand homes, representing an increase of 1.2%.

 

The region which registered the greatest number of homes sales transactions in the quarter was Andalucía, with 17,751 transactions, followed by Catalonia (13,228), Valencia (12,760) and Madrid (12,514).

 

According to El Economista, foreign demand for Spanish homes remains strong and accounted for 12.8% of the total home purchases in the second quarter, rising from the 12.2% recorded in the first quarter, which shows a certain level of stabilisation in the percentage of purchases by foreigners, at around 13%.

 

The foreign nationalities leading the ranking for home purchases in Spain are the British (19.8%), French (8.1%), Germans (7.6%), Belgians (6.5%), Swedish (5.6%) and Italians (5.3%). The Russians rank in seventh position, with 3.9%, confirming the downward tendency of recent quarters.

Source Kyero.com September 2015