Own a home abroad? Then don’t rush to sell
THE dream of owning a holiday home in warmer Mediterranean climes has been dashed – or at least put on ice – for many would-be expats.
In the early hours of Friday morning, as the referendum result became clear, foreign currency specialist FC Exchange received calls from clients wanting to pull out of buying abroad and asking for their deposits on overseas properties to be returned.
Many potential buyers had already changed their pounds in the expectation of putting in an offer on a home once the votes were in.
But with the Brexiteers winning, overseas property specialists expect buyers and sellers to hang back. Ian
Strafford-Taylor, chief executive of currency exchange firm FairFX, says: ‘This reluctance to commit is likely to continue because of the uncertainty around the bureaucratic hoops buyers may need to jump through and poor exchange rates.
‘Consequently, those looking for retirement properties or investment properties in Europe may now look further afield or abandon the idea altogether until the impact becomes clearer.’
At €1.23 to the pound, compared with €1.30 on the eve of the poll, someone planning to buy a €200,000 property would now have their property pot smashed by about €10,000.
Spain is the most popular country in Europe for British property owners, but John May, director and cofounder of Sell4LessSpain, believes that the Brexit vote will have a major impact.
He says: ‘British property owners in Spain will now be worried about their investment and whether they will be able to sell in the short to medium term. We expect prices to fall across the board.’
Others are more optimistic. Simon Conn, who runs a business of the same name finding mortgages for overseas properties, says: ‘I don’t see this as a long-term problem. Sellers need to sit tight and give it all six to nine months to settle. Existing property owners will not be kicked out of their home.’ Jason Porter, director of Blevins Franks, which provides financial advice to Britons who are living overseas, is also taking the long view. He says: ‘The decision to leave the EU does not affect residency status, nor the current healthcare benefits on offer to expatriates living in Europe – certainly not until an exit process has been finalised.
‘This will take several years to work out and we anticipate that new bilateral and multilateral agreements will maintain the current benefits of EU membership.’