With the vote for Britain staying or leaving the EU now just weeks away – many people in the UK, with homes in Spain, are confused and frustrated. What will the impacts be on the Spanish property market if Britain leaves the EU? What will happen to the value of their Spanish home? There is much uncertainty and uncertainty always leads to a confused, and therefore stagnant market.
We asked John May, of Sell4LessSpain.com for his thoughts on how a Brexit may affect those with Spanish properties and whether now is a good time to sell:
It is expected, and widely reported, that if Britain decides to leave the EU, the Sterling will drop significantly in value against the Euro, meaning properties in Spain become more expensive for British purchasers to buy.
It is also expected that an exit from the EU will make it harder for British buyers to get mortgage finance for Spanish purchases. All this means that the supply of “ready” and more importantly “able” buyers may well dwindle – which would drive down prices as sellers compete to discount their properties to make them more attractive to the limited supply of buyers.
However, the real problem is uncertainty. What will happen is but a guess, although the one thing that is guaranteed is that British and other northern European citizens will always want and seek out a life under the Spanish sun, so long term, personally, I doubt there will be much change either way once the dust has settled.
At the moment the market is stagnant and therefore selling is slightly harder as there are fewer buyers – as everyone holds off until the referendum results are known. So if you do need to sell now then it’s important to reduce your fees as much as possible as the chances are you won’t get a premium for your property.
As a buyer, of course, this could be an opportunity to buy a property a little cheaper – however you run the risk of not knowing what the future may hold for your property and the money invested.
Traditional Spanish agents typically charge between 5 to 7% plus IVA for their services, meaning on a €200,000 sale at 5% the seller would have to hand over €10,000 plus IVA to the agent. Using an online agency can save you a lot of money and your property will be listed with all the major property portals.
If you can wait until after the referendum then, if the UK stays in, you may find your property is worth slightly more than it is now. On the other hand, it is a risk, as if we vote to leave then there will probably be a dip and you will get less for your property.
Either way, whenever you decide to sell look further afield than the local estate agent in the resort closest to your home – compare them to agencies like Sell4LessSpain. You will almost certainly be able to save considerably as there is no commission payable.