If Britain decides to leave the EU, what are the possible consequences for British property owners?
There are around 2.2 million British people living outside of the UK in the EU and an additional one million who own a holiday home in the EU. How would the Brexit affect this section of Britain’s population? According to research carried out by a Place in the Sun, 90% of British overseas property owners admit that they are not aware of the consequences, yet only 42% of those surveyed expressed concern.
Part of the problem, explains Tim Swannie, Director of Home Hunts, is that the effects of the Brexit on British people’s real estate assets in the EU is unclear. “There is much confusion as to the pros and cons of each camp (for and against the Brexit) at present,” he says. “I hope that both parties mount clear campaigns so the public can make informed decisions before the referendum in June.”
Will Britain really vote to leave the EU?
Tim does not believe that the British people will ultimately vote to leave the EU. “Independent polls in the UK back this up at present and David Cameron has already negotiated a very interesting deal to stay in the EU,” he says. “It is in both the UK’s and EU’s best interest to gain strength together.”
The UK’s current preference to stay is also echoed by the public across Europe. A survey of 8,000 people from Germany, France, Poland, Ireland, Spain and Sweden, as reported by The Week, found that a clear majority in every country thought that Britain should stay in the EU.
British buyers undeterred by Brexit
Whatever the outcome, aside from the effect on the exchange rates, the team at Home Hunts doesn’t believe that there will be a huge impact on those looking to relocate or buy property overseas. “If the UK choose to leave the EU, there will no doubt be a solution put in place for the freedom of movement within Europe,” says Tim.
It seems that the British people might agree. Further research from A Place in the Sun confirmed that a confident 70% said that Britain leaving the EU would not prevent or even postpone any future purchases.
With 75% of British people saying that they would choose to buy a property abroad for a better way of life – 70% citing warmer climates – British buyers are still enthusiastically searching for their dream properties and holiday homes in Europe.
“We haven’t seen any immediate impact on enquiries, viewings or sales,” says Tim. “In fact, last week was the best week in our history, since 2005,” he says. “We helped seven clients get offers accepted on properties with a combined property value of more than €27 million – and out of the seven buyers, three of them are British.”
Excellent market conditions for investment
Throughout 2015 and at the first quarter of 2016 the combination of low interest rates, favourable currency pairings and lower property prices throughout France has led to buyers negotiating deals that were not previously possible. This trend still continues, despite the value of the pound having been affected in recent weeks.
“The pound is down against the euro when compared to where it was twelve months ago, but it is still stronger than it was for the five years preceding that,” says Tim. “In terms of mortgages, interest rates are still at an all-time low with the banks, although this will not last forever.”
Lloyd Hughes of Athena Advisers told The Telegraph that British buyers with a less appealing profile might be charged higher interest rates. “But with British buyers forming such a crucial part of many overseas property markets, such as France, Spain and Portugal, banks would most likely not want to mess around with demand,” he explains.
Home Hunts to launch in Spain
No matter what the polls say, until 23 June it will remain uncertain which scenario British buyers will be dealing with. However, at present, enquiries for Home Hunts remain at an all-time high. If the UK votes to remain in the EU then it is predicted that the pound will surge in value, which will no doubt lead to more interest in French property from the UK.
Home Hunts is certainly not shying away from the EU and, on the contrary, is launching its luxury property search service in Spain in the coming two months. “We’re looking forward to a very positive year ahead,” says Tim.
To search for prime property in France, visit www.home-hunts.com. To speak to a Home Hunts consultant about the possible impact of the Brexit and your individual circumstances, call +33 (0)970 44 66 43.