What are you doing on the 23rd June?
Whatever you’re going to vote in the EU referendum on the 23rd June, that’s if you’re allowed to, one way or another it’s going to affect the property market here in Tenerife and Spain as a whole.
There’s plenty of information on the internet and papers in the UK about the Brexit referendum, with MPs and TV commentators giving their own views and opinions on the subject and I’m certain that there’s a good amount of hype from both camps.
So, because of the amount of information streaming into your lives about whether the UK should or shouldn’t, I’m not going to go into the pros and cons of staying or leaving Europe but whatever the final decision about Brexit, it’s undoubtedly going to have an effect on the Spanish property market and the Sterling / Euro exchange rate.
To be honest, I don’t watch any UK TV and although there could be a massive impact on the Spanish economy if an exit was agreed, the Brexit or “Bremain” (as the stay option has been called) has had very little impact regarding the Spanish news agencies here. They don’t talk about the Brexit much here in Spain – Spain has its own problems at the moment anyway, what with the indecision from the general election results from 20th December 2015 (yes 2015). The vote resulted in the most fragmented parliament in history and there’s still no formal result for a political party to take full control of government. Actually, there’s news today that a new Spanish general election will take place again in the summer.
So, as I said, I’m well behind with the facts and figures of the Brexit and Bremain campaigns, so doing this article has made me research the information on the internet and it’s been quite an interesting morning for me.
Brits will lose access to healthcare and pensions.
One of the first things that we need to consider is how would long term or permanent residents be affected by an exit. Well, it turns out that a report by the UK cabinet office warns that expatriates would lose “…a range of specific rights to live, to work and to access pensions, healthcare and public services that are only guaranteed due to EU law” the report also says that “UK citizens’ resident abroad, among them those that have retired to Spain, would not be able to assume that these rights will be guaranteed.”
The property market here in Tenerife has a massive amount of British buyers and owners. Being part of the EU, as we are at the moment, makes it very easy for Brits to buy here, but if the UK exits the EU, it’ll almost certainly make things a little more difficult to buy here and if Spain decides not to guarantee the rights and benefits that are currently available this might put some buyers off moving here on a more permanent basis.
Again, if the UK pulls out, and that affects the rights of existing long term or permanent residents, this could make owners here want to go back to the UK for health or pension reasons and could put quite a few properties on the property market, flooding the market with properties. Flooding any market with product generally drives prices down…so could this generate a few cheap properties?
42% of Brits admit to having concerns about property purchase in Spain.
Recently at the A Place in The Sun exhibition, a few surveys were carried out and they reported that 42% of Brits have admitted to having concerns about their property purchase in Spain although 70% of respondents say that the impending vote on the Brexit hasn’t put the brakes on their decision to buy abroad.
If the decision was made that the UK should pull out, then maybe in the future, UK citizens would have to obtain a Visa to be allowed to go on holiday to Spain and they’d almost certainly need to get one to buy a property here but have a think about this for a minute. How many Russian, Ukrainian and Middle Eastern buyers have bought property all over Spain over the years? They all need to get that paperwork sorted out to buy a property here, so it’s certainly not going to be impossible, maybe just a little more difficult.
In the months leading up to the referendum, as there’s been so much indecision, Sterling has fallen against the euro and there’s been a bit of a hold off from some buyers waiting to see what the final outcome is going to be, as the fears of taxes, health rights and pensions concern them.
The final say…
Listen, there’s a whole load of difference between what people SAY will happen and the actual facts about what WILL happen if there’s an exit, so nobody is definitely going to know until the final results are announced, but in my opinion, for what it’s worth I don’t think there’ll be any difference at all, the result will be Bremain.
I’m not in the business of fortune telling but I think that the result will be that the UK will remain as it is. It’ll stay in the EU, Sterling will rise and buyers holding back on any purchases will start to come forward, property prices will start to rise a little more and the last 2 quarters of the property market will be very buoyant for sales of Tenerife property.
And let’s face it, even if the result was to exit, I can’t imagine that Spain will treat the many UK citizens in its country as poorly as things are being suggested in the press. If that were the case, they’d potentially scare off hundreds of thousands back to the UK and potentially be badly affecting their own economy as well…I don’t think that’ll be the way the Spanish would deal with a Brexit.