The impact of Brexit on the Spanish prime property market

Three and a half years ago, nearly 16 million Britons voted to stay in the European Union. However, on 31 January, the United Kingdom will leave, giving rise to a generation of many British subjects who, while not leaving their country, will live there dissatisfied and frustrated at the prospect of not being part of what is arguably the largest multicultural club in the world right now.

But what about those who can afford to flee this new, isolated Britain, choosing to settle in a country that does remain in the EU?

OECD data for 2018 showed a record 75,500 people leaving the UK to apply for passports and residence in an EU country, and the total figure for 2019 is expected to be at least 85,000. It has been years since we have seen such a diaspora of Brits to other countries.

Spain, a favourite destination

Due to its cost and quality of life, climate and services, Spain is one of the main destinations for this migratory wave. According to the Ministry of the Interior, at the end of 2019 there were just under 366,000 British citizens registered in our country, an increase of 10% over the 2018 figures and placing them in third position by nationality of foreigners in Spain.

For many of these UK nationals, buying a home has been the option they have chosen for, Golden Visa by, having a permanent foothold in Spain. This is made possible by prices that are still competitive in comparison with other European countries, combined with mortgage rates that range from 1.55% to variable rates of 1.15% below Euribor.

The places with the highest appeal for the British buyer are still Barcelona and Madrid. Although it led the change in market trend in 2014 and has not lost its international appeal, the Catalan capital has experienced, over the last twelve months, a slight slowdown in prices. In 2020 it will undoubtedly be the scene of operations by British investors seeking to capitalize on affordable prices in one of the world’s most ‘in’ cities. In the Catalan capital it is still possible, for 500,000 euros, to buy a recently renovated three-bedroom apartment in a building in the heart of the Eixample. Can anyone imagine an operation with a similar Budget in Paris or Berlin?

For their part, property prices in Madrid have already surpassed the 2007 peak by more than 6% (almost 27% in the exclusive Salamanca district), but, once again, the Spanish capital has extremely competitive prices compared to other European capitals, along with a large number of vibrant projects such as the opening of the new Four Seasons Hotel in Sol, or the large urban regeneration projects in Charmartín. Can you imagine buying a renovated historic apartment near Buckingham Palace for only half a million euros? In Madrid it is possible to do so in the luxurious Royal Palace area, and with a better climate!

Malaga and Alicante, the classics

Marbella and the Costa del Sol put Spain on the map for the first time for many Brits, seduced by the year-round sunshine, relaxed lifestyle and a touch of glamour. And while this area welcomed fewer British buyers in the years following the referendum, with the Brexit it is hoped that their romance will be revived to include the city of Malaga which, in the last decade, has experienced unprecedented change and growth in what was once a sleepy port town

The province of Alicante is the other great classic of the British presence in the Spanish census. Its low prices -although constantly growing-, the increase in sales operations and an unbeatable quality of life have made Alicante one of the key points for future foreign investment.

Beyond classics and metropolises

The interest of British buyers in the Spanish property market does not stop at its two classic destinations, Marbella and Alicante, and its two great metropolises, Madrid and Barcelona, but increasingly extends to other locations.

An example of this is Girona, which has experienced some of the biggest price rises in recent years, thanks, among other things, to its award-winning cuisine, its reputation as a cycling mecca and its proximity to the Costa Brava. Properties in its beautiful city centre are in high demand and hard to come by and, outside the city, the country houses are coveted by international buyers looking for a change of lifestyle or to start a rural business.

Mahon is another of those attractive Mediterranean towns that are attracting the interest of more and more defectors from the Brexit. It has the largest natural harbour in Europe and its architecture reflects the legacy of the British occupation during the 18th century. The cafeteria terraces take up almost all the available space, making the Menorcan capital an ideal place to enjoy a relaxed lifestyle. And, in terms of prices, we are talking about that for just 400,000 euros it is possible to acquire a three bedroom penthouse in the heart of the city, just a stone’s throw from the port and the beach.

Vigo, new British target

Vigo is the largest city in Galicia, the southernmost of the Rías Baixas, an area of four different river entrances on the Atlantic coast that share a rich marine life and one of the most beautiful landscapes in Spain. But no one would have imagined that this beautiful town, nestled between the sea and a rugged landscape, would capture the attention of British buyers – usually associated with sun and beach towns – attracted by the history and quality of life of this long underrated town, still with very interesting prices for the purchase of high standing properties.


Posted in Blog

Wednesday Jan 29 1:36 pm

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