June’s Brexit vote has left many Brits unsure has to whether or not they should pursue their dream of owning a second property abroad.
The uncertainty surrounding the UK’s economic future, a falling Pound, and the long-term political fall-out of the decision has undoubtedly made Brits think twice about investing in overseas property.
However, the Association of International Property Professionals (AIPP) believes that the British appetite for a foreign property remains as high as ever. They also believe that, if they get the timing right, there is every reason for British buyers to remain positive for the foreseeable future.
Here are ten reasons the AIPP give for British investors not to be put off buying a property abroad.
- It is likely to take two years or more for the UK to leave full EU membership under terms set out in Article 50 of the Lisbon Treaty.
- A full exit from the EU is unlikely with perhaps the Norwegian or Swiss model of EU access and free movement of people perhaps most likely (neither of these two countries are EU members).
- Figures show that 35,000 Brits are forecast to buy an overseas property this year; up from 30,000 last year.
- Brits have such deep-rooted passion to own property and to enjoy life outdoors with some sunshine, decent food and drink.
- While there is little doubt that the Pound is currently struggling against the Euro and Dollar, things will improve, possibly as soon as after the summer.
Currency rates are uncertain at present, but will improve
- The UK has the 2nd largest GDP in Europe after Germany, still with positive growth – even post Brexit. The UK has strong market fundamentals and British Property is expensive. It is much cheaper to buy a holiday or retirement property abroad.
- The UK has a massive baby-boomer generation wanting to retire and they are in a hurry to enjoy their ‘Autumn years’. Many of these people have no mortgage and good pension and savings. They are cash buyers. It is, perhaps, the younger potential holiday home buyer with less cash (with a UK mortgage, perhaps needing a 2nd mortgage on holiday home), who may take some time to consider their options into the autumn and quite possibly the new year
- Leaving the EU may make some Brits more confident about buying a home in the EU. Some Brits have been concerned about Southern European economies and the need for further bailouts. With the prospect of this being removed, confidence in spending British money in the softer Southern European economies (in particular) is returning.
- Online foreign property searches are not witnessing any significant fall-off with international property shows still looking very strong with exhibitors.
- The UK will quickly adapt to its ‘new reality’. However, the rest of Europe – particularly France, Germany (elections in 2017) and Netherlands must now address their own internal EU issues. This may will lead to market and buyer uncertainty.
Article published 1st August 2016