Brexit vote dents British demand for Spanish property

The number of homes in Spain sold to British buyers has slumped since the Brexit vote and the fall in the value of the pound.

Sales in the third quarter of this year declined 16% after steadily increasing since 2011. Last year the strong pound led British buyers to purchase almost 10,000 Spanish properties, up 42% on 2014, giving them a 21% share of the number of homes acquired by international buyers.

No other nationality buys as much property in Spain as the British, and in recent years they have made a significant contribution to the recovery of the Spanish property market.

About 28% of holiday homes on the Costa del Sol are sold to Britons and 26% on the Costa Blanca. They also dominate the sales of holiday homes in Murcia, the Canary Islands and the Balearics.

“We have carried out a survey of the sector and it appears that house purchases by Brits on the Costa del Sol and the Costa Blanca have fallen by around 50% since the referendum,” said Mark Stucklin, of the Second-Home and Resort Industry Observatory.

“At first it was the uncertainty after the Brexit vote, and then the fall in the pound,” said Catriona Hogan, marketing director at yourVIVA, a holiday homes estate agent on the Costa del Sol.

“About 40% of our clients are British and we’ve seen that drop to around 30%. There’s still a lot of interest but there’s a wait-and-see attitude as people are watching to see what happens with the pound. Things are picking up a little now.”

Stucklin pointed out that the market had always closely mirrored the fluctuation in the pound-to-euro exchange rate. The pound is currently down 18% compared with the end of 2015.

“When the pound fell below €1.20, from 2009-13, Britons bought fewer than 5,000 homes a year compared [with] nearly 10,000 in 2015,” he said.

“If the trend continues it will have a significant impact on the Costa Brava and Costa Blanca markets, among others.

“While demand from other countries such as Germany, Belgium, Sweden and France is growing, in the short term it’s not enough to make up for the lost British buyers.”