Post Referendum Buyers Guide
After the shock referendum result, we have seen some volatility in the GBP / EUR exchange rate, and a slight weakening of the pound.
Purchase Tax – 8% on property purchases up to 400,000.00€, 9% on purchases from 400,000.01 to 700,000.00€, and 10% on purchases of 700,000.01€ and above.
HOWEVER, LET US LOOK AT THE FACTS...
Spanish property prices have reduced dramatically over the past 6 years and we are now looking at the lowest prices to buy in Spain during that time, on average we have seen prices fall around 50%. Therefore, what buyers may be “losing” on the exchange rate they are making up on the property price.
In July 2006 a typical 3 bed townhouse in Mojácar cost €300,000. Now, they are selling for €150,000. The rate then was around 1.44 so at €300,000 would have cost 208,000GBP Now, the rate is 1.20, the property would currently cost 125,000GBP Therefore, this property is 40% cheaper than 2006, INCLUDING THE DECREASE IN THE EXCHANGE RATE.
IT’S REALLY NOT THAT BAD...
Usually house insurance can be taken over from the previous owners’ insurance company, or renewed by a company of the purchasers choice.
Reasons to move to Spain...
...have not changed!
In particular, Almería has a great deal to offer:
- Cost of property and cost of living is a fraction of the price of the UK e.g. food, drinks, bills, travel etc. When it comes to eating out, a 3 course meal and a drink can cost as little as €10!
- Cheap flights and only 2 hours from UK
- Stress-free lifestyle
- The weather!
...and local Town Halls across Spain are reassuring British residents of their support and continued provision of services to the expat community.
Post Referendum Sellers Guide
After the shock referendum result, we have seen some volatility in the GBP / EUR exchange rate, and a weakening of the pound. This has led to a sharp reduction in potential buyers in Spain, and as a result, sellers will not see the same level of interest as they have in the past 12-24 months. This is due to the uncertainty of what lies ahead after the Brexit.
HOWEVER, LET US LOOK AT THE FACTS:
Over the past 2 years the rate has moved as follows:
Period of Average: 1.30
Period High: 1.43
Period Low: 1.16
As we are at one of the lowest rates in 2 years, now is a fantastic time to sell your euros and buy sterling. Sellers now have an opportunity to sell their property at a slightly lower price, to secure a sale, and be able to accept a lower offer, yet still receive the same amount of sterling.
If you are selling a property for €200,000, and are intending to send the funds back to the UK in sterling, you need to look at actual cash in your hand.
At the high point in the last 12 months you would have got back 139,860GBP; at the mid point 153,846GBP; and today (around 1.20) 166,666GBP.
This means sellers are getting back an additional 26,806GBP compared to November 2015.
With this in mind, in the current market, and to secure a sale, it would be advisable for sellers to consider accepting a lower offer, for example of up to €32,000 less, to STILL end up with the same amount of pounds in their pocket than the end of 2015 on a property price of €200,000.
To apply this to all properties, sellers can accept offers of 16% less to receive the same amount of pounds.