Tag Archives: asia
Spanish property expert says Brexit will affect demand from British buyers
A weak pound, plus the uncertainty about what comes next following the UK's decision to leave the European Union, will undermine British demand for property in Spain, especially in the short term, it is suggested. This should be a concern as British demand has been growing strongly since 2013 and according to Mark Stucklin of Spanish Property Insight there could now be a reversal in that trend. He believes that this will have a negative impact on the markets where British demand is dominant, namely Alicante and Malaga, and to a lesser extent the Balearics, the Canaries, and Murcia. ‘Thanks to this Brexit vote, there will just be fewer British buyers about,’ he said. One reason is that British demand in Spain is driven by the strength of the pound. When the pound goes up against the euro, British acquisitions inscribed in the property registry rise with a delay of around two quarters. ‘Now we have a weak pound plus the dramatic situation of a Brexit, so falling sales in coming quarters are almost a given,’ Stucklin explained. He pointed out that it won’t be good for British vendors either. ‘They now have a smaller pool in which to find a buyer. Price expectations may have to adjust even further down,’ he added. He also expects fewer British people to move to Spain until the deal for exit is struck and that will take a minimum of two years. ‘British expats in Spain will now be in limbo until the new order is established. That could take years, and in that period I expect to see more British expats leaving than arriving,’ he pointed out. British owners of holiday homes in Spain with no plans to sell won’t be affected much for now. A much bigger worry for them is what will happen to the UK, or whatever is left of it when the dust settles. Figures from the registrar of Notaires confirm that British demand for property in Spain grew strongly last year on the back of a strong pound and attractive Spanish property prices. Buyers from the UK were the biggest group by a wide margin, making up 21% of the foreign market and increased the most by up by 42% last year. Indeed, in some regions like Alicante on the Costa Blanca and Malaga on the Costa del Sol, the British dominate the overseas buyer market. On the other hand for those who want to buy in Spain properties will be cheaper due to the Pound falling making currency exchange more favourable for changing into euros. However, those wishing to move permanently to Spain who are reliant on a British pension will get fewer euros for their money. Continue reading
Brexit has positives and negatives for UK home building
The decision to leave the European Union could adversely affect the construction of new homes as many workers are from other countries, it is suggested, but red tape will be reduced. It seems that overall Brexit has potentially mixed effects for the home building industry. One the one hand many workers are from other EU countries but builders would be free from red tape regarded as holding up construction. According to Brian Berry, chief executive of the Federation of Master Builders, the UK construction industry has been heavily reliant on migrant workers from Europe for decades. ‘It is now the Government’s responsibility to ensure that the free-flowing tap of migrant workers from Europe is not turned off. If ministers want to meet their house building and infrastructure objectives, they have to ensure the new system of immigration is responsive to the needs of industry,’ he said. He believes at the same time more must be put into training British people in the skills necessary for the construction industry and that should be done by investing in apprenticeship training. ‘We need to train more construction apprentices so we are not overly reliant on migrant workers from Europe or further afield. That’s why it’s so important the Government gets the funding framework right for apprenticeships,’ he explained. ‘When you consider that this whole policy area is currently in flux, and then you add Brexit into the mix, it’s no exaggeration to say that a few wrong moves by the government could result in the skills crisis becoming a skills catastrophe. It’s only through close collaboration between the government and industry that we’ll be able to overcome these challenges,’ he added. Jeremy Blackburn, head of policy at the Royal Institution of Chartered Surveyors (RICS) there are questions around the impact on access to a skilled workforce to meet the country’s construction and infrastructure needs. ‘We need reassurance that workforce migration will be addressed as a priority and it must not be allowed to impact on the attractiveness of the UK for investment, or as a place where major corporate and industrial occupiers want to do business,’ he said. However, John Elliott, managing director of Millwood Designer Homes, believes that Brexit could be good for the house building industry. ‘I am excited to get on with the New World and see the back of EU laws which have been detrimental to us for over 40 years,’ he said. ‘One of the UK’s biggest assets is our home grown housing market and this will now be much better off out of EU regulation. For many years, the EU Habitats Directive has had an unnecessary impact on house building,’ he explained. ‘The mere hint of great crested newts or slow worms on a site, which unlike in Northern Europe where they are rare and given special protection, are prolific in the South East of England can delay building for months as they have to be translocated… Continue reading
Residential mortgages unlikely to be affected in short term by Brexit vote
Home mortgages in the UK are unlikely to be affected immediately by the decision to leave the European Union, according to finance commentators. However, it could be good news for first time buyers if price growth slows and interest rates fall with some experts predicting that the Bank of England might reduce rates even further than the current historic 0.5%. In the short term, people’s attention will be on interest rates and what impact this will have on mortgage costs, according to the Council of Mortgage Lenders. ‘While markets are bound to react to the news, the question will be how long it takes for them to settle. We know the authorities will be mindful of this,’ said the CML spokesman. In the medium term, there will also be interest in the extent to which housing transactions are affected by economic uncertainty, and whether this will impact on house prices. The more quickly markets resettle, the lower the impact on the housing market is likely to be. However, any prolonged disturbance would inevitably impact the housing market. ‘For lenders, the treatment of customers and of mortgage applications will be business as usual. People who have received mortgage offers will not see them affected. People facing financial difficulty will continue to be treated constructively and positively,’ the CML spokesman explained. ‘Lenders remain open for business as usual. Mortgage pricing is unlikely to react instantly, although pricing may be affected in the foreseeable future because of the effect on lenders’ cost of funds arising from the perception of economic uncertainty. How long this lasts will depend on how quickly markets resettle,’ he added. Indeed, Mark Carney, governor of the Bank of England, quickly announced that any measures needed to support financial markets and the UK economy would come into play. These measures could include a cut in interest rates that could reduce home owners' monthly mortgage payments, a measure repeatedly taken during the financial crisis of 2008. James Roberts, chief economist at real estate firm Knight Frank, believes that an interest rate cut is on the cards. ‘We expect the Bank of England, seasoned by the experience of financial crisis, to respond quickly. An interest rate cut of 25 basis points is a strong possibility at the Monetary Policy Committee's July meeting, or perhaps earlier if required,’ he said. Continue reading
