Campbell Ferguson (OP Columnist)
BREXIT does not ‘technically’ happen until two years after Article 50 is triggered but immediate effects are undeniable.
What do we do now that the Referendum decision has selected Brexit?
Unless we are told otherwise, we have to assume that it will happen sooner rather than later. The markets have, with sterling falling (as I write, the pound has fallen to below €1.20 euro to the £.) and buyers withdrawing from pre-acquisition building surveys and contracts.
There may be 2+ years for negotiation, but that’s politics.
The real world economy keeps working 24 hours.
We may not like it, but we have to live with it and get on with life and work.
Properties being marketed will have to look to other markets, with that perhaps affecting the Costas long-term, though the number of Brits is unlikely to drop significantly for some time.
For valuers, this has been a seismic change and as yet there aren’t property sales that we can refer to for comparisons. We’ve added the following to our valuation reports –
The UK decision to leave the EU is likely to have a major reduction effect upon International property demand; immediately, with contracts with Brexit clauses being cancelled and lower pound/euro values effectively increasing prices; in the medium term as British potential buyers and especially lifestyle changers hesitate to commit themselves to the uncertainty of rumours and especially healthcare and pension doubts; and in the long-term it will depend upon the terms negotiated with the EU and worldwide.
In our valuations we depend upon comparison with other properties being sold and offered for sale.
Only after a few months will we have real market information due to this uncertainty. Accordingly, as we are currently having to depend upon pre-Brexit information, we will use our professional training, skill and experience to apply appropriate variations to values in locations where the perceived level of demand is dependent upon UK buyers.
In strong international areas, we do not expect there to be a significant reduction in values.
In areas where British owners and buyers dominate, undoubtedly there will be.
The second Spanish election has resulted in little effective change and so the international market is unlikely to be changed by it.
Undoubtedly, these are interesting times and there is still the possibility that it won’t happen at all!
This uncertainty may all be solved in a short time frame if Great Britain is willing to accept the proposal of the Spanish foreign minister, that he offered on June 24 to the UK: José Manuel Garcia Magallo had offered a joint administration by Spain and UK for Gibraltar. As soon as this becomes effective, the UK will benefit in three ways:
– UK may negotiate the complete Brexit without pressure of time and without loss of investor confidence
– via Gibraltar UK will stay inside the EU maketplace with free trade of all goods and services
– life of British expats in Spain will remain business as usual