The British have voted to leave the EU, and though the vote is already causing a storm on the world stage, it will take time before British expats in Spain are directly affected beyond getting hit in the pocket by a weak pound (no small thing, of course).
I’ve been sent several questions by British expats in Spain worried they will soon lose their rights as EU citizens (in areas such as health care, pensions, and fiscal treatment) following the Brexit vote, so it’s worth pointing out that nothing will change in the next year or so, maybe longer. It could even be two or three years (who knows) before there is a material change in this regard. It’s even possible that, when the dust settles, there will be no meaningful change, and British expats in Europe will continue to enjoy the same rights as before – it all depends on negotiations that could take years to complete.
In the short-term, however, many British expats will be hit in the pocket by a weaker pound, down around 8% since the day before the vote. This could be a real problem for households on tight budgets, but exchange rates can change fast. It’s possible that in a few months time the markets take a rosier view of the UK’s prospects outside the EU. Pity the poor expats living in places like the US, where the pound is down more like 12% against the dollar.
Also in the short-term, the housing market might soften in markets like Alicante (Costa Blanca) and Malaga (Costa del Sol), where the British have dominated the market until now. That could be a challenge for people trying to sell up and go home, or second-home vendors, though a weaker pounds may give them some wiggle-room to lower prices in search of a buyer. I could be wrong about the softer market, and hope I am, but it’s obviously a possibility.
With the summer high-season starting, a weaker pound and economic worries at home brought on by Brexit might reduce rental demand from British holidaymakers, squeezing rental income for some second-home owners. But then again, maybe the British will abandon pricer hotels in favour of holiday-rentals, and flock to Spain in record numbers to get away from all the nonsense now playing out in the UK. These are the some of the scenarios I can imagine, but I don’t know what will happen.
But I don’t think people should worry too much about the impact in the short term, say over the next year or two. And there is always the chance that it all turns out much better than expected.
