This is a website for buyers, owners, and sellers of property in Spain, offering reliable information and resources to help you get things done with confidence. It is run by Mark Stücklin, author of the Spanish Property Doctor Column in The Sunday Times (2005-2008), and the book ‘Need to Know: Buying Property in Spain’ published by Collins.
British demand for property in Spain rose 12% last year to 10,178 purchases recorded in the Spanish Land Register, back above the pre-Brexit referendum record of 10,156 in 2016. Although British demand fell in 2017 after the referendum, it appears the British shrugged off Brexit fears last year and returned to Spain in record numbers.
The next two charts, showing British demand for Spanish property by quarter and the annualised change each quarter, illustrate how British buyers declined significantly in the two quarters immediately after the referendum took place, and by as much as -28% in the last quarter of 2016, but then started recovering to increase by double-digits in most quarters last year.
As a result of the recovery in British demand, the UK’s share of the foreign market for property in Spain has been steadily increasing from a low of 14% in Q1 2017 to 17% at the end of last year, though not yet back to the levels it was prior to the referendum, as foreign demand from other sources has also increased significantly since then.
More than any other factor, the weakness of Sterling compared to the Euro explains the decline in British demand in the months after the Brexit referendum. Once the Pound stabilised at a lower level British demand also stabilised and then began to grow again, though property professionals report that budgets at the lower end declined as many buyers simply adjusted expectations to match their lower purchasing power, rather than abandon their intention to buy in Spain altogether. At the high end of the market there has been little change in budgets, I’m told. People with money tend to be well diversified.
Feedback from my network of trusted estate agents in Spain provides more insight into British demand for Spanish property in 2018. “Although Brexit has had a massive negative effect on low and middle market sales, we are seeing more requests from buyers from the UK lately,” says Conor Wilde, head of Found Valencia, an agency specialising in quality homes in the Valencia City area. “There is absolutely no doubt that people from the UK still wish to buy a property in Valencia. We have a growing list of buyers from the UK who wish to complete on property once they have clear indication of what’s going to happen with Brexit. Over the past four months we have been consistently showing more property to British buyers. These British buyers in return will revisit Valencia once Brexit has settled. And since the news last week that the Spanish Government plans to safeguard the rights of British people living in Spain we have seen a dramatic increase in enquiries from the UK. But I feel it is still too early and that we will not see a large sales change until this Brexit fiasco is over.”
From North Mallorca, an area traditionally popular with upmarket British buyers, Gary Hobson, MD of Engel & Völkers North Mallorca gave me his thoughts. “We have had the same number of enquiries from Brits in general over the last few years, though the first two months of this year has seen a 50% drop in British enquiries. The British clients coming in, however, are very serious and they are still buying. As a result we have made a good number of sales to British buyers in recent months. I see the 50% drop in enquiries being from those nervous of Brexit and all the uncertainty it creates, whilst the other 50% are still going ahead with the pursuit of their dream of buying a home in Mallorca.”
Chris M says:
I am struggling with this, my trusted sources tell me that on the Costa del Sol the British buyer has all but disappeared in the last year, which confirms the comment that Brexit has had a massive negative effect on low and middle market sales. That yes Q 1 and Q2 of 2016 were lets say ‘good times again’ but yes there was some considerable drop off escalating through 2017 – 18 but that in no way could 2018 be seen as anything other than a disaster for British buyers, surely they couldn’t all be from the high end of the market. Were these registered sales then perhaps new build sales being deposits in 2016 and completions in 2018? Everyone I know is talking a bigger than 50% fall in both leads and sales to the British particularly last quarter of last year and now first quarter of this year. The most common phrase I hear about British buyers is that it is akin to 2007 – 2008 all over again, as though someone just flicked the light switch off. And yet the summary of this analysis is that the British are back buying at levels pre Brexit referendum… I can’t see it, but then maybe the figures from the notaries are going to show a catastrophic fall each quarter this year. It’s a funny market that’s for sure, there must be some explanation though, because I have trusted your analysis Mark more than any other this past 15 years or so.
Behrou G. says:
No shortage of Brits buying homes in our neck of the woods Chris, which is Costa Blanca North… then again, based both on anecdotal evidence and the article below, the Valencian Community seems to be firing on all cylinders:
https://www.larazon.es/economia/la-venta-de-viviendas-vuelve-a-niveles-previos-a-la-crisis-MF22278307
That’s the highest number of homes sales per capita and the highest purchase of homes by foreigner (both in net and per capita terms) out of the most populated communities! And if I remember correctly, another article mentioned that more than 50% of all sales in Spain in the luxury segment of the market are taking place in the Valencian Community.
Having said that, the number of geopolitical risk factors have been growing for quite some time (trade tensions, Brexit, slowdown in Germany, capital flight back to China, and perhaps most importantly the influence of Podemos in Spanish government policy). None of these factors increase risk appetite as far as investments go.
We have been planning to purchase an investment property since the summer and all plans are on hold until at least Brexit is sorted out and the April elections in Spain. It’s just too risky to make a move if prices can drop 5% in the next year.
Mark Stücklin says:
Chris I can’t explain the numbers because, amongst other failings, the source data doesn’t break down foreign sales by region or budget. Like you I’ve also heard comments from professionals on the Costa del Sol suggesting that British demand has been badly hit by Brexit, but these numbers show that there are British buyers out there. I’m not suspicious about these figures from the Registrars, I don’t think they are being falsified or made up, so I accept that they reflect the number of British acquisitions last year. But it is hard to square them with anecdotal reports from people in the business. I guess there is a chance that the breakdown by nationality, which is based on a sample rather than all sales in the period, is somehow way off, but that would affect all nationalities, not just the British share. Or perhaps, as Behrou suggests, British buyers have turned their backs on the Costa del Sol, which tends to be more expensive, and now head in greater numbers to places like the Costa Blanca and Murcia, where property is cheaper.
just maybe no longer looking at the Costa del Sol area, which tends to be more expensive than the Costa Blanca and Murcia