The days of moving to Spain without much money ended with real Brexit at the start of 2021. You now need significant savings to get a visa to live in Spain, which is bound to hit the cheap end of the market in places like Alicante.
For the British, Spain used to be a place you could go to reduce your living costs, make your pension go further, and enjoy your retirement in the sun. House prices were, and still are, cheaper than the UK, so you could even buy a bargain in places like Torrevieja, if you could get together a bit of financing. This cheap and cheerful end of the market in the Costa Blanca and the Costa del Sol helps explain why the British have been the biggest group of foreign buyers in Spain for the last 20 years. With its excellent public health care, good climate, and easy access from the UK, Spain is an attractive retirement destination that was affordable to most.
That all changed at the start of this year with real Brexit, when free travel and residency rights in Europe ended. The main avenue to residency in Spain is now the non-lucrative residence visa that does not allow you to work in Spain, and to get it you must demonstrate almost €30,000 in savings or a minimum monthly income from funds of pension of more than €2,000, with more on top for dependents. The Spanish residency door is now close to many by this financial hurdle.
As a reader Steven wrote to me recently asking “Is the dream of moving to Spain for British pensioners now only for the rich with the necessity for the non lucrative visa?” He went on to explain. “I think a retired couple now need funds of 33,000€ per year for the first 12 months of the NLV, and 66,000€ when renewing for the following 2 years until they reach 5 years, and can get full residency. This will rule out a huge number of pensioners that can only dream of such an income, and will really hurt the cheap and cheerful end of the property market.”
I suspect he will be proved right when the Q1 sales figures are released in a couple of months. As you can see from the chart below, British demand held up surprisingly well after the referendum and until the end of last year, but that was when the residency door was still open to everyone. Now it is closed to many of the people who used to buy in the South Costa Blanca, and the cheaper end of the Costa del Sol, I think we will see the real impact of Brexit from now on. The 90/180 rule and Covid won’t help either.