British demand for property in Spain has held up surprisingly well since the Brexit referendum in 2016, but real Brexit only kicked in at the start of this year, so the effect might have been delayed.
Brexit didn’t really start to bite until the start of this year when the transition period came to an end, so you could argue it has been a bit like a phony war until now, with little visible impact.
That might now be all changing with the start of real Brexit, though it is difficult to find data to prove this. I have heard reports of thousands of Britons moving back to the UK in the first quarter of this year driven out by Brexit, but I haven’t seen any figures to quantify it.
And now that the British are barred from spending more than 90 days in any 180 day period in the Schengen area, will this significantly drag down British demand for a second home in Spain? We will have to wait a month or more to find out.
My hypothesis is that British demand will take a hit from real Brexit this year, but I’m not that confident about my own predictions, having been confounded by Brexit so far. I expected a bigger, sustained fall after the referendum, and I was stunned by how well British demand recovered after the Spring lockdown of 2020, as you can see from the chart above. Through Brexit and Covid the British have kept buying homes in Spain, and remain by far the biggest foreign market.
With the British vaccine success story boosting confidence, talk of a slingshot economic recovery, and the Pound close to 12-month highs, there are reasons to think that 2021 might not be too bad, so I could be wrong (again) about the demise of British demand. It will largely depend on the impact of real Brexit, and whether the 90/180 rule is a big obstacle or not.
The Association of Spanish Land Registrars will publish the numbers for foreign demand for Q1 in the next month or two, and then we will finally be able to see the impact of real Brexit, assuming Covid-19 doesn’t distort the picture too much. For now, here is what British demand looked like up until the end of the phony Brexit period.