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Hmmm tricky one this.
I guess you need to break the typical UK buyer in Spain into two categories.
1) The UK buyer who has had enough of dear old blighty, wants to cash in his UK property and move lock, stock and two smoking barrels to Spain. In this case then the state of the UK property market has a direct influence on the price of property they may be looking to purchase in Spain. My guess is that these people are in a relative minority.
2) Second/Holiday home purchasers. For these people it is wether thay can aford to re-mortgage their existing property or take out a Spanish mortgage. In this case I guess the state of the UK market has some bearing on the Spansih market, but it is not the only influence. If there is no equity in the property then they can’t remortgage, but Spansih mortgages are supposed to be cheaper so this is less of a deterrent. The real issue is confidence, and talk of doom and gloom in the housing market has some influence together with fears over job prospects, future pension values etc.
I guess if people are gullible enough to STILL believe the agents speel about quick profits from reselling off plan or guaranteed rental returns then I guess they will not be too concerned about the state of the UK housing market