With Brexit now one-year away – the divorce process is due to be completed in March 2019 – experts are considering the impact that this may have on the property market, both in the UK and for investors buying property overseas. This was highlighted in a recent survey, where 73% of property businesses expressed concern about the challenges of Brexit.
While speculation about the effect of Brexit has been ongoing, as we loom closer to the deadline, investors are naturally becoming more concerned. This has been evidenced through a reduction in Brits buying properties in Spain, accounting for just 14.5% of Spanish property purchases in 2016, compared to 38% in 2008. While figures have been declining steadily, this represents the lowest percentage since records began in 2006.
While these figures are less than encouraging – and despite Brits worrying about how far their pound will stretch after Brexit – there are still some good international property investments to be had.
If you are considering buying a holiday home overseas that will provide a good return post-Brexit, or else adding a solid investment to your international property portfolio, it is even more important to do your research.
Up and Coming Locations
If you are a seasoned investor with a large portfolio, then you may be able to take a calculated risk and invest in overseas property in a budding market. However, for first-time buyers, or someone looking for a holiday home with good rental yield, it is advisable to stay clear up-and-coming locations. Lacking the other investments to cover any short-comings and faced with meeting mortgage payments, this could have a real impact on your finances.
Remember Taxes
In the UK, if buying a property over the stamp duty threshold, you must pay the tax. Similarly, other countries have their own property taxes in place, so before making an investment, consider how this could affect your finances.
Furthermore, if you rent the property you will also have to pay estate agency fees and declare any rental income to HMRC.
Exchange Rates
The value of the pound dipped after Brexit was announced and has yet to fully recover. With the deadline approaching, the pound could fluctuate further. As such, any changes to the exchange rate could impact your ability to afford an overseas property investment, so bear this in mind.
Speak to an Expert
When buying overseas, especially for the first time, it is always advisable to speak to an expert. They can provide knowledge about the property market and offer guidance on your purchase – an invaluable source in a market you’re unfamiliar with.
To summarise, despite the possible implications of Brexit and how it may affect the pound, property will remain a popular investment choice. To ensure a good investment, stay up-to-date with the latest international property news.