Housing Update April 2017

UK Pound expected to fall against the Euro in coming weeks?

Looking back at my column 12 months ago, I began the opening sentence with "100 days to go until the European Referendum!"

Well, an awful lot has been said, but very little has happened since then. UK sterling has been weaker since the referendum and the property market here in Spain took a bit of a tumble in the autumn. Since then, there has been some fluctuating data not dissimilar to previous years.

As I write, we are waiting for the UK government to formally announce article 50 and Britain's divorce from the European Union will begin. In doing so, the currency markets will become jittery and almost all the financial commentators predict the UK pound will lose value against many other currencies. This will obviously affect the buying-power of UK house-hunters and result in another mini-slump in sales throughout the spring.

Under normal circumstances, British property agents operating in the Spanish market would be rather gloomy about things, but in reality that simply isn't the case. The anticipated slack in the market due to less British buyers is being taken up by a noticeably large increase in other northern European buyers, in particular, Dutch, German, Belgian and French clients.

But don't worry; British buyers will not be as disadvantaged as we might think. Yes, as mentioned above, the pound in their pocket is weaker against the Euro, but for many UK citizens, particularly in the Midlands and South of England, their local property markets are seeing large increase in house values. In some cases, those selling up to move to Spain are getting offers well above their perceived asking prices and this consequently fills some of the short-fall in their overall purchasing power.

In the meantime, the Spanish economy is well on the mend. Everywhere we look, there is evidence of that; more shops and bars than we've seen for a long time; new cars appearing on the streets; towns and cities bustling with people and of course, Spanish property buyers snapping up bargains.

From our personal point of view, the first quarter of 2017 has been surprisingly buoyant and we are confident we will see another successful year. As the first quarter results flow in from the many official statistics organisations, it is obvious that the Brexit doom predictions are not as grave or worrying as first thought.

Kenneth Whettall
Commercial Director
Fuente Alamo Real Estate/Murcia Coast & Country
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Tel 0034 968 598 173