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British property-buyers undeterred by the UK’s vote for Brexit will continue to benefit from cheap euro mortgages in Spain for the foreseeable future, Spainandproperty.co.uk has said, adding that buyers could also see prices along the Costas become more negotiable.
Messages from Spain’s leading banks indicate that lending criteria for UK clients will change only slightly if at all, with lenders keen to keep their doors open to Britons, who constitute a large percentage of their business. Meanwhile, the European Central Bank (ECB) has confirmed that interest rates in the Eurozone will remain low for a sustained period, enabling Spanish banks to pass on low rates to mortgage clients, including non-resident foreigners.
'Brexit is as much a threat to the recovery of Eurozone economies, including Spain, which on its own has a deficit with the UK, as it is to the UK,' says Julian Walker, director at Spainandproperty.co.uk. 'The chance of the ECB raising interest rates for some time is very slim. As such, mortgages are incredibly cheap at the moment, with British buyers typically getting fixed rates of three per cent on a repayment mortgage, with an LTV of 65 per cent.'
Aside from the Referendum result, the weaker pound alone could deter British buyers from committing to the purchase of a Spanish property. Looking closer though, after its knee-jerk drop in the days immediately after the Referendum, the exchange rate at the start of July remains more favourable than it was less than only three years ago.
'For most of summer 2013 the value of the pound didn’t rise above €1.18,' continues Walker. 'By comparison, today’s rate is better for British buyers. There are suggestions that the pound could strengthen in coming months, but of course no-one knows for sure.
For now, don’t be surprised to see vendors, in particular Britons, be more open to offers. The likelihood of fewer British buyers in the market will mean they will want to hang on to those that do show an interest in their property, and if they are repatriating the proceeds of their sale to the UK, the weaker pound means they may be more open to accepting a lower offer in euros.