Home » Currency 101 » What are the risks of Brexit to property buyers?

These are exciting times for anyone looking to move abroad or buy a home abroad. Or indeed, move back to the UK.

When it comes to changing your pounds for that big transaction, they’re interesting times indeed!

So much is in the air at the moment and that uncertainty has meant only small currency movements over the past month.

That may change soon. We’re waiting for the big news on Brexit. A flavour of that perked up the pound last week, when rumours of a deal being close led to an almost two cent increase in the pound’s value.

We really do have to take that with a pinch of salt though. Remember, “nothing is agreed until everything is agreed” and it all has to get through Parliament.

We’ve heard suggestions from some clients that the pound may improve in value against the euro in the months ahead. Of course, it might, but we have all had flashbacks to the spring of 2016 when a Remain vote looked certain, and clients were saying the same. Many delayed, then had to abandon their dreams to buy abroad because of the pound’s collapse just weeks later.

We believe that the upside opportunity of a deal going ahead is likely to be small and the downside risk of no deal to be very, very bad.

There is good news coming from the negotiations, we just don’t believe that currency is necessarily it. See the article below for the good news, but please do take precautions in case the worst happens.

Why we believe Brexit poses little or no risk

At this year’s Your Overseas Home shows, the subject of Brexit came up many times in seminars and on the stands. As we approach Brexit, just 143 days away, we believe that many people are worrying unnecessarily. So we have analysed the likely impacts of either a Brexit deal or no deal for our clients, based on three key areas: right to buy property, right to residence, and access to health.

Right to buy property

Property ownership is not one of the EU’s four freedoms (goods, capital, work and services) and so your right to buy property within the EU will not be affected. That applies in whatever form Brexit happens, even with no deal.

Access to health

The UK health secretary has put a Bill before parliament that will fund a continued EHIC system and reciprocal healthcare in EU countries, even for those who move to the EU after Brexit. This will cover British retirees and “those with chronic conditions, disabilities or other long-term conditions that require on-going medical attention.” If there is no deal this may fall through. But in that case, 3.5 million EU citizens in the UK might not be covered either, which is not a situation that would be allowed to continue long, if at all.

Right to live there

Even with no deal, third country nationals such as Americans can visit and stay in EU countries for half the year without a visa. If EU citizens moving to the UK to work need a work visa, we might assume that this would be reciprocated. About the retired, nothing has yet been announced. However, as they will not be taking jobs from local people, a visa waiver system seems the most likely scenario. You may have to prove sufficient income to live, and have health insurance, but you already need this in many countries, such as Italy, even within the EU.

To sum up:

  • Buying a holiday home: no problem.
  • Working: you might need a visa.
  • Retiring: possibly a few forms to fill in.

Finally, with so many British people unnecessarily nervous about buying abroad, there could be benefits for those who are unfazed by the prospect of filling in a couple of extra forms. It’s time to make your move!

It’s never too early to speak to your Personal Trader about your plans or to get an update on the currency market. Speak to them today on 020 7898 0541.

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