British demand for Spanish homes continued in Q1 2022
British buyers have brushed off Brexit and the coronavirus pandemic to pile into the Spanish property market in numbers hardly seen since the Brexit referendum.
2,603 Spanish home sales involved a British buyer in the first quarter of the year, according to the latest figures from the Spanish land registrars’ association. Quarterly sales are presented in the chart above, with the blue columns showing sales, and the black line/area showing the year-on-year change (right axis).
As a result, British demand was up 72% compared to last year, and 20% compared to the pre-pandemic year of 2019, and almost on a par with the previous post-referendum high of 2,613 purchases in Q3 2018.
In Q1 the British market was once again the single biggest source of foreign buyers by a significant margin, with the next biggest nationality – the Germans – more than 20% smaller than the UK.
But the British market share dropped a fraction to 12% as other markets grew faster in the first quarter, as you can see from the next two charts.
With the UK outside the Eurozone it’s useful to compare the strength of British demand with the Pound to Euro exchange rate, which partly determines British spending power in Spain. As you can see in the next chart, the exchange rate has been fairly stable since the Brexit referendum, trading in a narrow band between 1.10 and 1.20 since 2016, so the exchange rate has not had much impact on demand beyond providing stability that investors tend to like.
British demand according to the notaries
The Spanish notaries’ association also provides data on foreign demand for property for sale in Spain broken down by nationality, in this case half-yearly rather than quarterly, including data on the residency status of buyers (expat and non-resident), budgets, and where different nationalities buy in Spain. The latest figures they provide are for the second half of 2021.
In the next chart you can see that non-resident demand recovered strongly in 2021, but British expat demand was the highest on record, with 2,903 purchases in the period. That helps explain why British demand was almost the highest it has been since the Brexit referendum. The near record numbers are being driven by British expats buying in Spain.
In the next chart you can see how British budgets compare to other nationalities. British buyers spent an average of 1,887€/m2 on property in Spain, below the foreign average of 1,940€/m2 and a long way from the spending of Swedes, Danes and Germans above 2,700€/m2. The British buy the most property in Spain, but they tend to focus on cheaper areas like the South Costa Blanca and spend less than other northern-Europeans.
Finally, the British were the biggest group of foreign buyers of holiday-homes in 3 regions, and in the top-two groups in 7 regions. As expats they were number one in the Valencian Region, and top-two in 5 regions, as you can see from the maps below.
Why is British demand for property in Spain so strong?
Down in the Canary islands, where the first quarter is always the busiest time of the year for foreign buyers, Andy Ward, Director of Tenerife Estate Agents, reports that neither Brexit nor the pandemic has winded the UK market. “British demand is still very high and accounted for 43% of our sales – no other nationality even came close,” he says. “Brexit has had little to no impact on our profile of British buyers, many of whom are still working full-time and buying a long-term lifestyle investment they plan to use two or three times per year for one to three weeks at a time, so the 90/180 day rule doesn’t affect them. Higher up the age bracket retirees have options including the non-lucrative visa, which is fairly straightforward and easy to get, whilst those who can afford it are looking at the Spanish Golden Visa, which helps explain why demand has increased for properties costing 500,000€ or more.”
AIPP Members report strong British demand for Spain
Peter Robinson, Executive Chairman of the Association of International Property Professionals (AIPP)* speaks daily with multiple property agents around Spain, and believes that remote working in response to Covid-19 by British civil servants is a part of the story.
“British demand has been strong in Spain this first quarter, as reported by most members of AIPP,” he explains. “Long-held desires by older Brits to move to Spain have not been dented by Brexit or Covid. Younger digital nomads are also seeking somewhere with better quality of life to work remotely. The biggest story in the UK though, is probably the civil service union in a high-profile dispute with the government over the ‘rights’ of nearly 500,000 civil servants to work remotely outside of the UK, many in Spain. The government is pushing back, however, so it remains to be seen whether Spain, and other countries, will continue to be happy recipients of this well-paid cadre”.
*The AIPP supports the The Alliance of International Property Owners (AIPO).
This article was originally published in Spanish Property Insight and has been republished with full permission – original article here.