What effect will the EU Referendum talk have on you?
As you may well know, our partners at the Overseas Guides Company spend much of their time speaking to those looking to buy properties overseas, discussing their plans, the key pitfalls to avoid – and addressing any concerns. Through these conversations in recent weeks, a topic that has been a cause for concern and discussion has been the probable European Union (EU) Referendum in the UK, and whether this will affect their plans to move abroad.
We talked to the team there to discuss our collective thoughts on what kind of effect the ongoing discussions could have on you:
The idea of change is always worrying, and will always have an effect on the markets – as volatile as they are. But at the moment, while the decision of whether there will actually be a vote is not yet set in stone, and with no indication of what the result would be if this does go ahead, we believe that any worries are currently unfounded – especially in the short-term.
In our opinion, we believe that an ‘out’ vote is unlikely. The general sentiment right now is certainly towards staying in the EU and in favour of continuing the relationship and reciprocal agreements that are currently in place. Of course, there is a vocal minority who want to leave, but we have seen in recent times (for example, during last year’s Scotland Independence Referendum) how important it is to be able to cut through all the speculation, listen to the different opinions and focus in on the facts we already know, and the actual reality of the situation.
What do the experts think?
Right now, market experts believe that the possibility of Britain exiting the EU has not even been factored in to the markets – especially as both sides of the table have been clear in their belief that it would be better for the UK to remain part of the EU. Prime Minister David Cameron has been vocal about his plans to negotiate a deal that helps this happen, and both Jean-Claude Juncker, European Commission President, and Donald Tusk, European Council President, have stated that it is their intention to address the idea of the UK staying in the fold.
We saw back in May that opinion polls may not always be relied upon for an accurate prediction in the run up to the event, but certainly at the moment, polls that have been released suggest we will remain in the EU.
What could happen if we do leave the EU?
While we firmly believe that the UK leaving the EU is unlikely, of course we understand that it’s important to look at what could happen if this is the case. In general, for our individual readers, we believe that life will be much the same. Purchasing a property a will still be possible and without many differences – and given how much the regions that Brits buy in rely on this stream of income, we expect that overseas property ownership will still be encouraged. Expats already living in Europe should not see too much difference in their actual lifestyle abroad, and they would still enjoy all the usual benefits.
The UK and EU work so closely together, in terms of trading and movement, that it is almost guaranteed that some kind of agreement will be put into place between the UK Government and the EU. Of course, the format at the moment is currently unclear, but given the huge amount of trade, travel and market movement between the UK and the other countries in the EU, these are all likely to be covered. We would certainly expect the Government to negotiate protection and conditions for the British expats already living across the EU as part of any leaving agreement – as discussed, many European countries rely on the income from British expats and property buyers.
Why you should proceed as normal if you are already planning your overseas property
Property prices in many parts of the most popular locations in Europe are still at the lowest they have been for years – although beginning to rise again in some areas. The interest in overseas property from Brits has increased dramatically in the last year, meaning these prices are only likely to rise. Delaying plans to purchase overseas now because of unfounded worries about the UK leaving the EU may mean that you miss out on buying your dream home – especially considering the current strength of sterling! The current situation in Greece may even lead to lower prices in some regions, so it’s important to do your research and assess all your options.
Protecting against currency risk is more important now than ever
Of course, the strength of sterling may come into play nearer the time, as any uncertainty over the UK’s position is bound to affect the currency markets – and this will also have an effect on your ability to purchase abroad. To ensure you can always take advantage of the best currency rates, and discuss the implications for your personal situation, contact your trader.
It looks as though it will be around two years before any vote takes place – which is another reason why we are strongly advising our readers to carry on with their plans as normal. After all, a lot can happen in this time – and we are unlikely to see any developments until after the voting.
We will of course keep all our readers updated as the situation unfolds, and are continually assessing the implications for those moving or buying overseas – but we believe that worries at the present time are unfounded. We recommend keeping in touch with the Overseas Guides Company Resource Centre, as well as your Smart Currency exchange trader, to discuss the latest information and your own particular situation.