Whether the final outcome in this incredibly complicated saga is a soft Brexit or a hard Brexit, what impact Brexit is having on the Portuguese market
At the time of writing, PM Theresa May had just won a vote of confidence within the Conservative party, but the much talked about Parliamentary vote on the controversial Brexit deal has yet to take place.
It is evident that the Government has been incapable of bargaining over the UK´s withdrawal as they are in a position of weakness – the interests of one country pitted against those of a union of 27. Aft er 30 months and multiple negotiations, instead of improving relationship with the EU, we have a withdrawal deal that looks unlikely to be passed by Parliament.
Whether the final outcome in this incredibly complicated saga is a soft Brexit or a hard Brexit, the question we are continuously being asked by property buyers and vendors alike is what impact Brexit is having on the Portuguese property market?
It is impossible to predict the future, but the biggest problem we are faced with is the uncertainty of it all.
Whatever the outcome, once it takes hold, confidence will grow as buyers and vendors can take decisions based on fact rather than speculation.
The effect on expats
There have been some voices of concern about expats living in Portugal suddenly being left adrift when the UK crashes out, and being made to return home.
While this isn’t impossible, it is extremely unlikely. Close relations between the two countries are older than the Magna Carta. In school, from an early age, Portuguese children learn that in the 12th century many of the crusaders who helped the country gain independence from Castile and Leon were English. The alliance between the two countries was formalised in 1386 in the Treaty of Windsor and reaffirmed in 1661. The alliance is still valid today and is commonly considered the oldest in the world.
There are approximately 200,000 Portuguese nationals living in the UK and roughly 50,000 British living in Portugal, and whilst being an old friend doesn’t necessarily guarantee co-operation in light of a hard Brexit, common sense should dictate that reciprocated agreements can be implemented quickly and smoothly.
There are additional steps that can be taken in order to protect expats in light of Brexit and there are numerous companies able to offer good advice on the various options. Blevins Franks (blevinsfranks.com) is one of them.
It is important to point out that many British happily own homes and second residences in numerous nonEU countries including Barbados, Jamaica, South Africa, Switzerland, Turkey, and the USA.
In terms of the effect that Brexit will have on the property market in the immediate aftermath, demand may be slightly subdued in some areas in the short-term, but this will simply offer opportunity to buy. With fewer buyers around, there’s less competition and more scope to negotiate on price.
Whilst the complexities and uncertainties surrounding Brexit are perceived as the main issue to tackle for the expat community when deciding to buy or sell a Portuguese property, the currencies are playing a far more important role in the equation than many people believe.
Currency fluctuations are nothing new – by definition they go up and down. Holding out to buy or sell a property when the exchange rate is in your favour isn’t an exact science.
While Brexit has undoubtedly weakened the pound, property prices outside the non-exclusive resorts in the Algarve still remain good value compared to other popular holiday destinations within Europe.
The pull of the Algarve is still as strong as ever and those able to buy should be encouraged.
Even within the shadow of Brexit, 2018 has been another good year with a high volume of sales across all price ranges. Buying a good value new house or holiday home in the Algarve in 2019 will still be possible, but it is important that buyers do not pay over- inflated prices on property.
As a buyer, you should always seek the advice and expertise of a local and long-established real estate agent, otherwise you could be the one that pays well over market value for a property.
There have definitely been times when property choices were greater and prices were lower but if you are selective about the property agency you use and the opportunities that arise then there is nothing that should stop you enjoying owning your very own property in the sun.
On the flip side, British sellers of property are in the enviable position of being able to take advantage of the weakened sterling by taking back considerably more pounds back to the UK whether they have discounted their properties or not.