Brexit against Spain Real Estate Industry

By: Margarita Espinel Sanabria

The Spanish real estate industry was substantially affected by indecision and insecurity due

to changes in the British economy. Regarding the construction of real estate, the predictable

fall in the demand for housing due to the loss of confidence and all the limitations,

prohibitions, and conditions of foreign labor, are situations that affected this market and,

therefore, to all or most of the Spanish companies in the real estate industry that carry out

this work in Great Britain.

In 2016, about 50% of large real estate funds were temporarily held on by the fear that the

residential and office market was going to crash completely in the UK, there were intensive

requests from foreign investors to quit these development projects of investment

immediately. Some analysts believed that, with the difficulty of selling the properties, the

funds for the real estate industry were blocked for weeks or even months, because the main

aim was to generate liquidity and return the money to the investors as soon as possible.

Taking into account that Spain has been, due to its cost and quality of life, one of the

favorite destinations of British migration for many years, and that´s the reason for many

citizens of the United Kingdom purchases any residence or real estate because that has been

the best option they have chosen to have a permanent foothold in Spain, since the prices are

still competitive compared to other European countries.

Currently, post-Brexit uncertainty has already been fully assumed and, for this reason,

British demand climbed notably again, but it will never be the same again. Now, a survey

was conducted in January 2021 in which, compared to 2016, 10.2% of those surveyed
prefer Spain to invest in housing. Now, a survey was conducted in January 2021 in which,

compared to 2016, 10.2% of those surveyed prefer Spain to invest in housing. Which

means, that despite the obvious improvement 5 years later, the fall in the real estate

industry had a decline of 39.2% in contrast to what was before Brexit.

It will never be like before, but, it is expected that in the next 5 years there will be an

improvement of 15% more in investments, but well, both Spain and the United Kingdom

have strong relationships in terms of trade and population. More than enough reasons for

the two countries to sign agreements that reduce the consequences of the British exit from

the European Union, including the effects on real estate.

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