The outcome of the EU referendum:
On June 23rd the question of “Should England leave the EU?” was answered. The EU referendum date will be remembered for years to come. The result of the UK EU referendum continues to send shockwaves throughout Europe and the rest of the world.
Spain hosts the largest number of ex-pats from the UK, with around 319,000 permanent residents and in excess of 800,000 owning properties or with some form of fixed interest in the country.
The pound exchange rate:
There is obvious and understandable concern amongst the ex-pat communities throughout Spain. Many UK citizens have retired to Spain and may have been resident for many years.
The most immediate impact appears to have been that of the GBP/Euro exchange rate. At one point the British Pound had lost approximately 10% on the markets in the aftermath of the referendum result.
At time of writing the Pound was worth around €1.20. This is significantly less than for large periods in recent years. Clearly this has an effect on peoples spending power in Spain.
When will the UK leave the EU?
The finalisation of Brexit is likely to be a long process and may well take 2 years. There is an estimated 80,000 pages of EU documentation to be reviewed.
What will happen as the UK exits the EU?
During this period, the UK will seek to negotiate new agreements with multiple countries. These agreements with include trade, movement of goods, labour etc.. Subjects that will directly affect ex-pats, such as cross border healthcare and pensions, will also form part of the negotiations.
Will the UK join EEA member states?
Is it possible that the UK may become part of the European Economic Area (EEA). This agreement broadly covers the 4 freedoms; movement of goods, services, capital and people.
The EEA comprises the EU member states and Norway, Iceland and Liechtenstein.
The EEA offers access to the single market and as such all-relevant EU legalisation applies. The
EEA would give the UK the opportunity to continue to benefit from trade within the EU.
The EEA process:
However, membership of the EEA would not give the UK access to the 50 Free Trade Agreements that the EU has with other countries.
What is clear is that negotiations will take considerable time and the UK may not benefit from terms and conditions that were enjoyed during EU membership.
What will this mean for British Expats?
As of now, there is no change to the status of ex-pats in Spain. They will continue to receive pensions, access to healthcare and, of course, the Mediterranean lifestyle.
The possibility to purchase property in Spain also remains. The housing market has significantly strengthened over the past 18 months. The property prices seem to have bottomed out and are now stabilised.
There will be no restrictions on UK citizens purchasing property.
It is widely expected that agreements between the UK and Spain will be a focus and priority, in view of the number of ex-pats residing in the country and the vast number of UK tourists who visit each year.
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