Germans are buying more property in Spain than the British for the first time ever, according to the latest figures recently released by Spain’s Land Registry.
Traditionally, the British have always been the biggest foreign buyers of villas and apartments in Spain – but that is now starting to change as factors such as Brexit and the Covid pandemic combine to diminish demand.
During the third quarter of this year German buyers overtook the British for the first time since records began back in 2006, accounting for 10.4% of all property purchases.
So, is the UK’s long running love affair with Spain now really on its last legs? Not entirely, according to Nick Ball, spokesperson for Atlantico Homes – one of the leading estate agents in Lanzarote, a holiday hot spot in the Canary Islands that remains perennially popular with British buyers.
“Around one million British nationals still own a property in Spain, making them the largest group of foreign owners by some distance. And they still account for a sizeable if secondary market of current property purchasers. So, there is no question of the British vanishing from the Spanish property market altogether.
However, the level of demand from British buyers is certainly starting to dip across Spain as a whole. A trend which has been apparent ever since the EU withdrawal referendum back in 2016. And which has become even more pronounced since January 2020, when the UK officially left the European Union.
Since then, Brexit has resulted in a 25% increase in the amount of tax that British owners are required to pay on their property in Spain. And if they rent it out to holidaymakers they are no longer eligible to offset items such as insurance and mortgage interest against their tax bill.
In addition, there are now restrictions in place that limit the amount of time they can spend enjoying their place in the sun. As non-EU citizens can only remain within the Schengen Zone visa free for a maximum of 90 days in every 180 day period.
Covid has had an impact too. Travel restrictions have made it harder for owners to rent their properties out to tourists, making investment less attractive, whilst fewer visitors to Spain in general means fewer people dreaming about moving and buying property here.”