RSS
Print This Post Print This Post

Patricia Tan – Perspectives – International REAL Estate

Patricia Tan

What Does BREXIT Mean To Our Real Estate Market?

By Patricia Tan

I was born and raised in England and watched with interest as the United Kingdom decided its future – whether to remain in the European Union or leave and become autonomous again. While it was a very close vote, the majority of the British people did vote to exit the E.U. The exact details of BREXIT will be negotiated over the next two years, and its full impact will not be known for some time.

Many readers know that I make several trips each year to the United Kingdom, where I exhibit at international property shows and speak at seminars about buying real estate in Florida. As a result of these marketing efforts, I have helped many British citizens buy and sell homes here. In the weeks since the BREXIT vote I have had an opportunity to talk with many of our British customers and gauge their reaction as to how exiting the E.U. may impact their investment in Florida real estate.

Many British citizens purchase homes in Florida to enjoy during their vacations or retirement years. These buyers are still very active in the market. Some told me when they re-examined their plans in light of BREXIT, they asked themselves the question: “If not now, when?”. They still have a desire, or some would say a need, to enjoy a home in the sun, and many have decided to proceed with their plans to buy a home here in Florida.

The biggest concern for these so-called lifestyle buyers is the fall in the value of Sterling against the U.S. Dollar. The Pound is currently trading around 10% less than it was pre-BREXIT. This has caused some buyers to reduce their US$ budgets and look for lower priced homes.

Finding a value-priced home in a rising market can be a challenge. It may mean they buy a home that needs some updates, and many British buyers are prepared to put in renovation effort themselves – a very common approach when they buy property in their home country.

A value-priced home could be a home currently owned by a British citizen. British owners who purchased homes when the Pound was strong, and Florida home prices were low, stand to realize big gains if they sell their property now – not only from price appreciation, but also from the decline in Sterling. The weaker the Pound, the more money the seller makes when he repatriates funds back to England. Such sellers will be keen to secure a buyer while the Pound is weak and they may be open to accepting a lower offer on their property. A British buyer and a British seller can also agree that a property is paid for in Pounds rather than in U.S. Dollars, saving both parties bank fees in connection with currency exchange transactions.

To get more house for their money, British buyers may also be willing to compromise on location of the property. They may choose to buy the same size/quality home they had planned to, but perhaps the home is located a little further from the beach.

We are seeing that some buyers, even if they have cash available now, look to finance their purchases as a way to minimize the impact of a weaker Pound. They can put down a deposit of 30-35% and finance the remainder through an American mortgage. Once the Pound/Dollar exchange rate improves, buyers can repay the mortgage without penalty. This allows them to enjoy their place in the sun now, but minimizes the impact of a weaker Sterling.

Yes, we are seeing some British lifestyle buyers respond to BREXIT by reducing the price they are willing or able to pay for a home here, but they are still in the market.

It’s a different story however, for British investors. These are buyers of rental investment properties that they typically rent unfurnished on long leases. While these investors still like the high rental incomes they can achieve, they are concerned about their exit strategy and the need to repatriate funds to U.K. at what may be a much less favorable exchange rate when the time comes. The investor’s return from a rental property here has also been impacted by a recent change in U.K. tax regulations. Investors can no longer write-off mortgage interest on investment properties, further reducing rates of return.

There is, however, a school of thought that says BREXIT may actually increase the number of British citizens who buy homes in Florida. France, Spain and Portugal have long been favorite destinations for British retirees. Owning a home in another E.U. country, instead of Florida, has several advantages while U.K. remains a member of the E.U. British homeowners continue to benefit from free healthcare services while they are in their European homes, and they are afforded elements of fair property rights and tax treatment by governments in other E.U. countries. These benefits may no longer apply after BREXIT. This may “even the playing field” somewhat, and make Florida a more attractive location for Brits wishing to own homes here.

Now, if only we could offer British buyers full time residence here through a retirement visa and immigration reform, and if the Dollar would weaken, and Sterling would strengthen . . . . .

patricia-tanPatricia Tan was born in England, and her career in international sales and marketing led her to live and work in many countries around the world before moving to Sarasota in 1997. Patricia is a Certified International Property Specialist (CIPS), Graduate Realtor Institute (GRI), and Transnational Referral Certified (TRC). She is involved in global activities of the Sarasota, Florida and National Association of Realtors, and currently serves as NAR President’s Liaison to U.K. Her real estate business operates from Coldwell Banker on St Armands Key, where her focus is to bring international buyers to the local market. She regularly makes marketing trips to Canada, Asia and Europe, to promote Florida’s Gulf Coast and the Sarasota area in particular. Patricia may be reached at 941-504-9232 or Pat@PatriciaTan.com.

Copyright © 2016 REAL Exclusive Magazine www.getrealexclusive.com
Links to this article are encouraged

Share

Tags: ,

Leave a Reply


Featured Properties

Ads

REAL HAPPENINGS

February 15, 2018 Thunder By The Bay Kick Off Party

February 15, 2018 Thunder By The Bay Kick Off Party

Born To Be Wild Kick Off Party. Enjoy a fun filled evening at the Thunder Saloon. February 15th, [...]
The Sarasota New Years Eve Party

The Sarasota New Years Eve Party

The Sarasota New Years Eve Party Sunday, December 31st, 2017 9:00pm - 1:00am Sarasota Municipal A[...]
Wishing All A Happy Holiday Season

Wishing All A Happy Holiday Season

REAL Exclusive Magazine Wishes Everyone A Very Happy Holiday Season. It is time to share and spen[...]
Vincent Academy Receives $250k Grant

Vincent Academy Receives $250k Grant

The Able Trust Presents $250K Grant to Vincent Academy. The Able Trust presented a $250,000 strat[...]
December 7, 1941 Day Of Infamy

December 7, 1941 Day Of Infamy

Remember Pearl Harbor. The Day of Infamy that launched the epic conflict with Japan took place at[...]
8128 Midnight Pass Road Siesta Key 34242

8128 Midnight Pass Road Siesta Key 34242

8128 Midnight Pass Road, Sarasota, FL 34242. Casa de los Arboles - An enchanting estate on the so[...]
6235 Yellow Wood Place Secluded Oaks Sarasota

6235 Yellow Wood Place Secluded Oaks Sarasota

JUST REDUCED! 6235 Yellow Wood Place Secluded Oaks. REDUCTIONS TOTAL $29,000+ NOW $ 399,800. Quiet [...]
November 23, 2017 Some Thanksgiving Fun

November 23, 2017 Some Thanksgiving Fun

The Directions Say To Have The Bird Chill In The Sink For A Few Hours... Happy Thanksgiving[...]
November 23, 2017 Happy Thanksgiving

November 23, 2017 Happy Thanksgiving

Gather With Friends And Loved Ones To Give Thanks For Life's Blessings. The Pilgrims made seven t[...]
Dolphin Tower Reconstruction Wins Award Of Excellence

Dolphin Tower Reconstruction Wins Award Of Excellence

Post Tensioning Institute (PTI) Bestows Award Upon Dolphin Tower For Reconstruction Efforts. At [...]
Norton Hammersley Lopez & Skokos Adds Attorneys

Norton Hammersley Lopez & Skokos Adds Attorneys

Chris Fowler and Alexandra Salerno Glauser Join Norton Hammersley. Norton, Hammersley, Lopez &[...]
Edward Bertha Sr. - Korean War Veteran

Edward Bertha Sr. - Korean War Veteran

Thank You Dad For Your Service. Edward Bertha Sr. entered the Korean War as a youngster in his ve[...]
November 11, 2017 Veterans Day

November 11, 2017 Veterans Day

Tomb Of The Unknowns And Veterans Day. Official, national ceremonies for Veterans Day center arou[...]
242nd Anniversary Of The United States Marines

242nd Anniversary Of The United States Marines

All Men Are Created Equal Then Some Become Marines. The official birthday of the United States Ma[...]
Thunder By The Bay Celebrates 20 Years

Thunder By The Bay Celebrates 20 Years

Thunder By The Bay Celebrates 20 Years By Returning To Sarasota. This year’s Thunder by the Bay m[...]
Attorneys from Icard Merrill Make Best Lawyers List

Attorneys from Icard Merrill Make Best Lawyers List

Attorneys from Icard Merrill Listed in The Best Lawyers in America 2018. Icard, Merrill, Cullis,[...]
October 31, 2017 Happy Halloween!

October 31, 2017 Happy Halloween!

A Little Halloween History. 2,000 years ago the Celts celebrated their new year on November 1st, [...]
Williams Parker's Erin Hope Christy Appointed President

Williams Parker's Erin Hope Christy Appointed President

Erin Hope Christy Appointed President Of The Young Lawyers Division. Williams Parker announced th[...]
Sheila Espinol Selected To 40 Under 40

Sheila Espinol Selected To 40 Under 40

Sheila Espinol Selected To Business Observer's 40 Under 40. The Business Observer has released it[...]
Country Club East Launches New Website

Country Club East Launches New Website

Lakewood Ranch's Country Club East Launches New Website. The new website for Country Club East is[...]
Translate »