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Brexit: Property in the EU. Real estate and finance in a crumbling EU

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Brexit - Part 4

Various questions have arisen concerning living in Europe should Britain exit the EU. How short are peopleís memories. Rather a lot of us have been living in Europe since the dawn of history. I have been living in Spain since the sixties. My neighbour has been living in France and Germany even longer. Britain wasnít in the EU then, and I certainly dont remember any problems. It really isnít going to make much difference. The only difference I have noticed is Schengen, and even that didnít make much difference to us going to France and Belgium. Maybe there will be some difference if you are reliant on health care abroad, but that can be handled better by insurance.

This all does call into question the way one should be thinking about buying a home abroad. What are the problems? Please note these problems dont necessarily have anything to do with Brexit.

The first problem is a very simple one. Most people decide to move or retire to somewhere after theyíve visited a few times and liked the place. Sounds reasonable. And so it is, except that has nothing to do with buying a house. The easy way to do things is to rent. There are several reasons for this.

Buying a house abroad usually means paying over the odds. The locals dont pay what you will be paying. I have lived in France, Spain, Portugal, and indeed owned properties in all those countries. Iíve also owned property in Bulgaria and Montenegro. You could say I have some experience of these matters.

If you buy in a tourist area you will pay tourist prices which could be anything up to ten times what the locals pay in non tourist zones. For instance, I used to live in the Algarve. I bought a six bedroom house set in 6 acres of land with a river running through. It certainly needed work modernsing it, but it cost me £83,000. People less than two miles away were paying two and three times that amount for two bedroomed apartments.

I was in the country rather than the town, but was only 1 kilometre from a motorway access road, and only 3 kilometres from the coast.

The first thing you check is the average wage in the area you want to buy in. The last thing you check is the prices in the estate agentís window. You then take a rain check.

If you want to retire you will find that as you get older you get health problems. You need to be near the hospital. You want to do less housework and less gardening. You also might like more money to spend. One partner may die and you suddenly feel a long way away from your kids and the grandchildren.

Letís go back to money. You will find UK house prices increase faster than the average tourist prices. You will also find that you can only sell to other tourists, which cuts down your market. You will also find that it is difficult to compete with other vendors, and also find that the market has very nasty downturns.

You will also find that owning a property is expensive. You will have to pay rates, water rates, and shell out for repairs, and general maintenance, plus insurance.

My friend pays only a small amount for rates, about Ä600 a year. However, all she gets for that is approximately two plastic bags of rubbish collected each week from a bin 1 kilometre away.

I live by the side of an estuary, on a 13 hectare estate with a landing stage at the bottom of the garden. I have to do housework, but no repairs, no maintenance, and no gardening. Thatís all done for me. I get all services, except the gas bottles. It costs me Ä400 a month for a 2 bed apartment. I secretly laugh at the folk who have bought properties, and at least half the people I know are struggling to sell them.

I kept a place in the UK which I rent out for five times the cost of my place in the south. I have a place to come back to if necessary. I also have a nice home in the sun. I have no worries, no maintenance, and no rates or insurance to pay, and a much better lifestyle because I have a nice income from the UK. And if I fancy leaving, all I have to do is give a monthís notice.

My advice is (and almost nobody listens to me) rent, dont buy.

The next problem about living abroad is speaking the language. By all means move to southern Italy. Before you go make sure you learn the language. They dont speak English down there. Go to France. Itís a great place, but they dont like it if you dont speak the language. If you move to Spain but keep speaking English you will have to live with the English abroad. Is that what you want? In Portugal, you need to speak Portuguese unless you move to the Algarve, where most people, whatever their nationality, speak English.

Staying in the EU wonít help you with any of this, and Brexit wonít stop you moving.

The next problem is currency movements. The Brits dont use the euro, and are not likely to in the foreseeable future, so there will be fluctuations in the value of your money. If you move out of the UK on a fixed pension, beware. You could be letting yourself in for a bumpy ride financially speaking. Make sure before you go that you are likely to be able to suffer some swings in the exchange rate.

When I first went to Portugal there were sixty escudos to the £. Forty years later there were 315. Imagine what that did to the value of a house you may have bought. It would need to appreciate 500% just to keep up with the currency conversion. When I went to Portugal the second time there were 155 euros to £100. Over the years that dropped right down to 110. Imagine what that did to people living on British pensions. Their living expenses went up by nearly 50% on top of inflation. Once again, none of this will be affected by Brexit.

Working abroad takes many forms. I used to have a neighbour in Spain who lived most of the week just outside Malaga, but he worked in London as a taxi driver. He caught a flight to Gatwick friday afternoon, and worked in London that night, taking a short kip in the back of the cab when he finished round about 4.00 am. Then he worked saturday and sunday right through till the early hours of monday morning, catching a 6.00 am plane back to Malaga.

Others specialise in giving an English service to English ex-pats. Others do learn the local language and get work in the normal way. The rest are pensioners, and increasingly people like me who, via the internet, can work pretty well anywhere there is a decent connection, and that includes Albania these days.

The next level is one of real integration. I canít see that changing much with Brexit either. So many European countries need the British tourist, and they certainly want them spending the winter months in the sun. It keeps the hotels open and people in employment. They most certainly need us snow-birds. In fact, the more I think about it, the more obvious it becomes that Europe needs the UK much more than the UK needs Europe. We are a large and relatively wealthy economic block ready to buy European goods and services. We have the rest of the world available, and the rest of the world has gotten a lot closer recently.

Ah yes, that reminds me. A couple of years ago I spent the winter in Central America. I rather liked Nicaragua. Some of you may remember some of the island properties I put up on the site. I floated around those island homes on Lake Nicaragua just off the charming city of Granada. Next winter I shall be going to Ecuador. Who needs the south of France?

On to Part Five >>>

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