Should you be concerned about the "Brexit" British EU Referendum?

UPDATE: On Thursday 23rd June 2016, the British public (and Gibraltar) voted in the Referendum with a 52% majority to Leave the European Union.

The UK public will soon have an important decision to make:

“Should the United Kingdom remain a member of the European Union or leave the European Union?”

The British EU Referendum is being referred to in the British press by the portmanteau “Brexit”, a blend of “Britain” and “exit”.  

As the date of the referendum on the 23rd June 2016 draws closer, a Brexit is considered a real possibility for the first time in four decades, with the latest polls[1] neck and neck with 43% indicating they think Britain should stay, and 42% saying they should leave, with the remainder undecided.

So, the question is, as a homeowner in Spain who rents out his/her property, should YOU be concerned about the referendum even if you are not British?   And what effect would the possibility of a Brexit have on you and your rental property?

EUphoria 

Spain continues to be the top destination for UK residents visiting abroad, accounting for 12.2 million visits in 2014[2], a 5.4% increase from the previous year and account for one fifth of all visits abroad, which account for a €7.67 billion (£6.1 billion) total spending.

Top 10 countries visited by UK residents for at least one night, 2014

Source: International Passenger Survey (IPS) - Office for National Statistics

Data provided from Spain-Holiday.com also shows that the UK is a leading source of holiday rental booking enquiries, accounting for 18% of all booking enquiries in 2015. 

Spain-Holiday.com markets to holidaymakers across 13 different languages and as a result, attracts holiday rental booking enquiries from all countries, both inside Europe and outside.  European countries dominate the top 10 countries, with UK (18%), Spain (16.2%) and France (15.5%) accounting for nearly half of all enquiries.

Boom Bang-a-bang 

There is a lot of propaganda in the media about what might happen if the UK leaves the EU and reading it can be worrying, from a travel and tourism perspective but the truth is that no one knows what will happen.  There is no precedent for a sovereign member state leaving the European Union.

The two main hypothetical results of a Brexit and how they would affect you, a holiday rental homeowner are:

• Currency volatility.

In the case of an EU exit, the pound (GBP) could initially drop.  A weaker pound has a direct impact on spending power overseas, making the cost of holidaying or visiting abroad more expensive. 

However, in light of current global economic and political upsets, the current strength of the pound could be reversed

•  Higher fares and prices.

It is a real possibility that airfare and package holidays could rise in a domino effect and also that Britons risk losing consumer protection for flight cancellations as per EU regulations.

However, it is widely believed that prices for trips to Spain will remain competitive and that the British trend for overseas holidays will not be impacted although some immediate fluctuations in travel booking patterns and pricing may occur as the travel market reacts in the weeks following a Brexit. 

In the long term, travel and tourism patterns of the British is not expected to change dramatically and Spain is expected to remain a top destination even facing potential increased cost with additional taxes, fees and restrictions.

Making Your Mind Up 

It is impossible to predict with certainty what the impact will be on travel if the UK was to leave the EU.   Much would depend on whether the UK sought to remain in the European Economic Area and therefore continue to have access to the single market, or preferred to go it alone and negotiate bilateral agreements with the EU.

While Spain has long been a favoured holiday destination for Britons, this year its close proximity, apparent safety and the strength of the pound against the euro are making it more attractive than ever.

What we do know is that if Britain votes to leave, the minimum period it would take for that to happen is 2 years. Minimum. During that time, Britain will negotiate its withdrawal agreement.

Here are some of the potential models:

• The Norwegian model: Britain leaves the EU and joins the European Economic Area, giving it access to the single market, with the exception of some financial services, but freeing it from EU rules on agriculture, fisheries, justice and home affairs
• The Swiss model: Britain emulates Switzerland, which is not a member of the EU but negotiates trade treaties on a sector-by-sector basis
• The Turkish model: The UK could enter into a customs union with the EU, allowing access to the free market in manufactured goods but not financial services
• The UK could seek to negotiate a comprehensive Free Trade Agreement with the EU, similar to the Swiss model but with better access for financial services and more say over how rules and standards are implemented
• The UK could make a clean break with the EU, relying on its membership of the World Trade Organisation as a basis for trade
• A Free Trade Agreement which would not involve the UK accepting the supremacy of EU law, the jurisdiction of the European Court of Justice, the free movement of people or the requirement to pay significant amounts into the EU budget.

If you are British (or from Gibraltar) then have your say in the referendum by voting. If you are one of the 2.2 million overseas British citizens[3] can also vote if they have registered to vote in the UK in the past 15 years.

If you are not a British citizen but are concerned that British market may dry up, detrimentally impacting your rental income from your property, then take action now and make sure that you are not solely or heavily dependent on the British market.  

Spain-Holiday.com operates in 13 different languages and already has long established marketing campaigns across Europe which means that homeowners can expect to receive booking enquiries from anywhere in the world looking to rent out their property.  Established in 2002, Spain-Holiday.com continues to invest in people and technology to continue growth and expansion not only in Spain (16.2% of booking enquiries in 2015) but across the globe.

Is Britain facing its final Waterloo? 

I leave you on a light-hearted note regarding the British EU referendum with an answer to one of the many questions and concerns it has raised:

If the UK leaves the EU does that mean it would be barred from the Eurovision Song Contest?

Alasdair Rendall, president of the UK Eurovision fan club confirms:

“No, the UK would not be barred.  All participating countries must be a member of the European Broadcasting Union.  The EBU – which is totally independent of the EU – includes countries both inside and outside of the EU, and also includes countries such as Israel that are outside of Europe.”

A blessing or a curse, you decide!