There are concerns over the potential impact Brexit will have on British holiday lettings and tourism. The tourism industry depends on visitors occupying holiday lettings, eating at restaurants and paying to visit tourist attractions across Britain.
The latest statistics from VisitBritain revealed that there were 19.66 million visits from the UK from the EU in 2015. Additionally, it is estimated that visitors from the EU spend £8.2 billion during their stay- £62.7 million more than in 2014.
The United Kingdom has now entered a transition period, which is expected to last until 31st December 2020. All major EU regulations regarding British citizens will remain unchanged until this time. The British government will spend the next ten months negotiating the requirements of British citizens with each country in the EU. These negotiations are expected to culminate by January 2021.
Spain is one of the top holiday destinations for British tourists, with many emigrating to live there. However, the National Statistics Institute of Spain has discovered that the number of British nationals residing in Spain has decreased from 397,000 to 240,000 in the past five years. Despite this decline, British citizens are the principal property procurers in Spain.
There are presently no limitations for non-EU citizens who own property in Spain. Consequently, Brexit will not prevent people from buying or owning a property. Currently, EU citizens are charged 19% tax. At the same time, non-EU citizens are taxed 25%. Brexit could potentially result in British citizens facing a tax increase if they own property in Spain, which will also include holiday lettings. However, different countries have varying rules for non-EU citizens for renting out properties in Europe, so this will vary.
During the transition period, the British economy is predicted to fluctuate. As a result, British citizens may not be able to afford to travel abroad as in previous years. The Pound will be against the Euro, so those who do choose to go overseas could spend less than in past years. Therefore, British citizens may find it easier and cheaper to book a holiday in the UK, where there are no requirements to change currency.
The Times has discussed how Brexit is affecting tourism in the UK and abroad, and whether this is impacting people’s decisions on where to go on holiday. Overseas holiday bookings are approximately down 6% year-on-year. Visit England predicts this decline will continue after Brexit transitions end.
Since the referendum vote in 2016, there has been an upsurge in “staycations”, with holiday-makers travelling within the UK rather than overseas. However, bank-holiday “staycations” are expected to boost the British economy by £1.7 billion.
Thus, it is predicted that Brexit will cause a significant growth in the UK holiday letting market.
Another result of Brexit uncertainty may result in holiday homeowners choosing to buy a property in the UK, rather than in the EU. Following an increased demand for holiday lets, those who own a buy-to-let property are focussing on the holiday let industry instead.