Pat Tan of Coldwell Banker specializes in the foreign real estate market. A native of Sunderland, England, who worked for many years in the London financial industry, she travels to England three times a year to conduct presentations on Florida real estate. She answered several questions from Herald-Tribune real estate editor Harold Bubil regarding the United Kingdom’s vote Thursday to exit the European Union.
Q. What is your reaction to the Brexit vote?
A. It was always going to be very close, but I expected it to go the other way. If I were still living in England, I would have voted to stay in the EU. But I can understand some of the frustrations that have caused people to want to exit.
Q. Foreign buyers made up about 12 percent of the Florida market in 2015 (down from 27 percent in 2010), with England among the leading countries for purchases in the Sarasota area, and No. 2 statewide after Canada, according to the National Association of Realtors. About 8 percent of the state's international purchases are in the Sarasota-area market. What impact might this have on British investment in Florida real estate?
A. The biggest potential impact is the currency exchange. The dollar has been very strong against the British pound for the past 12 to 18 months. For the last year or two, I have been nervous about the strength of the dollar, but we haven’t really seen it impact our business. I get face-to-face with a lot of prospective buyers there. Even though the pound is worth less than it was two or three years ago, they are still buying here because they have been saving their whole lives to buy that retirement home in the sun, and they are going to buy it anyway.
Also, the pension regulations in England are such that when you retire, you can take a lump sum out of your pension plan, and that is the money most people use to buy their retirement property.
Q. Many British retirees like to buy in France or Spain. Could the Brexit vote send more of them to Florida?
A. Who knows what is going to happen with the pound and the Euro right now? If Britain’s departure is seen to have a serious impact on the EU, the Euro may weaken a lot. It might make French and Spanish properties more attractive, price-wise, than the Florida market. It is hard to say. The next six months will be very telling.
But if we just look at the retirement market, a lot of British people buy retirement homes in France and Spain because they can stay there year-round. Once the U.K. is out of the EU, immigration won’t be so easy. So Florida will have more of an even playing field than we do right now in competing for retiree business.
Once they exit the EU, all of that reciprocity for health care and free movement of labor will stop. They are going to need visas and they are not going to be able to use their British health care in European countries.
Q. As a native Briton, how do you account for the geographic divide in the voting?
A. England has this north-south divide. The south of the country is seen to be more prosperous, and the north of the country is traditionally an industrial area and less-prosperous. That was reflected in the vote. Most people who live in the south can drive through the tunnel and get to Europe very quickly.