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Keep calm and carry on, expats urged

British expats in Cyprus have been advised to keep calm and carry on following Thursday’s BREXIT vote that has left many of them fearful of what the future may hold once Britain leaves the EU.

Expats urged to keep calm and carry onBREXIT has left many British expats reeling. From Paphos to Paralimni, they wonder whether their pensions will stretch as far every month, whether their properties will drop in value or whether they’ll still be able to own a business in Cyprus now.

The experts can’t offer much assurance. All agree that there won’t be much immediate change. Much will stay the same until the British government begins negotiating the terms of its withdrawal from the EU, a complex process that will last for two years.

Until then, there will be many unknowns. That means the uncertainty in the lead-up to Thursday’s historic vote will continue for many months.

But the momentous outcome of that vote has already brought an immediate and unwelcome change for many British expats here – sterling hit a 31-year low, already hitting the buying power of those who rely on a UK pension to survive.

Fiona Parsley, the branch manager of Currency Solutions and head dealer in Paphos, was bombarded by calls from worried customers since 7.30am on Friday. All wanted to know what will happen to the exchange rate and how long will take to recover.

“Unfortunately we don’t know what will happen with the rate,” she told the Sunday Mail. “However, forecasters are saying that we should be back to where the pound should be standing within six months. We will get more of a definite feel of how things are on Monday morning.”

Some experts, such as Jennifer Petridou Sharpe, a property valuator at Filoktimatiki, say this may change the quality of life that some British expats have so far enjoyed: “This might not be the lifestyle they are used to. This change of quality of life might make some re-evaluate if they will stay.”

No-one, of course, is talking about a mass exodus of expats. But Sharpe said that with the current exchange rate, it may be more beneficial for British residents to sell their property and change the euros from the sale into pounds, which would be worth more when sterling rebounds.

Everything is irrevocably linked together, and property advisor Nigel Howarth believes at some point the currency will become stable again – although when is yet another unknown.

“These things are cyclical. The pound will come back,” he told the Sunday Mail.

How long it will take however and how long people can wait it out is another matter altogether.

In addition, Howarth says the cost of living in the UK must also be considered. “Cyprus isn’t as expensive as the UK. Property tax is small, compared to the local council tax paid in the UK.”

Essentially however, it comes down to this: Britain’s unprecedented exit from the EU means Britain has entered unchartered waters. “There’s too many unknowns. No one has been down this path before,” Howarth told the Sunday Mail.

Brexit, of course, also brings uncertainty for Cypriots who rely on the spending power of British expats. The British property market currently accounts for 35 per cent of non-Cypriot owned property on the island.

Still reeling from the shock of the news, the chairman of the real estate agents’ association, Marinos Kineyirou, said: “The way I see it, today’s developments are serious. This is something new and we can’t know if it’s good or bad.”

While an impact will be inevitable, changes have taken place in the property market over the years, Kineyirou said.

Primarily it will be interest from Britons in the Cypriot property market that will be affected, but recent years have seen Russian and the Middle Eastern buyers forming the majority of property buyers and this will limit exposure.

Sharpe said the terms of the Brexit negotiations will also play an important role. If for example, Britons will have to apply for a residency then they may purchase property to meet the conditions.

“The agreements between the UK and EU” will play a crucial role, as will any agreements made between Cyprus and the UK, Sharpe added.

Many expats are hoping that the long historical ties between the UK and Cyprus will ensure that the benefits their EU status brings in terms of property and business ownership, residency and access to healthcare can be renegotiated to remain essentially intact.  Commenting on the Brexit result on Friday, President Nicos Anastasiades focused on the “special relationship” between the two countries.

Howarth says although the British market has shrunk in the past few years “a lot of properties on the market at a competitive price wait a long time for buyers. For instance, a village home has been on the market for three years.”

According to property valuator Antonis Loizou, for the past couple of years “Brits have had a small share of the market, a maximum of 20 per cent of foreign demand in terms of value.”

Sharpe also raises the issue of competition. “Spain and Portugal may be cheaper options as they have over supply,” she says.  “In Cyprus, there is limited stock of land and with the basic rules of demand and supply, is possibly more expensive.”

She highlights the “positive note, that although there is significant interest in Cyprus (from the UK) it is not what it was 10-years-ago when the Brits held 60 to 70 per cent of the market.”

Now gone down to about half, Loizou added he was certain the consequences will be negative.

“To what extent however, will depend on the terms of the Brexit. Interest will cease for the next six months.”

“With what conditions will Britons stay in Cyprus? Will they be able to buy two homes or will they abide with non EU rules that say one property per person?”

Back in 2008 when the global financial crisis hit, the exchange rate had also suffered yet the circumstances surrounding it were entirely different.

“A bulk of them has already left. Whoever was going to sell, already did it,” Sharpe said.

“It’s not the same as 2008 / 2009.”

Effectively, the advice from the experts – for the time being, at least – can best be summed up by that hoary old slogan long designed to appeal to British pride in keeping a steady head in difficult times – Keep calm and carry on.

First reactions to BREXIT in Nicosia

First reactions to BREXIT in Paphos

Readers' comments

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  • Ivaninklin says:

    Hi Peter,
    not sure where you get your stats from but it would be great to see who Greenland sends all their exports to. Most of it is fish and goes to …Denmark.

  • Gary says:

    Heather, the 31 year low is a comparison against the Dollar and not the Euro. The Euro has not been around for 31 years. The Dollar is used as the benchmark as it, arguably, represents the strongest economy in the world.

  • Heather says:

    I am not sure where the “Sterling hit a 31 year low” comes from. When we arrived in 2010, the exchange rate was parity following the crash. It doesn’t seem to have been less than 1.20 since brexit!!

  • Terry Evans says:

    Hi There.
    Thanks for Your Excellent reporting on the subject.
    Mr T Evans. U.K and Cyprus.

  • Peter Davis says:

    @Iavn

    And Greenland’s export to the EU is 93%. Not bad for a country that left it. And Greenalnd still has its fishing fleet and all the cod is theirs.

    Our fish are landed somewhere in Spain, but not for much longer.

    Now if we had a leader who was competent and able he wouldn’t need a higher authority to guide his hand. We have that with Boris, so no further need for the EU to dictated what we can sell and to whom.

    As for Greenland being subsidised don’t we have Scotland?

  • Lesley says:

    This election was about the way of life in the U.K not Cyprus or any other country but the way of life in Great Britain. Many of us have places in all corners of the world. Cyprus have not been in the UK for long, Brits have lived there for years and years. No one seemed to worry about the Cypriot people when the EU stole money from the accounts of the Cypriot people a few years ago? That happened to no other country.

    For most of us who voted irrespective of our own personal circumstance it was for our children and our grandchildren. It was never about people who have chosen to live out of the country. So now we look better to a safer and secure future FOR the United Kingdom. Not led by the dictatorship in Brussels.

  • IvanInklin says:

    I cannot see the logic in including Greeenland as a shining example of exiting the EU. Peter says Greenland has gone from strength to strength, but I don’t know in what. I think Greenland still takes indirect annual handouts from the EU in the form of a subsidy from Denmark. Greenland is not totally independent from Denmark and has picked up a lot of money every year from them, I believe the last figure quoted was about $600 million a year, that’s a lot for such a tiny country! What size is the workforce of Greenland, about 30,000?

  • DaveC says:

    The most likely outcome of Brexit for the UK will be joining EFTA/EEA since this is the least risky option and offers the best compromise for both sides in the referendum. Such a move will most likely take 2-5 years to complete.

    By then we will be looking back and wondering what all the media hype and concern was all about.

    For example the article mentions the weakness of the £ as being at a 31 year low. In fact the most relevant comparison is against the euro where it was lower than today’s level in both 2014 & 2015 while in Dec. 2009 the £/euro rate fell as low as 1.08, more than 10% lower than it is today.

  • Peter Davis says:

    The first country to leave the EU was Greenland in 1985 as the EU wanted to take their fishing grounds. In contrast Britain handed it fishing grounds over to the Spanish. Greenland went from strength to strength, Britain in contrast was held back by EU regulations and poorer countries who joined for the money, OUR money. Why do we feel we need to buy friends?

    So what type of leader votes for a higher authority than him to impose regulations that he can’t make, and without it he is totally lost. Ho, than would be Cameron.

    Yes voted out, and mature enough that if the vote had swung the other way would have accepted it as a gracious loser. It appears the other side want to keep having referendums until they get the right answer. Would anyone join the EU today? Why has Switzerland just withdrawn its application? Another 5 years and the EU will be a memory and small children will be asking mum & dad why did you ever join something like that?

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