Demand from Britons for holiday homes in Spain and Greece has fallen sharply as Brexit uncertainty and the fall in sterling drive house hunters away

Brits abroad? Not so many, it seems. Uncertainty about the future of Britain in Europe and the fall in the value of the pound are taking their toll on the number of UK buyers investing in a little place in the Mediterranean sun.

A report by Spain’s Association of Land and Commercial Registrars last week revealed British demand for second homes in Spain was down nearly 30% on last year’s pre-referendum levels.

In Greece, where property taxes have soared amid the debt-stricken economy and there are lingering fears that the country could yet be ejected from the eurozone, estate agents on some of the more popular Greek islands are reporting an even bigger plunge in the number of Britons looking for homes since the Brexit vote.

“If it’s not 90%, it’s certainly 80%,” says Manolis Mazaros who runs Alpha real estate, one of the oldest property companies in Agios Nicholaos, one of Crete’s most popular resort areas.

Facebook Twitter Pinterest Property for sale in Deia, Mallorca. Photograph: Alamy Stock Photo

Lured by sunshine and sea, about 300,000 British people have made their home in Spain, with more than 600,000 owning second homes, the majority on the costas.

In the wake of the 2008 global banking crisis and Spain’s property crash, sales of Spanish holiday homes to British buyers halved. But from 2012 until the Brexit vote, British purchases were rising on average by 20% per year. Now they have hit reverse again. Last week’s report showed sales to UK buyers for the first quarter of 2017 down from 2,800 last year to 2,000.

The main deterrent for those considering a place in the sun is the weakening pound, which is down 10% compared with the day of the referendum. A €300,000 villa in Murcia which would have cost a UK buyer £229,000 will now cost £254,000. In some areas, such as Barcelona where prices have risen by around 10% in the same period, buyers will be hit even harder.

Facebook Twitter Pinterest Chania harbour in Crete. Photograph: Alamy

Most of the second homes on Manolis Mazaros’s books in Crete are newly built villas with small swimming pools worth around €250,000, which will cost a British buyer £20,000 more than in June 2016. But the Brits are staying away from other types of property too.

“The fall in the value of the pound has really affected enquiries,” said Pelagia Papamaxiaki at Creta Houses in Aghia Galini, a small fishing village on Crete’s rural southern coast where more adventurous types have bought in recent years. “People are still calling in but Britons booking appointments has dropped by about 80%,” she said.

Greece, of course, has special problems: aside from the property taxes there are fears of Greece defaulting on its debts, staying in the eurozone and even returning to the drachma. So much so, says Mazaros, that while British buyers are staying away, British owners already in Crete are trying to move out. “About 50% of the English who have homes in this area want to sell them. It’s not just Greeks who can’t afford the taxes who now want to offload properties.”

Alfredo Millá of the Sonneil property agency that covers Alicante and Murcia in south-eastern Spain says the weak pound isn’t the only reason potential buyers are holding back either. “There’s a general air of uncertainty, especially about whether they will be entitled to healthcare,” he says.

Matt Oakley, of Murcia Golf Properties, said 70% of his clients were British and that he hadn’t had buyers pulling out of purchases, although he admitted other concerns. “A lot of people are seeing that their pensions won’t stretch as far as they did and some people who maybe wanted to buy a villa are now having to settle for an apartment.”

Prices are not going down in Murcia, he said, but that was partly due to a new influx of Belgian and Swedish buyers – the latter benefiting from a stronger krona. Elsewhere, more Romanians, Russians, Italian and French buyers are buying into the sangria and siesta lifestyle.

The hardest hit have been British cash buyers looking for a relatively modest sunshine bolthole. “The pound-euro exchange rate has a bigger effect on people at the lower end of the market, in the €200,000-€400,000 price range,” says Chris Clover, head of Panorama Properties in Marbella, southern Spain.

“Those with more money can take advantage of low interest rates to hedge against the weak pound.” Clover said his agency’s average sale price was €1.3m.

Mark Stucklin of Spanish Property Insight said “hot markets” such as Ibiza and Marbella – with a range of wealthy international holiday homebuyers – were still thriving.

Facebook Twitter Pinterest Spanish properties with swimming pool at La Herradura, near Almunécar, southern Spain. Photograph: Peter Titmuss/Alamy

The sharp decline in British buyers has not hit Mallorca either, mainly because Germans are the biggest purchasers on the island.

The same is true in Cyprus and Greece. Cyprus has bounced back from its 2013 economic crisis and €10bn IMF bailout. Andreas Tilley at Buy Sell Cyprus, one of the biggest property companies on the island, said: “We saw interest return in 2015 and in the last 45 days it’s been very busy.” Many buyers viewed Cyprus as a good investment, he said, because property prices had plummeted by as much as 35% but were now very much on the rebound.

Poppy Petsa at Corfu homes said there was little sign of British buyers walking away – if they did there were plenty of other potential suitors: “Prices have held and interest has held. Britons are still among the top buyers but Russians, Greek Americans and other Europeans are now also buying properties in a big way.”

Mark Stucklin, at Spanish Property Insight, says that in other holiday areas “the picture I get is one of stable or slightly falling prices”. The prices for ordinary Spanish housing, he says, was “rising much faster than prices for holiday homes and luxury villas”.

Spain is also benefiting from new buyers, including Chinese investors, and agents say there has been a new surge in demand recently from Turkish buyers. The big appeal to Turks concerned about the political climate at home is that since 2013 any non-EU national who buys a home worth more than €500,000 is automatically granted residency.

Alex Vaughan, of property agents Lucas Fox, says: “The Turkish clients we have are buying residential property in the range €500,000 to €1.5m, mainly in Barcelona city but we are seeing growing interest in Madrid and Valencia. So far this year sales to Turkish clients account for about 7.5% of our Barcelona business, so it is definitely the fastest-growing group by nationality.” Half of them, he says, are taking golden visas.