There was a school of thought that the lives of British citizens living in Spain would be unaffected by Brexit and to a certain extent this is the case, but those British citizens planning a new life in Spain in the post-Brexit era face a paperwork mountain.
Employment
Employers in Spain are now reluctant to employ British citizens because of the additional paperwork required by the Spanish authorities. Some businesses have replaced their British staff, who they recruit at the start of the season, with Irish citizens, because as Ireland is a member of the European Union, the paperwork issue is relatively simple. Gone are the days when thousands of young Britons would come to Spain to work the summer. One local businessman told me that these days you really have to want to employ a Briton because of the expense and paperwork. (NB The new working conditions apply to those people who are moving to Spain not those who lived here before the Brexit deadline).
Driving licences
Many British expats could have to re-take their driving test in Spain to secure a licence because the Spanish authorities no longer recognise British licences for resident Britons. To be honest, the Spanish authorities have introduced "grace periods" when the switch-over could take place, but many missed the deadline, leaving them being unable to drive legally in Spain. The British embassy is working on a deal with Spain which could involve a new "grace" period and a longer term agreement. (NB: the British driving licence ruling only apply to British residents of Spain not tourists).
90 day rule
This has hit second home owners hard because, as non-residents of Spain, they can only spend a maximum of 90 days or 180 days a year in two blocks of 90 days. Previously, non-resident holiday home owners would spend long periods at their second homes. It has also led to longer queues at airport immigration desks because British passports are now required to be stamped on arrival and departure to show that they have not been in Spain for more than 90 days.
Buying a home
There is now more paperwork involved for a British person (non-European Union) buying a house in Spain. In some cases, permission has to be sought from the Spanish military if the house or apartment is in a "strategic area".
TIE cards
The new TIE cards replaced the "Green residence certificate" for British citizens living in Spain. Initially, the changeover was quite smooth but now there are reports of long delays. It has been reported that more staff have been recruited at the Foreigners' Department in Spain to ease the backlog.
Conclusion
Taking all the above into account, there is a need for Spain and Britain to sign a bilateral agreement which would mean that the rights of British citizens in Spain remain the same as when the UK was a member of the European Union. However, some would say that Britain left the European Union knowing (or not) the consequences of the move. While the above is "worst case scenario", Brexit has altered the lives of British citizens living in Spain.