The silent enemy for overseas property buyers

Warren Lewis
16th July 2013

The exchange rate has in the first six months of the year again become the silent enemy of British overseas property-buyers, as well as residents receiving Sterling based income in the Eurozone

Richard Way, Editor of The Overseas Guides Company says:

“This is thanks to £1 being worth just €1.156 yesterday, 16th July, compared with €1.231 on 1st January. It means a typical €150,000 property in Spain or France has increased in price by around £7,800 to a UK buyer - assuming the property's price hasn't changed - purely on account of the weaker pound.

It also means a monthly income of £1,000 is worth €53 euros less in Europe, or €636 a year - far more than the winter fuel allowance is worth!

Buyers in the US have been hit just as badly too. Yesterday £1 was worth $1.508, while at the start of the year, it was $1.626, making a typical $150,000 single family home in Florida around £7,200 more expensive to a British person.

On the flip side, the Australian dollar has weakened, from £1 to AUS$1.56 to today's AUS$1.66 - great news for anyone emigrating there or receiving a UK income!

Uncertainty over when Sterling could strengthen is especially intense at the moment, fuelled by recent comments from the new Bank of England Governor.

This makes using a currency exchange specialist to transfer money abroad - rather than just using a bank by default - even more advisable. Many people might find the strategy of forward buying half of the total amount they need to transfer and leaving the remainder to transfer at a spot rate on the day, a useful strategy to protecting themselves from rate movement.”
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