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Exchange rates – the silent enemy for overseas property buyers

Exchange rates - the silent enemy for overseas property buyers
July 16th, 2013
Author: Guest Writer

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.

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!

Spanish Mission Style House (PD)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.

By Richard Way Editor of The Overseas Guides Company, www.OverseasGuidesCompany.com.

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