Brits buying property in the Eurozone have seen their buying power rocket since the start of the year, thanks to the euro losing value against sterling. Here’s an overview of what’s been happening and how to make the most of it…
Article written by Smart Currency Exchange
The exchange rate for UK buyers in Europe is currently the best it’s been for around six years, making it a rewarding time to purchase property in those all-time favourite destinations of Spain, France, Italy and Portugal.
The dramatic shift in exchange rate means that in February 2015 a home in the Eurozone is around 10 per cent cheaper than the same month last year. In real terms, this pretty house in Brittany, which is on the market for €160,775, is circa £12,000 cheaper today than 12 months ago.
“And the cost of living has also fallen for expats who draw a sterling based income,” added Alexis Goldberg, resident of the Languedoc region and author of FranceBuyingGuide.com. “Those extra euros each month really make a difference, and could mean an extra meal or two out each week, like they do for me and husband Rod!”
A string of events has caused sterling to strengthen against the euro, beginning with the decision of the Swiss Central Bank to lift a cap on the value of the Swiss franc against the euro, undermining confidence in the single currency – and in the meantime making Swiss property and mortgages considerably more expensive to foreigners overnight.
A week later, the European Central Bank announced plans for a quantitative easing programme in the Eurozone, weakening the euro further, and Greece’s election of an anti-austerity government went further to inject nervousness about the future of the euro. Since being elected, the new Greek government’s preference to keep the euro has halted the euro’s fall.
Said Charles Purdy, CEO at currency specialist Smart Currency Exchange: “These political and economic events have ensured there hasn’t been a better time for Brits to purchase property in the Eurozone for some time. In fact, in the last seven years there has been over 20 per cent depreciation of the euro. Of course, nothing is certain in currency markets, and the euro may well recover some of its strength in the coming weeks, should the Syriza party come to an agreement with Brussels that gains confidence in global markets and if the quantitative easing starts to have a positive effect on the Eurozone economies.”
Meanwhile, to make the most of the favourable exchange rate, the first thing that anyone sending money to the Eurozone should do is speak to a currency specialist, like Smart Currency Exchange.
“Do not simply go to your UK bank and ask them to send the money to your euro account abroad,” explains Alexis Goldberg. “Why? Well, you will receive a poor exchange rate, which means wasting money unnecessarily and you won’t be offered assistance planning your future transfers, which is a crucial part of the service offered by Smart Currency Exchange. One clever way Smart Currency Exchange helps its clients to budget and get peace of mind is by allowing them to reserve an exchange rate for a future transaction, using something called a forward contract.”
If you are considering an overseas property purchase in 2015, whether for lifestyle or investment, opening a no-obligation account with FCA-authorised Smart Currency Exchange will enable you to benefit from their competitive exchange rates and specialist currency knowledge, ultimately saving you money and time. To find out more, download Smart Currency Exchange’s free report or visit the Currency Zone.