Weak pound set to hurt Spanish & Italian buyers

The weakness of the pound against
the euro has resulted in some Eurozone properties becoming 5-10 per cent more
expensive that they were last summer. While the strength of the euro is good
news for anyone selling a property in Greece, Spain or France, it’s not so good
news for anyone looking to buy overseas or to spend time at their foreign
holiday home.

We look at the weakening pound
and what effect this has on overseas property.

Buying a Spanish or Italian property more expensive than last summer

The Guardian reports that the value of the pound hit a peak in
August last year. At that time, £1 could buy €1.285, compared with €1.18 today.
And, with the pound set to weaken further, this could make things even more
expensive for people travelling to their holiday homes in Spain, France or
Italy.

The newspaper reports that ‘even
if the pound slides no further, this summer families will find they are paying
7.5 per cent more for food and drink in countries that use the euro, such as
Spain, Italy and Greece.’

The newspaper also reported that
‘anyone emigrating now will find that buying a property abroad now will cost a
lot more than last August’.

While it is true that it is marginally more
expensive to buy a property in Spain, France or Italy than it was last summer, sterling
remains well above its all-time low against the euro.

Those people selling a property
in Spain should take advantage of the strong euro now. We’re finding many
people selling their Spanish property online in order to take advantage of the
preferential exchange rate.”

If you are planning to buy a
holiday home, it could pay to lock in at the current exchange rate. Many FX
brokers will let you take advantage of current rates in case the pound weakens
further, which experts believe is certainly possible.

Andy Scott of HiFX told The Guardian: “With the potential
for credit ratings downgrades and more quantitative easing from the Bank of
England with the economy faltering, it’s unlikely there’ll be a resurgence of
buying interest in the pound any time soon.”

Author :

Nick
Marr