British buyers can find lots of opportunity abroad as the strong pound lops tens of thousands off house prices.
Britons thinking of buying a property abroad will be encouraged by the sunny forecast for sterling. The value of the pound has been boosted by the return of UK economic growth to pre-recession levels and the International Monetary Fund’s decision to upgrade its forecast for Britain’s fortunes. A prospect of increased interest rates has also boosted the value of sterling — all great news for anyone eyeing up a home abroad.
Since 2008 the pound has strengthened by more than 13 per cent against the euro and by a whopping 44 per cent against the South African rand. In the last year alone it has improved by 11 per cent against the US dollar and seven per cent against the euro. No wonder overseas estate agents are seeing more interest from British buyers.
So far this year our sales have increased significantly against this time last year. The combination of a growing UK economy and the strong pound has increased interest and sales considerably.
From Miami to Majorca anyone with pounds in their pocket is a winner. Holidaymakers cannot have failed to notice their money going further, whether they’ve been buying a beer in Ibiza or renting a villa in Lucca.
One pound currently buys you €1.31 which is a 28-month high. If this trend continues the euro could be back to 2008 levels by summer.
The pound’s strength has also affected mortgages, with repayments on a £317,000 loan now about £200 a month cheaper. French Private Finance has 20-year fixed-rate deals at 3.25 per cent, down from 3.50 per cent last year.
Sterling has also been climbing against the US dollar, reaching more than $1.70 last summer for the first time since autumn 2008, although a little down at the moment predictions state it will start going up soon again. That equates to a saving of more than $60 – $80 for every £1,000 spent.
The South African rand has been especially volatile against sterling and snowbirds looking to secure a winter bolt hole in Cape Town are already sitting up and taking notice.
The pound, which in 2011 bought 11 South African rand, is riding high at 18.30 today. A R5 million apartment close to Cape Town’s beaches that would have been £420,000 last year is now closer to £280,000.
We have seen more foreign property investors, many of whom have cited the beneficial exchange rate as a main reason for their interest.
Anyone with pounds to spend has either an increased purchasing capacity or can get savings of close to 30 per cent.