by Simon Hilton, senior foreign exchange consultant at World First and official Expat Focus foreign exchange partner
It’s that time of the year when many people are heading away on their summer holidays, and such breaks away usually involve three stages; the anticipation in the build-up before you go, the sheer enjoyment of being there, and the disappointment but inevitability of having to leave a week or two later. Just imagine if you didn’t have to go home. Imagine if you moved abroad to start a whole new adventure.OK, it’s true – if you were to start a new life abroad, it’s not as if you’ll feel like you’re on holiday all the time. Unless you’re moving there to retire, you’ll have to find a job. If you’ve got children, you’ll have to consider education. But what you will benefit from is the way of life, the culture and the cuisine.
If you’re moving from the UK, you’ll also benefit from a strong pound, which means your money will go further, and you could be able to afford a more expensive new home as a result.
It’s also not as if the rate of house price rises in Europe should get in the way of you making the move either. According to the latest House Price Index from Eurostat, the statistical office of the EU, Prices were down by 0.3% in quarter one of 2014 compared to the first quarter of 2013. In the same period, house prices went up by 1% in the European Union in the same period.
Some of the biggest annual falls in house prices have come in Croatia (down 9.7%), (down 6.6%) and Cyprus (down 5.7%) – figures that must sound like music to the ears of British buyers who have seen house prices rocket back home (up 6.4% year-on year, and higher still in London). However, it’s not cheaper everywhere in Europe, and if you’re on the lookout for a bargain, just be aware that prices aren’t down across the board. House prices in Estonia are up 17.5% year-on-year and Latvia has seen a 10.4% rise.
There appears to be more interest around moving abroad too, with the overseas mortgage specialist Conti reporting an increase in the number of enquiries it received about property abroad. They reported that enquiries were up 58% in the first half of this year compared with the first half of last year.
The lower property prices in some European countries and more affordable rates of borrowing are tempting some buyers, and strength of sterling means that their money goes further.
At the time of writing the GBPEUR (pounds to sterling) exchange rate is well above 1.26, with £250,000 getting you more than €315,000. Rewind to March and the exchange rate was as low as 1.1932, and that same amount would have got you just €298,300. That means that in the space of just five months, you’ll now get around €17,000 based purely on the exchange rates. It just shows you what a difference the currency markets can make, and how important it is to get the best possible exchange rate.
One way of being sure of what you’re going to pay, and not getting any nasty surprises, is by using a currency exchange specialist to fix an exchange rate in advance. So if you’re buying a property in the Eurozone, you could fix an exchange rate now while the going’s good and you’ll know exactly what you’ll pay when it’s time for the transfer to be made.
With a strong pound and tempting looking house prices on the continent, maybe this year you’ll make your summer holiday last a bit longer – maybe forever…
World First transacted over £4.7bn for their 40,000 clients in 2012 and have a 3A1 credit rating from Dun & Bradstreet – the highest possible rating for a company their size. As well as tailored hedging solutions designed to protect you from adverse market movements, they also offer excellent service. Winner of the Client Focus Award at the 2012 National Business Awards, they provide personal service with a dedicated dealer, and a regular transfer service, which is perfect for mortgage or rental payments.