by Simon Hilton, senior foreign exchange consultant at World First and official Expat Focus foreign exchange partner
We’re already a third of the way through 2014 – clichéd I know, but seriously, where has the time gone? – and so far, it’s been a good year for sterling. A succession of strong data has kept the pound on top of most other currencies, and what a difference a year makes – at the beginning of last year, sterling was weak, data was poor and the UK economy had been downgraded.
Expats looking to buy a property in Europe will be pleased to hear that this strong pound will enable them to get more for their money. Whereas just over a year ago, a pound will have got you €1.15, it will now get you €1.21.Whatever the amount of money transferred, your pounds will go further, but if you’re making a larger payment – and buying a house overseas definitely falls into that category – the savings made could be significant.
And it’s not just the euro against which the pound is performing well. Sterling has just reached a four year high versus the US dollar, with one pound now worth around $1.67, compared to $1.49 in March last year. Also for your pound, you can now also get 1.81 Australian dollars (AUD) and 1.85 Canadian dollars (CAD), up from AUD1.45 and CAD1.53 just over a year ago. So in the space of just over a year, when transferring £100,000 you’d now get $18,000, €6,000, AUD$36,000 or CAD$32,000 more for your money. What a difference that could make, in terms of the kind of property you could afford.
In addition to good exchange rates, it’s a good time to take advantage of the falling cost of – or at least a slower increase in – property prices in some excellent locations.
And the ease with which people are able to sell their house in the UK is certainly helping to reduce the delay. The seller’s market in Britain means around ten buyers are competing for every home, and house asking prices are hitting record highs.
People are able to take a tidy profit out of their UK homes and put it towards a new home abroad.
But even with everything seemingly in the favour of those looking to take the plunge and move abroad, it can still be a difficult decision to actually go ahead and make it happen.
But having spoken with a number of people who have made the leap of faith, I’ve found that most are pleased they did. Eleanor and Mike Tobin are both retired and having recently sold their North London property, they bought a villa in the south of France. It was the falling house prices there that tempted them – average sales value of French property has fallen by 2% – and they found that the strength of the pound did them a favour. Once they got there, they have been “bowled over by relaxed way of life, warm welcome and great weather. We’ve made loads of new friends, and apart from the friends and family we’ve left behind, we can honestly say we don’t really miss our life in the UK.”
Jennifer Redman moved to the Dordogne area of France after the death of her husband, and hasn’t looked back. “I came here looking for a new life and a fresh start, and it’s been the best thing I ever did. The people are so friendly, the countryside is just beautiful and I am fully involved with all aspects of community life. I would say to anyone thinking about it, to go for it!”
These are just two stories of British buyers who are embracing a new chapter of their lives as expats. The strong pound and falling property prices abroad are certainly causing more people to at least consider the idea of moving abroad.
How else can a strong pound help British expats?
Those who have retired overseas and are getting their pension payments sent to their bank account in their new country of residence, can make the most of sterling’s recent strength against many world currencies, including the euro.
As an expat, you can still receive your UK state payment as well as transferring your private pension overseas, provided it meets requirements set out by HM Revenue and Customs (HMRC). To find out if your pension is a Qualifying Recognised Overseas Pension Scheme (QROPS), click this link.
And if friends of family want to send you any funds in your new country, their money will go further with the current pound strength in their favour.
Simon Hilton is a senior foreign exchange consultant at World First specialising in assisting private clients and companies with their foreign exchange transactions. Simon is authorised by the FSA to offer foreign currency options. Contact Simon today for a free, no-obligation currency transfer quote.
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.