Sterling exchange rates had a bit of a bumpy ride in September with speculators gearing themselves up for the Scottish referendum result. With Scotland voting to stay in the union, the dust appears to have settled however, and the pound to euro exchange rate is hovering around a two-year high of €1.28 this week.
This is great news for anyone thinking of investing in overseas property, with the stronger pound making their money go even further. Rewind to last year when the pound fell to a low of €1.14, and the difference is pretty significant when you apply it to property prices. A prospective buyer with a budget of €200,000 to spend on a property in France, for example, will now only have to part with £156,250, compared with the considerably higher sum of £175,433 last year. That’s a saving of more than £19,000, showing just how much difference the currency markets can make.
Combine this with the low property prices to be found in many European property markets together with historically low mortgage rates, and affordability is better than it has been in years. With buyers’ budgets stretching that much further, the purchase of that place in the sun could seem even more tempting, especially when you compare the cost with overheated parts of the UK market.
However tempting it is, however, it’s important not to let you heart rule your head. It’s imperative to do your homework and to take professional advice before committing to anything, and you should always go through the same process that you would follow if you were buying a property in the UK.