Overseas property investors - Beware of currency fluctuations

Article Date : 04 July 2005

UK property investors looking to purchase overseas should be aware of potential currency fluctuations in order to get the best deal, according to market experts. News From Assetz Property News Service Buying abroad has grown increasingly popular an option among UK property investors in recent times, with many attracted by the promise of cheap holiday homes in bright, popular locations. Figures show that growing number of UK property investors are turning their attentions overseas, looking for new investment opportunities in foreign markets. As many as three in four property investors are thought to be considering buying abroad in the near future, largely focussing their attentions on established holiday home hotspots in France and Spain for example. Conversely, surveys indicate that over the coming 12 months only 7.5 per cent of serious investors are likely to buy new properties in the UK. This is despite a high level of confidence among buy to let investors in general, recent studies having found more than half of all these investors to predict that the market will remain stable over the next 12 months, and 22 per cent anticipating a moderate rise. With house prices having picked up throughout 2005 and the pound remaining strong, many investors are looking overseas for a dream holiday home in the sun. Last year saw somewhere in the region of 54,000 people move to Spain alone, some 15 per cent of the total number of people (360,000) who moved abroad last year. However, a worryingly large proportion of these investors may not be taking enough notice of currency changes, potentially putting themselves at risk of losing money. A new survey conducted by foreign exchange provider Moneycorp confirms that 80 per cent of potential buyers do not even take into consideration how to get the best exchange rate. The concern here is that even slight differences can have weighty ramifications on property prices, especially for larger, more expensive properties. Examining this issue Alexander Wright, director of private client services at foreign exchange provider Hifx, uses a practical example. "To show just how much currency movements can affect the cost of actual buying abroad, we saw a property in Florida recently, priced at $250,000," he told the Telegraph. "It would have cost £131,000 on May 5th but by May 10th, due to a strengthening in the dollar, it would have cost £133,333. That's an increase of £2,333 in just five days, or almost two per cent." To avoid losing out buyers are strongly advised to shop around and investigate the best deal as opposed to relying on their bank or building society to look after the foreign exchange transactions.

Overseas property investors - Beware of currency fluctuations

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