A recent survey of Spanish Hot Properties UK registered customers recently revealed that the exchange rate is the single most important reason as to why UK citizens interested in property in Spain have so far failed to enter the market even in a market offering such incredible value and prices. So what is the future for sterling in the short term and the long term?
According to currency broker HIFX in the first 3 months of this year sterling hit a high of 1.11576 in February and a low of 103.62 in January. If you look at the data on a monthly basis January has a high of 1.1361 and In February the low was 1.10 which caused a lot of optimism for an increase in the exchange rate to the 1.20 level which is the level customers of Spanish Hot Properties have indicated they would be happy to enter the Spanish property market at. However that now seems to have been a false dawn with March’s exchange rate figures showing a high of 1.13.49 and a low of 1.0550 with the current rate being around the 1.10 level.
So what is the long term future of the exchange rate and will property buyers lose more out by waiting for the exchange rate to increase to the 1.20 level. According to Spanish Hot Properties market annalist Simon Jones If buyers buy at 1.10 and the rate goes up to 1.20 that represents a 8.5% perceived loss and you then have to decide if you would gain more than that buy buying a property at 40% of last years price.”The other thing to bear in mind is that the currency might never get to rate of 1.20 this year.”
If you look at the history of Euro exchange rates once the Euro has fallen through a floor it has never gone back above that floor from the highs of 1.68 when the Euro was first launched in 2002 it then dropped to 1.50 and then to under 1.40 but came back to highs at 1.45 but never got back to the 1.50 levels. A similar history to the sterling high of over 5 douche marks to the pound in the late 70s and we all know what happened with the ERM. The reality now is the Euro is one of the strongest currencies in the world and that is unlikely to change and most city experts seem to be of the view that long term the sterling Euro rate will be one for oneâ€ Simon explained.
How it effects Spanish property no one really knows but according to Spanish Hot Properties Managing Director “if customers are getting a really great deal they should go ahead because if they are going to worry about the exchange rate and wait for it to return to the highs of 12 months ago then in reality they may as well stop looking to buy property in Spain but those who are serious should seriously look at the markets and forward buy there currency when it hits a 2009 high. Obviously this is just an opinion and it is up to individuals how they wish to interpreter the facts and make judgments for the future.”
If you would like to find out more about property in Spain then you should contact Spanish Hot Properties by either phone or email.
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