Sterling's recent gain against the euro provides a window of opportunity for international clients looking to buy property in eurozone countries.
The effect of the exchange rate changes over the past few months has been to effectively reduce property prices by around 10%. In addition, aggressive pricing by developers in areas of the Cote D’Azur such as Nice and Cannes is making prime property in France more affordable, according to Tim Harvey, managing director of discount broker, offshoreonline.org.
The net effect is to make any purchase of euros around 10% cheaper, saving £20,000 on a £200,000 house purchase.
“Exchange rates are a vital part of the mix for most UK buyers operating in France, but now it seems the tide may be moving slowly in favour of the UK buyer with the weakening euro opening up some very attractive options for UK buyers. With mortgage rates available from 3.45%, we have noticed a slow but steady increase in enquiries since before Christmas which has continued into the New Year,” explains Harvey.
Indeed the window of opportunity may stay open for property bargain hunters, with currency experts remaining negative on the euro's prospects. Foreign exchange experts, Ebury Partners says disappointing sales and employment figures across the region, as well as the continued outflow from Spanish and Italian banks, are set to dampen enthusiasm for the currency further.
"In spite of highly supportive positioning data and good performance in risk assets worldwide, the euro sell off is a sign of the overwhelming negative consensus that has developed around the eurozone prospects. For once, we are happy to remain lined up with the consensus view, and remain heavily bearish on the common currency," says Ebury.
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