Since the UK voted to leave the EU in June last year, the fall in the Pound has dominated the headlines. It has so far dropped around 18% against the US Dollar and 12% against the Euro compared to before the Referendum. There’s also speculation that it could fall further once Article 50 is triggered, although the long term situation remains less clear.
The weaker Pound is potentially a concern for people in the UK with interests overseas and UK expats with income in Sterling, as it reduces their spending power abroad. However, for Brits who are looking to sell their overseas property, it could be an opportunity to get a little more for your money.
An opportunity for overseas buyers and sellers
There has recently been increased interest in UK property from buyers based overseas. For example, deVeres Mortgages recently announced that mortgage enquiries from overseas buyers rose 45% in their fourth quarter, compared to the previous quarter. Some of these enquiries are from foreign investors looking to diversify their portfolio with buy to let properties, but they were also hearing from UK expats who are considering purchasing a UK property so they can return home or to support children in the UK.
Similarly, some British owners of overseas holiday homes are making a profit by selling the properties. Portugal’s Real Estate Professionals and Brokers Association has reported that the French have now overtaken UK nationals as the biggest foreign property buyers in Portugal. In these cases, both the French buyer and the UK seller are able to benefit from the recent strengthening of the Euro.
Motivations for Brits to sell
It is still unclear at this point what Brexit could mean for UK expats in terms of pensions, healthcare, visas, residency rights and more. There is hope that a deal will be reached quickly on reciprocal rights for UK expats in Europe and EU expats in the UK, and there are also discussions about a potential EU citizenship for UK nationals. However, the uncertainty is naturally making some people nervous and a recent survey by the Brussels and Europe Lib Dems group suggested that four out of five expats are concerned about losing their right to live abroad.
Some people may choose to wait and see how negotiations progress (as politicians on both sides of the English Channel have assured expats the current situation will not change during the two year negotiation period) or look to obtain citizenship overseas. But others may be starting to consider moving back to the UK.
The weaker Pound has also put some financial pressure on Brits living overseas. We asked our customers in September whether the vote to leave the EU was a potential concern for their finances. While 53% of UK respondents told us they were quite concerned or very concerned, this number increased to 64% for respondents living in the EU. It is possible the Pound could start to strengthen again in the mid to long term, and in the meantime there are options available to you that can help you make the most of your money if you are transferring Pounds to Euros. But it is understandable that the current financial situation may cause some people to think about returning to the UK.
But on the flip side, the recent weakening of the Pound could benefit you if you decide to sell a European property in Euros and use it to buy a property in the UK. The table below shows how the drop in Sterling would affect the price of an average detached house in England, according to the UK House Price Index for December 2016:
All figures are based on interbank rates. This is the rate at which banks and brokers buy and sell money to each other. Private individuals and small to medium sized businesses cannot access these rates and they are provided for indicative purposes only. For a quote, please contact us.
Getting the most for your money
But exactly how much you can get for your money can also depend on how you choose to transfer it back to the UK as the costs of sending money abroad can vary. But at HiFX, we are dedicated to providing highly competitive exchange rates, to help your money go further. We trade in 142 currencies so we can transfer money across 170 countries, both into and out of the UK.
We can be your eyes and ears in the market with a range of currency tools and rate alerts. If you spot a rate you’re comfortable with, we can help you secure the rate for up to three years with a forward contract. Alternatively, you can set up a market order so your money is automatically transferred when the exchange rate hits your desired amount. For larger transfers, you will also have a dedicated account manager who will get to know your individual requirements and assist you with the execution of the transfer.
Whatever the reason for your international money transfer, HiFX has a range of services that can help you to make your money go further. If you’d like to discuss your personal situation in more detail, please contact us.
The details expressed in this transmission and accompanying documents are for information purposes only and are not intended as a solicitation for funds or a recommendation to trade. HiFX Europe Limited accepts no liability whatsoever for any loss or damages suffered through any act or omission taken as a result of reading or interpreting any of the above information. HiFX Europe Limited is authorised by the Financial Conduct Authority under the Payment Services Regulations 2009, registration 462444, for the provision of payment services. HiFX Europe Limited is a registered MSB with HM Revenue & Customs – Reg No: 12131222. HiFX is a limited company registered in England and Wales. Registered number: 3517451. Registered office: Maxis 1, Western Road, Bracknell, Berkshire, RG12 1RT