274: Overseas property gets cheaper for Brits
Navigation trail: / latestnews / archive / 274 - published: 19-04-07
Yesterday the British pound reached a 15-year high against the US dollar - and while this might give the economists headaches it is great news for overseas property investors.
Whether you are looking for a place in the sun for the cold winter months or trying to make some money from rising house prices abroad, the strength of the pound means you can get more for your money.
"There has been a lot in the news about the benefits of shopping stateside, but people looking to buy property in the USA, Caribbean, China, Malaysia, Belize and a whole host of other emerging markets, should also look at financing their purchase now," said Mark Bodega, of HiFX.
"It's worth remembering that the last time the pound traded consistently above $2 was in 1975."
Sterling currently buys you 20 per cent more in dollars than it has on average over the last 20 years, but currency exchange experts are advising Britons to act now to secure the best rate.
"We always remind people that they would never agree to buy a property in the UK if they did not know how much it was going to cost them. If they agree to buy an overseas property without fixing the exchange rate at the outset, that's exactly the gamble they are taking," said Mr Bodega.
People buying an overseas property can take advantage of current interest rates by locking the rate in a forward contract.
This allows people to keep buy the foreign currency they will need now - at today's rates - and pay for it later up to two years into the future.
"Most property purchases abroad take between eight and 12 weeks to complete, so people need to think about currency fluctuation between the time of signing the contract and the final payment actually being sent," Mr Bodega said.
"It's even more important if you're buying off-plan as the average purchase time rises to between six to 24 months. Forward contracts are a great way for people looking to buy overseas to take advantage of the current favourable exchange rate."
Source:
MyFinances.co.uk