How do international currency exchange rates affect you as a homeowner? Many home sellers do not realise how currency exchange rates can affect them in a property market that has a large number of international buyers. We often think of this being something that relates to banking or big business and only notice its effects on monthly pensions or the cost of goods from our home country, however it does have a big impact when selling your property to foreign buyers.
How do Exchange Rates Effect my Property?
The Best GBP to Euro Rate
In 2000, the pound was very strong against the Euro at 1.752. This meant that if you came to Spain with £100,000 to spend, you could buy a property here worth €175,200. £200,000 became €350,400 and £300,000 because €525,600. This meant the Brits were getting extraordinary value for money.
The Worst GBP to Euro Rate
In 2008, the global financial crash had far-reaching effects. On 30 December 2008, the pound was 1.02 to the Euro. This meant that any property purchases were nearly the same price in either currency. £100k was only worth €102k; £200k was worth €204k; and £300k was worth €306k.
British Keen to Buy
After the 2020 pandemic restrictions, there is a pent-up demand from Brits wanting to get back to Spain and buy property here once again. In fact, the demand is likely to have even increased in comparison as people want to escape the feelings of confinement and are keen to take the bull by the horns. If you need to sell your Spanish property, the good news is there will be no shortage of interest.
What’s the Better News?
If you bought your Spanish property for €175,000 in 2000, you might now only get €117,000 for it. People then think they have lost €60,000. If you’re going back to the UK with that €117,000 in your pocket, you’ve actually got the £100,000 you bought the house for in the first place. There’s no better time to sell than now.
How Can That Be?
After Brexit, the pound’s value fell by 16%. Yesterday, the pound was only 1.17 to the Euro. £100,000 was worth €117,000; £200,000 was worth €234,00; and £300,000 was worth €351,000. When the pound was very strong against the Euro, this helped to fuel the rise in European house prices. However, when the pound became weaker against the Euro, spending power was reduced for UK buyers. The power was reduced but the facts are that UK buyers are still spending the same amount.
Properties in town that have a more Northern European style are currently appealing to a much wider audience of buyers, with larger rooms and less stairs. Whilst country properties are receiving the most enquiries, it is important to have all of your legal paperwork in place and this is something we can help with and check before you begin marketing and to ensure you receive the best possible price for your property. Contact Mathew on (+34) 643 821 326 or Amy on (+34) 695 398 679.