Edward Hardy, Industry Manager at World First Foreign Exchange looks at the strength of the pound
Having made it through the first two months of the year, and with winter now behind us, we can start looking forward to spring and summer. It also feels like a good time for a holiday.
Many people will be heading off to make the most of the end of the skiing season, and taking advantage of some of the end of season deals that are doing the rounds. With some rooms empty at this late stage in the season, it’s possible to get a decent discount.
And the great news is with the pound having just hit seven-year highs against the euro, your pounds are worth so much more. Right now, £1,000 will get you over €1,390 – a year ago; it would have got you €150 less. So you can treat yourself to a few more cocktails après-ski.
The reasons the euro is so weak at the moment are partly down to comments made by the president of the European Central Bank, Mario Draghi, around quantitative easing, and also the success of Syriza in the Greek elections and the uncertainty that’s caused for the single currency.
But maybe a short ski break just isn’t enough. Well, you could always buy a ski chalet, so you can come and go as you please.
For many people, the cheap euro and low French mortgage rates are proving just too tempting. For example, this time last year, £500,000 would have bought you a property worth €606,000. Today, that same amount of money would get you €689,000 – a phenomenal increase of €83,000 in just one year.
Unsurprisingly, viewings are up on ski properties. According to Nicholas Leach from Athena Advisors, “Ski property viewings are up 42% on last season with the big resorts of Val d’Isere, Courchevel, Megève and Les Menuires.”
It isn’t just ski properties that are seeing a lot of interest; there is a a great deal of interest all over Europe, especially where property prices are still coming down. In France, the price of houses fell 2.2% year on year from the fourth quarter of 2013, compared to a year ago.
As the arrival of spring also heralds plenty of better quality homes onto the market, there is a feeling that the Italian property market has reached the bottom of its curve, and that it is on its way back – with prices soon to rise. That said, some prices are still 30% down on what they were at their peak in 2009, and now represents a good time to buy.
Spain is also a tempting proposition, with the average price of a property there down in the last quarter by nearly a third from 2007 levels, though last month did see prices increase for the first time since 2007. There is a feeling that these relatively low house prices can’t last forever – and nor, for that matter, can the strength of the pound against the euro. So rather than just a break away to celebrate the start of spring, why not go one better? Now could be the time to treat yourself to a property abroad.
For more information click here