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Tumbling pound sends cost of European holiday homes soaring

Your Money
Written By:
Your Money
Posted:
Updated:
26/02/2013

Properties in Europe are the most expensive they have been for over a year for British buyers as the pound falls further against the euro.

The pound slid to a 16-month low against the euro yesterday, pushing up the cost of holiday homes on mainland Europe for British expats and holiday homeowners.

Brits hoping to sell their overseas property to British buyers are being warned that they may have to flexible in order to make a sale, as homes will now be more expensive for Brits hoping to buy.

Richard Way of The Overseas Guides Company, said: “A knee-jerk reaction from many British people on the verge of buying overseas property will be to put their purchase on hold and see if the rate moves back in their favour. However, this might not always be necessary.

“Why? Because vendors who will be repatriating the proceeds of a sale to the UK – and so are likely to have a target amount of pounds they wish to achieve – can afford to be more flexible on local price when the pound weakens.

“A final thought for buyers needing to send money abroad during this unstable period for the pound is to consider a forward contract with a currency specialist – they bring peace of mind and can save money.”

Since 1 January 2013, a €100,000 home in France or Spain has increased in price by more than £6,000 thanks to the pound dropping against the euro from £1/€1.231 to £1/€1.144 in the first two months of the year.

Meanwhile, against the dollar the pound has fallen even further, to a two-and-a-half-year low.