Since 2008 the pound has strengthened by more than 13 per cent against the euro and by a whopping 44 per cent against the South African rand. In the last year alone it has improved by 11 per cent against the US dollar and seven per cent against the euro. No wonder overseas estate agents are seeing more interest from British buyers.
“So far this year our sales have increased by 250 per cent against this time last year,” says Kieran Kelly of Chesterton Barbados. “The island is technically in the summer slow season but we have never been busier. The combination of a growing UK economy and the strong pound has increased interest and sales considerably.”
From Miami to Majorca anyone with pounds in their pocket is a winner. Holidaymakers cannot have failed to notice their money going further, whether they’ve been buying a beer in Ibiza or renting a villa in Provence.
£550,000: a restored five-bedroom 19th-century farmhouse with gardens, outbuildings and a pool in Lot, south-west France, was £607,895 last year. Through Winkworth France (winkworth.fr; 020 8576 558)
Home buyers are benefiting, too. “In the past 12 months the cost of a well-located two-bedroom apartment in the Cote d’Azur has reduced from £435,000 to £395,000 due to currency shifts alone,” says Nicholas Leach of Athena Advisors (athenaadvisors.co.uk; 020 7471 4500).
“One pound currently buys you €1.26 which is a 23-month high. If this trend continues the euro could be back to 2008 levels by winter.”
THE PERFECT FRENCH STORM
Three factors are behind the return of British buyers to France this year says Roddy Aris of Winkworth. “Lending rates are at their lowest making it very cheap to borrow money, exchange rates are bullish and the market is weak with prices considerably lower than three years ago,” he says. “Together this creates a perfect financial storm for potential buyers. First and foremost it is important to find the right property but right now is a very good time to be visiting France and making offers.”
Aris highlights two properties. A gorgeous Provençal stone village house in the Alpilles with five bedrooms, mature gardens and a pool, which would have cost £2,219,000 a year ago is now £1,583,000, thanks to an asking price reduction and the improved exchange rate. In Lot in south-west France, a restored 19th-century farmhouse with outbuildings and 1.8 hectares of land is nearly £60,000 cheaper than last year, down from £607,895 to £550,000. Contact Winkworth France: winkworth.fr (020 8576 558).
The pound’s strength has also affected mortgages, with repayments on a £317,000 loan now about £200 a month cheaper. French Private Finance has 20-year fixed-rate deals at 3.25 per cent, down from 3.50 per cent last year (frenchprivatefinance.com).
Sterling has also been climbing against the US dollar, reaching more than $1.70 this summer for the first time since autumn 2008. That equates to a saving of more than $80 for every £1,000 spent.
£352,000: villa with three bedrooms, below, at Royal Westmoreland golf estate in Barbados, down £53,000 on last year. Through Chesterton International (020 7201 2071)
“A year ago the exchange rate was $1.48 to the pound,” says Kelly of Chesterton Barbados (chesterton-international.com; 020 7201 2071).
“We are selling a three-bedroom home at the prestigious Royal Westmoreland golf estate for $599,000. Twelve months ago that would have been £405,000 but today it is £352,000, a saving of £53,000.”
CUT-PRICE IN CAPE TOWN
The South African rand has been especially volatile against sterling and snowbirds looking to secure a winter bolt hole in Cape Town are already sitting up and taking notice.
The pound, which in 2011 bought 11 South African rand, is riding high at 18.30 today. A R5 million apartment close to Cape Town’s beaches that would have been £420,000 last year is now closer to £280,000.
£500,000: a four-bedroom home on the Stonehouse Mountain Estate in Cape Town, with pool and garden, down from £642,000 last year. See chestertoninternational.com
“We have seen more foreign property investors, many of whom have cited the beneficial exchange rate as a main reason for their interest,” says Pieter Story of Chesterton Cape Town (chesterton-international.com; 020 7201 2071).
“Anyone with pounds to spend has either an increased purchasing capacity or can get savings of close to 30 per cent.”
- Athena Advisors: athenaadvisors.co.uk (020 7471 4500)
- Winkworth France: winkworth.fr (020 8576 558)
- Chesterton Humberts: chesterton-international.com (020 7201 2071)
- French Private Finance: frenchprivatefinance.com