It’s certainly been an interesting week for sterling so far, with a swing of nearly 2% against the euro varying the price of a €250,000 property on your favourite continental hotspot by around £3,600, just since Monday morning.
You can imagine what that kind of currency volatility could do to the price of your overseas home if repeated over the two or three months of a property transaction, but that is very much the environment we are in at the moment.
Yesterday’s Purchasing Manager’s Index for services was the culprit (read more about PMI here), crashing to its lowest since February 2021 and sending sterling with it.
As the report noted, however, the exception to the gloomy picture was business in travel, leisure and similar services. This seems to include overseas property buying, as we are seeing a lot of clients taking out forward contracts on currency for overseas property transactions this summer.
A quick glance at the currency graphs over the past five years will show why. Although last summer (boosted by the UK’s better vaccine rate) was an exception, the summers of 2017 to 2020 saw sterling weakening to €1.10 and below.
So to lock in your rate in case that happens again and sterling loses another five of six per cent, do call your trader on 020 8003 4915.
