To say that we’re at the start of an uncertain week for the pound would be a bit of an understatement. In five days the UK will leave the European Union without a deal unless something can be cobbled together by then. I won’t run through all the potential options – various extensions, European elections, confirmatory votes, etc – because there are simply too many and we all have work to do and lives to live.
From a currency point of view, the pound has stayed reasonably strong. Against the euro we have frequently been a good 5% below where we are now in the past two years. But that may well not last. Even in less turbulent times than now we see the pound drop off quickly at this time of year. Obviously it did in 2016 (Referendum) and 2017 (with Theresa May’s terrible General Election result), but between early April and mid-May last year the GBP/USD rate dropped by around 8%, and I certainly can’t remember why, without looking it up.
And that’s just the period of time between when you may have made an offer on the property abroad and had to pay for it. Even the most careful and sensible buyer might struggle to find an extra 8% on top of the price of their purchase.
The good news is that the European countries seem confident that their no-deal planning is ready. So I hope and expect that even in the case of no deal the disruption for travellers and home buyers abroad will be minimal. Property ownership, of course, is not one of the four “freedoms” and so your right to buy and own abroad won’t be affected.
Apparently, among the items being most stockpiled by worried people are Italian tinned tomatoes and pasta. How ironic that with the price of flights tumbling right now, it might be easier to fly over there and get them yourself!
Do call your trader if you have even the slightest inkling that you want to buy abroad in the next year. You can reach our team of traders on 020 7898 0541.
We can lock in your rate for the year ahead with a Forward Contract, so you can get out to the Mediterranean, Florida or anywhere else, and start looking for that wonderful retirement or holiday home abroad.
