Sterling has continued to struggle against the euro, but the precipitative falls of last week have at least stopped for now, at just under 1% down on this time last week.
Against the US dollar the drop is a little lower, at just 0.5%.
The pound has fallen by around 2% since its peak in early April, which would mean that a €200,000 property is £3,000 to £4,000 more expensive than two weeks ago.
A property purchase takes around two months in most European countries, so between agreeing a price and actually paying for it, a lot can change. Two months is often enough to iron out the biggest leaps and falls in currencies, such as the 13% drop in the first four weeks of the lockdown last year, which settled down to a 5% loss by the second month.
However, you may be interested in how common it is for the pound to drop 2% over the course of two months, which would make, as already noted, a €200,000 property at least £3,500 more expensive.
An analysis of rate changes over the past five years shows that on roughly 25% of the days when you could have made an offer, by the time you come to pay two months later the pound has weakened by 2% or more.
Ah, you may say, but there were some days when between making an offer and actually paying, the pound strengthened and that €200,000 property cost me £3,500 less.
And you would be right, but over the past five years that happened on only 19% of the occasions.
Indeed, there were about 9% of days over the past five years when if you made an offer on day 1, by the time you came to complete on the property two months later you would have had to find 4% or more extra in sterling compared to the price when you made the offer.
Scary stuff!
But easily controlled if you lock in your exchange rate on the day you agree a price, via a forward contract. So please do speak to your trader on 020 8003 4915 to do that.
