ROTHMORE INVEST

How exchange rates can benefit international buyers ?

Its no secret that the the British Pound has had a turbulent past few years, after the EU referendum back in the summer of 2016 the Pound has fallen as much as 25% against a basket of other major currencies.

What does this mean for international buyers?

Well the short answer is simple, if you purchased a UK property in June of this year, you would have payed a staggering 20% less than you would have done before the referendum.

  • Date:
  • 21 Jun 2019

Talk to me in monetary value!

Well, GPB/USD was trading at 1.48 in June 2016 (before the EU Referendum) and as this morning is now trading at 1.25. To put that into perspective, if you as an international buyer where looking at investing in a £200,000 property back on the 25th of June 2016, it would have cost you around $296,000. Now, if you where looking to buy a £200,000 property in June of this year, it would cost you $250,000 which is a huge $46,000 saving just on the back of the exchange rate.

What this means for the future?

The reason for the pounds dramatic fall back in 2016 was a reaction to the uncertainly in the market surrounding the UK leaving its largest trading partner, the EU. Over the course of the last couple of years since the vote, we have seen sterling back up at around the 1.35 level, as the seesaw of trade talks between the British government and commitments from large UK based corporations go on.

Market reports from some of the most respected global banks are predicting GBP/USD to achieve the previous highs form before the referendum after we see the outcome of two scenarios, the first being another EU referendum and the second being a softer more trade free Brexit.

Either way, if we see GBP/USD rise as predicted, property in the UK for an international buyer will naturally become more expensive.

How to make the most of the exchange rate as it currently stands?

Many of the international buyers that we deal with are taking advantage of current exchange rates. With a view that the future looks positive for the UK and thus these low exchange rates wont last. The reason this is such a lucrative opportunity for international buyers is that not only can they benefit from the capital appreciation of there property value increasing, but also enjoy the value of the property in GBP being worth more USD in a few years time as the pound strengthens.

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