Brexit, house prices and reasons not to worry

WHATEVER the results of the vote on June 23, our research shows us that Spain will always appeal to British buyers.

Even if Brexit comes to pass, Brits will still want their place in the sun or the countryside, a better way of life and a warmer climate.

We do not expect there to be any change in the ability of Brits to purchase abroad – after all, the most popular locations in Spain do rely on the significant stream of income from British buyers and expats to boost their economy.

From a currency perspective, here at Smart Currency Exchange we have seen how sterling strengthened against the euro throughout 2015 following worries over Greece and the weakness of the Eurozone economy.

Forecasts were for continued euro weakness, but the markets were caught by surprise when the European Central Bank’s actions following the December 2015 meeting didn’t meet expectations, and the euro strengthened.

Sterling’s weakness has since been exacerbated by talk of the potential of Brexit; and setting a date for the referendum has focused everyone’s minds on what this could mean. The pound will more than likely continue to struggle in the face of uncertain markets, speculation about the outcomes of the referendum and in response to other economic data.

Be aware that sterling could still fall further in the run up to the referendum and after the vote.

It is important to remember, however, that although the sterling-euro exchange rate soared in the summer of 2015, the rates available now are still considerably better than those available up until as recently as 2014, in the wake of the financial crisis.

Of course this volatility may well affect what properties you can afford for your money in sterling, taking any property beyond your budget.

This is where we recommend utilising our services and property buyer solutions, such as the opportunity to secure the price of your property in pounds at the current rate to protect you from any future fluctuations before you make your final payment.

After all, if you choose to leave the property price in the hands of the exchange rates and wait for rates to improve, you may be waiting for some time.

If the outcome of the referendum IS a “Brexit”, the sterling-euro rate could potentially fall further. And  even if we decide to remain in the EU, there is likely to be some uncertainty in exchange rates until everything settles down, so there is no guarantee the rate will shoot up immediately following the referendum.

• Email mark@smartcurrencyexchange.com or visit the Mijas La Cala office behind SuperSol.