What to do if buying a property in Spain as Sterling exchange rates become increasingly volatile

IF you’re considering buying property in Spain, recent fluctuations in the pound-euro exchange rate are definitely something to keep an eye on.

The start of the month saw the pound drop sharply after reaching a near 30-month high just a few weeks ago, driven down by the UK’s Autumn Budget and some strong economic data from the Eurozone.

After a promising start, the pound rose in anticipation of Chancellor Rachel Reeves’ budget announcement. But that optimism quickly evaporated as Eurozone GDP figures revealed unexpected growth, with the bloc’s economy accelerating from 0.2% to 0.4% in the third quarter, coupled with Germany avoiding recession.

This was a wake-up call for anyone looking to transfer their pounds into euros for a property purchase.

The euro gained further momentum thanks to higher-than-expected inflation figures, which suggested the European Central Bank (ECB) might hold off on rate cuts. In contrast, the UK budget announcement revealed £40 billion in tax hikes and increased borrowing, sending the pound into a tailspin. After hitting a six-week low, it did manage to recover some ground, but uncertainty remains.

For UK buyers eyeing Spanish properties, the current market dynamics could have significant implications. If you’re planning a currency exchange to fund your purchase, it is best to tie into certainty.

If you want to gamble on the pound getting stronger then make sure you have enough cash available to cover your deposit if it goes the other way and weakens.

Nothing is worse than suddenly finding a poorer exchange rate means you can no longer put down the deposit.

Consider consulting with a currency transfer specialist, who can offer competitive rates and help you navigate these turbulent waters and lock in to an exchange rate in advance, giving you certainty.

We at the Finance Bureau can help you use the right strategy to mitigate some of the risks associated with currency fluctuations, ensuring that your dream property in Spain doesn’t come with an inflated price tag.