If you’re looking to buy or sell in France, it’s likely that you’ve pondered the possible implications of the UK’s decision to leave the EU to your own circumstances. Yes, we’ve all got two years’ grace (and maybe more) but it’s a consideration in most big financial decisions, especially if you are British.
However, after sterling’s initial plummet (inevitable after the surprise and the warnings that had been made pre-Referendum by the Bank of England, followed by Cameron’s resignation), there’s now a new turn of phrase in town: the BREXIT bounce. This is borne out of rosy spending statistics in the UK and the acceptance that BREXIT won’t be an economic apocalypse, but just the ebbs and flows of the global financial world as it adapts to the future.
Yet, the value of currency always matters when you are about to send or receive a large amount of money and need to change currency. With the current market turbulence in mind, we chatted to our partner, Smart Currency Exchange, about their views and we thought we’d share them with you.
Most industry professionals are now confident that the UK’s relationship is likely to remain strong with the other EU countries. “After all,” Smart Currency Exchange’s Dean Biddulph told us, “we know there are a great many British expats who contribute to their local economies across the continent, and many EU citizens contributing to the UK. So both sides will need to remain accommodating and there’s clear evidence that political leaders accept this. Let’s not forget that while everything may feel up in the air and disoriented in the UK, Brussels is just as divided.”
We couldn’t agree more. There is wide speculation that that the EU simply can’t react quickly enough to globalisation. Their trade deals with the US, China and Japan aren’t exactly stable. With the news that TTIP is stalling and with problems in the Italian economy, the EU is not currently the most stable of ships.
Without exception, we have not come across any international professional who now believes that BREXIT will have much of an impact on British property owners or expats. As evidenced by the aptly named Promenade des Anglais and the Château des Anglais, Brits have taken holidays and been buying up property on the French Riviera long before the emergence of the EU. After all, Nice’s 300 days of sunshine a year remain constant, whereas world events change as frequently as the Mediterranean waves tickle the pebbles on Nice’s beach.
World events never stay still, but rather than putting off your dreams a better approach is to plan a currency strategy with your broker. Dean from Smart Currency Exchange agrees, even if his thoughts are less whimsical than ours: “There is a possibility that the process of actually buying property may get slightly more complicated once negotiations are complete, so if you do wish to purchase in the near future it might be a good idea to get started soon while the process remains relatively simple and straightforward”.
If you are contemplating selling your property in France in the next few years, you too may benefit from the current situation. Remember though, that capital gains tax and other variables can affect your personal position. If you are contemplating selling, we can talk you through the process and help you decide if now is a good time or if you would benefit from waiting.
The Great British Pound
This is a big topic right now if you are exchanging GBP for euros. Here’s what Smart has to say: “Sterling has certainly been on a rollercoaster over the last few years, and part of the reason why the value of the British pound seems fairly low now is because of the significant strength the currency experienced throughout 2015. If you compare the current rate to previous years, the rate we are seeing now is stronger than throughout much of 2013, and only a few cents below the rate of 2014”.
When buying property overseas, the currency markets will play a very important role in your purchase, as they will dictate the amount you need to pay in sterling to afford your purchase in euros. Sterling has weakened and remains changeable, but the good news is that property in many European destinations remains very good value. What’s more, while sterling is low against the euro now compared to the rates seen last summer, for example, it’s actually a lot more favourable for Brits buying in Europe than as recently as 2013, when people still had a healthy interest in buying property overseas.
Whilst the markets are so changeable, Smart Currency Exchange offers valuable currency guidance to help you make the most of your money. They also offer a number of products and tools that can protect your transfer in this uncertain time – such as a forward contract, which allows you to secure a rate now for a transfer at a later date. As we get closer to the US election, this is something to think about.
If you would like more information on the implications of Brexit, you can view Smart’s free Brexit Guide here.
If you would like more up to date information please call SMART on +44 (0)20 3627 5376 or email at firstname.lastname@example.org. Please quote “NICE PEBBLES” when contacting Smart to better orientate to request.
Alternatively, give Smart a call on +44 (0)20 7898 0541 to find out how they could help with your currency transfer.
Smart Currency Exchange,
1 Lyric Square,
London, W6 0NB, UK
Call: +44 (0)20 7898 0541
DISCLAIMER: Please note that the information collated here should not be used instead of expert advice; this guidance includes commentary from industry partners and experts. This information will be updated regularly as and when more information becomes accessible.