Blakemore Walker Chartered Surveyors & Legal Consultants
SPECIALISING IN PROPERTY PURCHASE AND SALES IN ASTURIAS, CANTABRIA & GALICIA
MEMBERS OF THE ROYAL INSTITUTION OF CHARTERED SURVEYORS
PROPERTY AND THE EURO
The pound is still holding its range between the euro at between 1.10 and 1.20. In recent weeks it has been as high as 1.14 and this was described by the market as a rally. Although a holiday on the continent might now be costing marginally more than 18 months ago, when it comes to a property purchase, then the memory lies with the stronger pound and its purchasing power at 1.40 to the euro.
Well! things move down slowly. The pound is moving closer to the bottom of its range as suggested in the May edition.There could be further to go but in theory the pound is undervalued along with the dollar.
Still the range between the pound and the euro remain between 1.10 and 1.20 but the general election could influence this rate depending on the outcome. A strong Conservative majority could see some strengthening in the pound, but whatever happens there will still be the Brexit issue to resolve in the coming years. Some market experts say that fair value is probably closer to 1.20.
The pound has risen in recent weeks to 1.20 and now stands at just above 1.15 against the euro. The market pundits are saying that dollar strength and Brexit comments by UK politicians will likely cause a certain amount of volatility. One would expect a range to be held between 1.10 and 1.20 but a break through at either end could be interesting!!
Not much movement in recent weeks for the pound against the euro. At 1.11 there seems to be a floor to the recent depreciation set at just above 1.09 - there will be likely further fluctuations. One interesting point of note is how the euro is weakening against the dollar - currently at 1.09.
The pound has weakened further against the euro brought about by the uncertainty of the Brexit negotiations which will follow article 50 notice in March of next year. The volatility of the pound has been evident in recent weeks and further volatility is expected. There were reports last week that at certain airports in the UK, foreign exchange rates were at 88 pence to the euro. The interbank rate currently stands at 1.10 but parity may be inevitable.
Since the referendum vote in June of this year the pound dropped fairly dramatically but in recent weeks seems to have settled around the 1.17 mark. The experts as ever are predicting further moves with the majority saying that there is likely to be short term strength followed by further weakening into 2017. Both USB and HSBC are forecasting parity with the euro by the end of 2017. It is certainly true to say that there is likely to be further volatilty and this may depend on how the BREXIT negotiations go over the next year or so. When considering the relative strengths of the euro economy and the UK economy, the EU is creeping along with slow growth but backed by a strong european central bank.
Volatility is the name of the game. The pound has lost some ground against the euro but the market fluctuations are likely to continue. One can wait for the pound to reach say 1.40 and make a transfer into a spanish bank account. Alternatively, a forward rate booking can be achieved with a currency broker. At the beginning of the month the pound is around the 1.25 level, but remember just over two months ago it was at 1.42. Expect further fluctuations and keep an eye on the ranges.
At the beginning of the year the pound against the euro remains favourably strong for the UK property purchaser in Spain. At around 1.35 the upside has been less than predicted a few months ago, but the markets will remain volatile as has been shown in the opening stock markets of the year. It could be argued that 1.35 is at the lower end of the range of the pound against the euro.
The pound against the euro has been fairly steady over the summer and still provides the potential purchaser in Spain with a strong purchasing position. As the UK increases interest rates over the next year or so there should be a further strengthening of the pound. Will we see over the 1.45 level and beyond?
At just below 1.40 the euro seems to have settled into a fairly narrow range against the pound. Many are saying that the euro is now near to fair value but the recent strength in the pound has certainly brought out the property buyers.
The euro has weakened in recent weeks due to a stronger dollar with the US economy doing well, and more significantly the European Central Bank announcing a programme of bond purchases. There has also been some pressure caused by the Greek situation as discussed under February Market Comment. Every pound will now buy around 1.33 euro and this strengthening in the pound can make a substantial difference to the price paid for property. Certainly the property market will benefit with British buyers still at the top of the purchaser table and there may be more currency gains to come.
The pound has been trading in a fairly narrow band against the euro in recent months with slight weakening in the last few weeks. Certainly the euro against a basket of currencies has been weakening but the euro/pound story could play out in surprising ways in 2015. 2014 has been a good year for UK purchasers in Spain with the benefit of an approximate 5% increase in currency purchasing power, and with an approximate 10% reduction in Spanish property prices.
Is the European Central Bank getting its way. Yes - the euro is weakening against a basket of major currencies and sterling strength around 1.28 is helping the would be purchaser from the UK. Combine the strong pound with low property prices and things are beginning to get interesting.
The pound is currently hovering around 1.26 to the euro and this increase since the beginning of the year has the stark effect of making property approximately 5% cheaper or, 5,000 euros cheaper for every 100,000 spent. The euro has been recently weakening against the dollar and many in the foreign exchange market believe that this trend will continue. Certainly the ECB want the euro to be weaker.
The jury is still out as to whether the euro will push higher against the dollar. The analysts are split in their opinion but at the moment the pound is still holding steady against the euro at and around 1.20. The UK economy is headlining better results in general with predidcted GDP growth for 2014 to be in the region of 2.5 percent. Probably the best outcome from the foreign purchaser point of view is that the currency relationships remain fairly steady providing more certainty when dealing in property transactions.
The pound has showed signs of weakness against the euro but it is probably more educated to say that the euro is extremely strong against most other currencies. Some euro leaders including the French are calling for a weaker euro and weaker data from the eurozone at the end of last month backed this assumption.
The pound is now pushing 1.20 against the euro and there remains good arguements that it will continue to push higher. The euro is relatively strong against other currencies including the dollar, but this is more likely due to dollar weakness than inherant euro strength.
Over recent months and since the last post in this section there has been little change to the situation although it can be agued that there is a little more certainty and stability in the market between the pound and the euro. At the same time the property market has continued to adjust lower and this remains a purchaser advantage.
FEBRUARY - 2013
In recent weeks the pound has become weaker against the euro. The economic reasons behind this are wide and varied although there is currently a global currency war at hand. The fundamentals for the euro remain strong in that the ECB have pledged to support the currency under any circumstances. The pound is currently around 1.16 per euro and this may weaken even more although in the long run the pound will strengthen. Meanwhile the decreasing property values in Spain are having a counter balance effect for the buyer of Spanish property.
The pound has strengthened against the euro considerably over the past couple of months and has reached as high as over 1.25. With the inevitable pressures being experienced in europe this trend is likely to continue and although the currency advisers will often say it is best to book into current rates in order to secure the rate of exchange which provides certainty; it should also be considered that there are no current economic reasons why the euro should not weaken further. With the pound strengthening and the property market in Spain under severe pressure perhaps there is an argument to wait a little more before taking the purchase plunge.
Once again the pound against the euro remains steady - is this stability a sign for future euro success. All eyes are on the Greeks!
The pound remains fairly steady against the euro and has not dropped below 1.19 since our last comment. There is debate as to whether the euro will get weaker. The technicians are saying that the massive continued intervention by the ECB and the possibility of lower interest rates should assert downward pressure on the euro. There is still a lot to play out in europe but there is a hint that buyers are returning to the Spanish property market as a europe break up seems less likely.