GBP/Euro advice
Discussion
No-one really knows the answer to that one.
I bought a ski apartment in late 2016 & people told me I was nuts as the rate I got was 1.13 and it had been in the 1.30's earlier in the year - but it's pretty much stuck around the same level ever since.
If you're speculating then it's one thing, but if it's a real life purchase, there's not much you can really do IMHO - pick a date & do a transfer, or spread it around & average it out.
I bought a ski apartment in late 2016 & people told me I was nuts as the rate I got was 1.13 and it had been in the 1.30's earlier in the year - but it's pretty much stuck around the same level ever since.
If you're speculating then it's one thing, but if it's a real life purchase, there's not much you can really do IMHO - pick a date & do a transfer, or spread it around & average it out.
JeffreyD said:
If it's going to be something large enough to hurt if it goes south I'd be tempted to wait for the covid fallout to be clearer.
That should also give time for brexit to work through the market as well.
Potential for some bargains in the near future
I think you’ve hit the nail on the head. Wait for the bargains. Spain’s already at -0.3% (or was when I lost checked). That should also give time for brexit to work through the market as well.
Potential for some bargains in the near future
Insurancejon said:
possibly buying a property in Spain or Malta as a bolthole, but wondering what peoples thoughts are as to where the euro will end up over the next 3-9m? would it be worth buying a load now, or wait a couple of months?
Who knows? Once you find the house just buy it, you'll always have a reason to dither and stall and never end up buying if waiting for the perfect time.
Insurancejon said:
I think you’ve hit the nail on the head. Wait for the bargains. Spain’s already at -0.3% (or was when I lost checked).
Its worth remembering that in Spain, houses typically sell at a 10% discount to the asking price, but then you have about 10% transaction fees on top of the price actually paid.Both the house price market & the currency market will move - maybe in your favour - maybe not.
No-one really knows which way - plenty of people with opinions, but there's plenty of variables that can change.
All you can really do is find a place you like for a price you're happy to pay & get on with it.
No-one really knows which way - plenty of people with opinions, but there's plenty of variables that can change.
All you can really do is find a place you like for a price you're happy to pay & get on with it.
rdjohn said:
Insurancejon said:
I think you’ve hit the nail on the head. Wait for the bargains. Spain’s already at -0.3% (or was when I lost checked).
Its worth remembering that in Spain, houses typically sell at a 10% discount to the asking price, but then you have about 10% transaction fees on top of the price actually paid.The Spanish, however, rarely entertain less than asking. Similar when buying cars.
FWIW Brexit might see less U.K. buyers, albeit reports were of covid/wfh opportunities bringing more enquiries than ever from Brits. However, the real influx in recent times has been the Scandinavians and the Russians. No sign of that diminishing and they have plenty of money. I’m not seeing any house price reductions locally and, if anything, I’d say a steady increase.
As for the original question, I think the rate will remain pretty flat but, if anything, the £ has further potential gains. I wouldn’t be in any rush to convert to €.
However, as a previous poster said, you could do it in stages to flatten any fluctuations. I did that when I bought my place, albeit you obviously kick yourself when you can’t equal the best rates you got along the conversion road.
For now I maintain as little as I can in € as per the above. I convert only what I need. Except for a small share portfolio I have in my Spanish bank account in €, all my other investments are in £. I’m confident the £ will make further gains and only then do I propose moving any of it to €.
However, as a previous poster said, you could do it in stages to flatten any fluctuations. I did that when I bought my place, albeit you obviously kick yourself when you can’t equal the best rates you got along the conversion road.
For now I maintain as little as I can in € as per the above. I convert only what I need. Except for a small share portfolio I have in my Spanish bank account in €, all my other investments are in £. I’m confident the £ will make further gains and only then do I propose moving any of it to €.
Carbon Sasquatch said:
Both the house price market & the currency market will move - maybe in your favour - maybe not.
No-one really knows which way - plenty of people with opinions, but there's plenty of variables that can change.
All you can really do is find a place you like for a price you're happy to pay & get on with it.
I’d agree with that advice. No-one really knows which way - plenty of people with opinions, but there's plenty of variables that can change.
All you can really do is find a place you like for a price you're happy to pay & get on with it.
Adding in a purchase in a different currency to which you hold adds an interesting angle to house purchases abroad.
Your property can rise 50% in value but if the local currency falls 50% against the pound (assuming you are repatriating the proceeds) then your house price gain is zeroed.
My plan had always been to live half and half between the U.K. and Spain. No regrets although I just hope transport between the 2 will open up again soon.
I figure if I wasn't planning on buying a house I wouldn't be speculating on Forex so anything I lose transferring money for a deposit isn't really any different from me not trying to make money on Forex. Or something like that.
That said I'm earning in Euros and planning to use the minimum about of Pounds that I can, on the grounds that Pounds I convert to Euros now have the potential to loose a lot more value if the pound recovers than I'll spend on interest on the larger mortgage.
That said I'm earning in Euros and planning to use the minimum about of Pounds that I can, on the grounds that Pounds I convert to Euros now have the potential to loose a lot more value if the pound recovers than I'll spend on interest on the larger mortgage.
NickCQ said:
Getting a local currency mortgage will hedge out some of the currency risk
That's how we did it (Portugal) in the end. Getting a recommended local mortgage broker/advisor is essential.I don't know what the exchange rate will do but I can see southern european tourist-area property getting cheaper over the next year or so, at least until vaccinations allow the holiday industry to recover.
As has been said, there are plenty of variables involved to try second guessing the rate. I've been doing this for 13 years and don't often tell myself "oh, I guessed that right"
Buying in bits is often a good strategy for those who don't want to be watching the rates daily or even weekly ... I'd be saying to the OP to do that, but perhaps when closer to the property viewing stage.
If the OP does want to speak to an overseas mortgage broker, I've been working with one for ten years who I would recommend.
Buying in bits is often a good strategy for those who don't want to be watching the rates daily or even weekly ... I'd be saying to the OP to do that, but perhaps when closer to the property viewing stage.
If the OP does want to speak to an overseas mortgage broker, I've been working with one for ten years who I would recommend.
andy43 said:
NickCQ said:
Getting a local currency mortgage will hedge out some of the currency risk
That's how we did it (Portugal) in the end. Getting a recommended local mortgage broker/advisor is essential.I don't know what the exchange rate will do but I can see southern european tourist-area property getting cheaper over the next year or so, at least until vaccinations allow the holiday industry to recover.
Carbon Sasquatch said:
I'd rather have a mortgage in a currency that matches my income.....
Depends what your "repayment vehicle" is. If you intend to amortise it down to zero through monthly payments I agree, but if you are relying on selling the property for the bulk of the capital repayment then you net off FX risk by borrowing in the property's currency. For a holiday home that you might only want for 10 years / particular phase of life the latter seems more appropriate.Euro interest rates are so low that the monthly interest payments are sort of irrelevant.
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