The amount spent on European property by Britons has increased by two thirds. That is according to data released by international money transfer firm Fexco Corporate Payments.
Its research found that Brits spent 66% more in sterling terms on Eurozone property in the first four months of 2018 compared with the same period last year. By contrast, the total sterling value of property transactions made in the first four months of 2017 was down 69% on the same period in 2016 – affected heavily by the EU referendum and the drastic fall in the value of sterling.
The analysis, which looked at almost 1,000 Euro transactions made by UK customers through FEXCO Corporate Payments, seems to suggest that the British love affair with owning a property in the sun is being reawakened by sterling’s improving fortunes.
During the first four months of 2018, the total sterling value of transactions was just 10% down on the level seen in 2016.
The research also revealed that new property purchases are on the decline, with the majority of property-related funds being sent by Fexco to the Eurozone used for clients’ ongoing financial commitments - such as mortgage payments, maintenance or management fees.
This is starting to change, though, with the number of new property purchases rising again since the start of 2018. Consequently, the average size of transaction recorded by Fexco has gone up by more than double, from £9,108 in the first four months of 2017 to £22,515 in the first four months of this year as more home acquisitions were made.
Overall, the number of property transactions has gone up as well, with Fexco recording 15% more transactions between January and April 2018 than it did in the first four months of 2017.
“The resurgence of British buyers’ appetite for European property shows the enduring appeal of a place in the sun,” David Lamb, head of dealing at Fexco Corporate Payments, said.
“Yet a holiday home is the ultimate discretionary purchase, and last year many would-be buyers put their plans on hold as the sharp fall in the value of the pound made Eurozone property more expensive.”
He said sterling had made steady gains against the Euro in 2018, with the pound hitting an 11-month high against the single currency in April. This return to form has, Lamb explained, inspired many of those who dream of owning a home away from home in Europe to take the plunge.
“Nevertheless as Britain’s economy faltered at the end of April and start of May, sterling felt the pinch and slid two cents against the Euro within just a few days,” Lamb added. “While no-one chooses to buy a home abroad based on the exchange rate alone, such volatility means anyone planning to invest should consider a currency hedging strategy to ensure they get the best value.”