Unseasonal boom in Brits buying abroad

The record breaking downpours which made June and July the wettest since records began has led to a rush of people looking to acquire a place in the sun. The latest HiFX Monthly Global Property Hotspots Report reveals almost double the interest this summer compared to last year with property enquiries up in June by 46% and July by 40%. With no sign of the hoped for Indian Summer in sight, currency expert HiFX is predicting a continued increase in enquiries over the next couple of months, leading to a boom in overseas property sales in 2008.

Figures released by the Met Office have made it the wettest May to July since the England and Wales Precipitation record began in 1766. These figures will come as no surprise to many across England and Wales who have suffered flooding from the exceptionally heavy rainfall experienced in June and July. Mark Bodega, at HiFX, comments, “The summer months are traditionally a quieter time in terms of property enquiries as people tend to be away on holiday; we usually see an uplift in enquiries from September onwards, when Brits come back from holiday, dreaming of owning their own place in the sun. This year, anyone choosing to holiday in the UK will no doubt have been extremely disappointed with the weather which may have prompted the rush of enquiries we have seen over the last couple of months.”

While more Brits are looking to buy abroad, the favoured destinations are closer to home again. This month’s figures show an increase in enquiries to old favourites France, Italy and Spain, as well as the slightly more exotic Morocco, Cyprus and Turkey.

Bodega continues, “People buy property abroad for many different reasons but a depressing British summer is enough to spur any overseas property buyer or investor into action. However, buyers should not be dazzled by the promise of a place in the sun and forget to consider carefully the currency risks associated with buying a property abroad – currency fluctuation can make a huge difference to the amount of money you pay and protecting yourself from these fluctuations should definitely be part of the planning process.”

HiFX, help over 30,000 people buy and sell currency each year, recommend property buyers protect themselves by locking into current exchange rates by use of forward contracts. In essence, a 'forward contract' means that you can buy the currency now (locking into a favourable rate), and pay for it later. To do this, all clients are required to pay is a 10% deposit upfront and the 90% balance upon the maturity of the contract (up to two years into the future).

Bodega concludes, “We always remind people that they would never agree to buy a property in the UK if they did not know how much it was going to cost them; if you agree to buy an overseas property without fixing the exchange rate at the outset, that's exactly the gamble you are taking.”