Expats return from euro zone in droves

Foreign exchange broker, World First, has seen the number of clients bringing euros back to the UK double in the last 12 months. The dramatic drop in the value of sterling has resulted in many expats and second home owners selling up and coming home.

Elisabeth Dobson, head of private clients at World First says, “There are two main reasons why people are selling up and coming home. Firstly, a lot of second home owners are financing their property and life abroad on their sterling pension. The cost of living in the euro zone is now 20% more than it was 12 months’ ago. Unfortunately for some people, this is stretching their finances too far.

“Secondly, expats holding euros will now be feeling much better off, in sterling terms. Many people are liquidating assets in the euro zone to buy property or other investments in the UK as their money is going much further. UK property prices have fallen, and with interest rates in the UK at an all time low, financing a UK mortgage is no longer the strain on the pocket it once was.”

The UK is also seeing an influx of foreign nationals wishing to invest in the UK.

“We are seeing an increasing amount of interest from overseas investors taking advantage of the weak pound. Generally they are most interested in buying property. The legacy of this recession is that the UK may become a lot more cosmopolitan.” Elisabeth continues.

Despite the general strength of the euro against the pound, the foreign exchange markets remain volatile and European GDP figures have been worse than expected, with the euro losing strength against the pound immediately after the announcement.

“For those planning to do significant foreign exchange transactions, entering into a ‘currency option’, also known as a hedging strategy, is the best way to manage the risk of exchange rate fluctuations,” comments Elisabeth.

“A ‘currency option’ protects you by allowing you to secure a worst case rate now for a date in the future, such as the completion date for a property purchase or sale. At the same time you are able to benefit should the exchange rate move in your favour between now and then. As a result you will get more for your money, for example a property may end up costing you less than you thought or you may make more from the proceeds of a property sale than expected.”

For more information, visit worldfirst.com