The credit crisis is taking its toll on property abroad. According to reports, foreign currency specialist FC Exchange has revealed that the number of people cashing their overseas property back into Sterling has risen by 20 per cent in a year.
As the credit crunch continues to hit the UK hard, the Euro has gained strength against the pound, and for those who have invested in property
abroad, the temptation is proving too much.
FC Exchange MD, Nick Fullerton told reporters: "A property in the Eurozone being sold at €200,000 would give its owner in the region of £162,500 back – that's roughly a £27,000 increase from this time last year."
And, as house prices in the UK look set to fall, and stamp duty is temporarily abolished for homes costing less than £175,000, now could be a good time for those with overseas property
to think about selling up and buying in the UK with the profits made from the strong Euro.
Mr Fullerton told What Investment that foreign currency exchange
is an important factor to consider before buying or selling abroad. He said: "Currency is a massive factor and it is worth thinking about it before making any firm decisions. Ask yourself how much the property might be worth in three years' time."
Offering advice on making the best profit from property abroad, Mr Fullerton added: "Stay away from saturations and new builds. Spain for example is not magnificent, as there is an excess of new builds in the country. Dubai too, is going that way: they are chucking up buildings fast and it is becoming saturated.
"France remains a solid investment, despite its popularity. While the cost of a holiday home in France may be more expensive, there is steady growth in France and it offers more consistency."
Meanwhile, those looking for a mortgage of more than £1million are also turning to property abroad
amid the credit crunch. France and Italy have proven particularly popular, according to Investec Private Bank.
Speaking to the FT Adviser, Investec spokesman Andrew Arnott, said: "As the UK housing market slows down, many high net worth individuals are increasingly looking to purchase overseas property as they see them as representing a better investment potential."
© Fair Investment