If you’re planning to buy a home in the next 12 months, your pounds are balancing on a seesaw right now. Here we run through seven plausible Brexit scenarios and analyse the likely affect on the exchange rate. Don’t think this just applies to the GBP/EUR. Every GBP currency pair will be affected. What happens in Westminster next could be critical to your purchase*.
*(or you could just take out a forward contract and enjoy life!)
Purchasing overseas during and after Brexit
For anyone making a major transaction such as buying a property abroad in 2019, what is happening in Westminster right now is of more than passing interest. Whether it’s the fate of the Withdrawal Agreement, the mathematics of the House of Commons, the survival of Theresa May as PM, it will all affect how much your home abroad costs, or whether your income from the UK will be hit when you’re living abroad.
A week or two ago the pound was within a whisker of hitting its highest rate for 18 months, before falling nearly 3%. For anyone buying a €200,000 home, Brexit could have cost you £5,000 last week, if you had not acted to secure the rate with a forward contract.
You can see the affect of this at Propertyguides.com’s property listings. The price at the bottom of the listing shows you how currency movements would affect the price.
What will be the likely affect on the pound if the following scenarios play out? All are entirely plausible. Of course, we cannot make firm predictions on the likely impact on the pound. Brexit is not happening in a vacuum, and isn’t the only game in town even within the EU. But, all things being equal, this is what is most likely to happen.
Protect your budget from volatility
Of the seven scenarios, the majority lead to a weakening strength of the pound. When the UK said it would leave, the pound fell by between 10 and 20%. Could this happen again with no deal. Many financial analysts say it could, with predictions of parity against the euro, or worse.
That is why we urge readers who are serious about buying abroad, or who have moved abroad and whose income depends on a strong pound, to call their trader today.
It is still possible to lock in a good exchange rate for up to a year, on payment of a 10% deposit. It is called a forward contract. Speak to your Personal Trader to find out more on 020 7898 0541.
