...if property investors purchase in pounds, their money is not going to stretch as far in Europe as it did back in the summer of 2012.
(PRWEB UK) 8 March 2013
Commenting on the recent fall in the value of the Sterling against the Euro and how this may have an effect on property investment in Europe, Colordarcy analysts said, “The knock-on effect of this lack of faith in the UK economy is beginning to show itself with a falling pound and it is also likely to make borrowing even tougher with the money markets showing less confidence in the country than they were.”
Loxley McKenzie, Managing Director of Colordarcy added, “The UK had managed to avoid the fate of France and the US in being downgraded, however after months of speculation it now finally joins them in sin bin.
On a positive note, the US has managed to recover from its own downgrading with property in Florida growing in double digits in some areas, however the effect on the UK is less certain and credit downgrades certainly didn’t do Spain and Italy any favours.
In any case, most investors understand that buoyant property markets need healthy economies underneath them and, unfortunately, there are signs that the sea is getting choppy around the UK once again.
It is also the case that if property investors purchase in pounds, their money is not going to stretch as far in Europe as it did back in the summer of 2012.”
Colordarcy analysts expect the falling pound to have two main impacts on overseas property investors – the first of these will be a weakening of spending power and the second, a narrowing of choice.
Those investors thinking of investing their hard-earned pounds in European property at the moment, or even those property investment deals on the Spanish coast may not seem as appealing as they did 12 months ago no matter what an agent says.
Not only is the value of property falling in most European countries, so too is each pound when it comes to buying that villa with a sea view, say Colordarcy.
So what’s the answer? Do investors decide to invest in property in the UK or overseas beyond Europe to protect their wealth?
The problem with the UK at the moment is that while an upturn in property prices is underway, the medium term outlook is less certain. The recovery in most parts of the UK is weak at best and with an economy that is struggling with weak exports and a falling pound, the breaks may well be put on soon with people struggling to cope with rising prices and static incomes.
If investors wish to make a decent return on property investment, then naturally it comes down to looking at markets where the pound goes further and where the returns far outweigh the investment they put in, added McKenzie.
Florida and Istanbul currently offer investors outstanding value for money. Despite the pound falling against the Euro of late (Source: BBC, Pound Continues To Weaken Against The Dollar And The Euro, February 2013) – it hasn’t fallen as much against the Turkish Lira or the Dollar (Source: XE.com Statistics).
Smart investors who enter the Istanbul and Florida property markets early this year stand to gain far more than would be lost on simple currency moves including double-digit capital growth and strong rental returns.
Notes to the editor:
Colordarcy is a leading property investment company that specialises in finding positive cash flow investment properties worldwide. Colordarcy investment property portfolio includes some of the best properties for sale in Brazil, Florida, Turkey and the United Kingdom.
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