British spend on euro zone property has halved in 2017
Weak pound has contributed to decreasing UK appetite for overseas property
A fall in the value of the pound has led to a reduction in British spending on euro zone property. Photograph: iStock
British spending on property in the euro zone has more than halved in the first three months of this year due to the fall in the value of the pound, according to data released by Fexco.
The low point was in January when transaction values slipped to 78 per cent below the same month in 2016. Transaction levels in February 2017 recovered slightly to close out the month 42 per cent lower than the same period a year earlier.
The improving trend continued in March, with transaction values up by 24 per cent on February.
“While the triggering of article 50 has brought no greater insight on what the final Brexit deal will look like, the start of the divorce process has at least injected some reassurance into the market. For now it is returning confidence – rather than new clarity – which is spurring would-be buyers into action,” said David Lamb, head of dealing at Fexco corporate payments.
The analysis also shows that Britons have cancelled all but essential payments for European property including mortgage payments, maintenance or management fees.
Mr Lamb suggests that buyer confidence was initially dented on the back of the weak pound and fears about whether UK citizens could face restrictions on living in an EU country after Brexit.
He said those concerns mean would-be investors should consider a currency hedging strategy to ensure they get the best value for their investment. “No one wants to buy an overseas property only to discover they could have got it cheaper if they had waited.”