We have all seen a media frenzy since the USA chose to elect Donald Trump as their president. While there are many opinions as to what this new era of a US Government might bring, the currency markets will reflect true investor sentiment.
IFX, powering the Fine & Country FX service, provides below an overview informing British clients what these current market conditions mean for the current GBP value of their overseas holiday homes. Since the 8th of November the weak GBP we have become accustomed to since the Brexit referendum has started to waver.
What will this mean for owners of...?
Second Homes in the USA
Florida has long been a magnet for investment in the USA. With amazing value for your money, access to beautiful beaches and Disneyworld, it's no surprise that Brits love to buy here. This time last year a $500,000 home would have been worth £328,000 at a rate of 1.5231 – this in October hit a low of 1.20. Now, it has started to graduate up since the US Election. However, overall, it is a much more favourable GBP value - year on year.
At the moment GBPUSD is at mid-market level of 1.2350 – this sees a $500,000 home hold a GBP value of £405,000.
For a rental income of $2,000, this will equate to a repatriated £1,620.
Second Homes in Europe
While there may not be any immediate effect on the EUR value of properties in Europe, the currency market movements since the election have meant that UK clients are slightly down on the GBP value of their home in Europe. On the bright side - movements also mean those looking to invest will get a little more EUR for their GBP. With this, the market could pick up with a reflection in property value. In comparison to this time last year, however, you are in an extremely good position as you are 21% in your favour.
At the moment GBPEUR is around mid-market levels of 1.1650 meaning a €500,000 property is still worth £429,000.
For rental income – of €2000 at a rate of 1.650 – this equates to £1,715.
Second Homes in South Africa
The South Africa Rand in general can be very volatile. Taking the average 16.90 rate for October, to the now rate of 17.70 – this equates to a GBP value difference of 4.7%.
There is still a silver lining to this cloud though. To compare to this time last year, with the GBP weakness since the vote for Brexit, you are actually still 21% better off.
At the moment GBPZAR is at mid-market levels of 17.70, meaning a ZAR 8,850,000 valuation will still get you £500,000.
For any rental incomes of ZAR18,000 – you will still see £1,016 revenue.
If your international home is already on the market, and you would still like to discuss the options to take advantage of the current weaker sterling, please contact:
F&C FX help desk at IFX on 0203 3017261
If your home is not yet on the market and you would like to receive a valuation, please contact Fine and Country.