Cash for continent

Britain's cash-rich investors are heading back to Europe in their droves this spring in a bid to bag a bargain in the Continent's falling property market...

Currencies Direct, a leading foreign exchange provider, has seen the number of its UK-based clients buying euros to purchase European properties leap sharply in the past few weeks, to double the figures compared with this time last year.

And there has been a 20 per cent increase in clients exchanging over £200,000 into euros with the largest transaction being £750,000 and the average £220,000.

With the majority of purchases taking place in the likes of Provence, Dordogne and the Alps, savvy investors are looking for sound long-term investments in traditionally strong markets like France, and moving away from riskier countries such as Bulgaria and Turkey which were popular before the economic crisis.

Mark O'Sullivan, Director of dealing at Currencies Direct, said, "In the last few weeks we have seen a dramatic increase in the amount of ‘smart money' entering the international property market.

"There have been a lot of wealthy Brits sitting on significant sums of cash in the last year and it appears that the recent sterling recovery, coupled with bouts of sunshine, has given investors a spring confidence boost.

"Savvy investors realise that despite the pound being 15 per cent weaker against the euro than this time last year, the 30 per cent discount they can haggle on a property's asking price means that their pound is now worth closer to €1.40 to €1.45."

Analysis reveals that European house prices have fallen on average by 25 per cent in the last 24 months.

At the same time, the firm has noticed there has been a 15 per cent month on month increase in British ex-pats selling Spanish properties since the turn of the year.

Mr O'Sullivan said, "Faced with the reality that Spain's economy is hitting rock-bottom, many ex-pats living in Spain are selling up and returning to the UK, content to recover what they paid for the property.

"The silver lining is that with the pound being lower against the euro than when most of them bought their properties, they are recovering some of the hit when they exchange the euros back into sterling."

Richard Dannreuther, Director at Euro Immobilier Chalais, a property agency based in Charente, mid-west France, said: "In the last month we have seen an increase in the number of buyers from the UK purchasing properties in the region. The majority of whom have cash or finance in place so they can take advantage of current low property prices.

"It seems that people have been waiting for the right time to invest and with house prices now 25 per cent lower than in recent years there are some fantastic investments out there for a cash-rich investor prepared to drive a hard bargain."

Source: Currencies Direct