The rise of the 'euro menace’

Investors are apparently finding it increasingly difficult to buy property in Europe...

Analysts claim that the rising strength of the euro - which has risen 15% against the pound since September - is adding to the cost of buying property and creating an unwanted headache for prospective investors.

Overseas property experts Baydonhill PLC estimate that on average, house prices in France and Spain now cost an extra £26,000 - a steep increase from £133,600 to £160,000.

Wayne Mitchell, CEO of Baydonhill said: "Over the past year, the euro has strengthened dramatically and seems set to continue to rise. With the pound currently at an all-time low against the euro, the implications for those thinking of buying a house abroad on a tight budget are worrying".

Slowdown in normal sales rates

Tighter mortgage conditions for borrowers are also causing problems for those looking to invest overseas.

James Price, Head of residential development at Knight Frank told the Times: "There has definitely been a slowdown in the normal sales rates that one might expect. It's taking longer to get people to commit. There needs to be a compelling reason for them to buy abroad".

“The coming year could also see a gradual slowing of price growth in the main international buying destinations, especially France, Italy and the Caribbean. Having said that, buyers can ensure they achieve the lowest price possible by fixing the exchange rate at the start of the contract”.

French property agents VEF UK also argue that all is not lost for buyers, telling clients on its website: "the market in France, albeit growing, is more realistic than this time last year and there is a high chance that you could re-coup what you have lost by the weakening sterling with the price negotiation on the French property".