Fix your regular payments now
Less than two months into 2015 and we have already seen much volatility in the currency market, as affected as it is by political and economic events. All this has strengthened the GBP/EUR rate, making property in Europe an even more attractive investment for UK buyers – who can now spend significantly more euro for the same amount of sterling. For example, at the beginning of this year when the rate was 1.2876, a €300,000 property would have cost a British buyer £232,991; at today’s* rate of 1.3515, a €300,000 property would cost a British buyer £221,975 – a saving of over £11,000.
The euro has been undermined significantly by a number of events in January – the removal of the Swiss National Bank peg on 15th January, the EU’s announcement of a €1.1 trillion Quantitative Easing (QE) programme on 22nd January, and the widely predicted victory of Greece’s anti-austerity Sryiza party at the country’s elections – and with it the possibility of a Greek exit from the Eurozone. At the time of writing the jury is still out on this, and the euro remains volatile as talks continue.
While sterling currently remains strong against the weakening euro, experts are already looking towards the UK general election in May. The results of this are anything but a foregone conclusion, and if history is anything to go by there is likely to be a period of dramatic uncertainty for the currency in the weeks leading up to the voting. And recent events have shown just how much a currency rate can wobble over the course of a day, which will have a significant effect on any lump sum house purchases.
While the GBP/EUR rate is strong, it’s the perfect time to transfer your sterling into euros. And, if you transfer your money abroad on a regular basis, why not set up a Regular Payments Plan with Smart Currency? Not only will this save you time – because the money can be sent automatically every month or quarter, depending on your needs – but you can also protect your money from currency fluctuations during this volatile period by setting the exchange rate for all of your transfers for the year in advance. This means that even if sterling does fall dramatically around the general election in May, any transfers you make will still achieve the current great sterling-euro exchange rate, and you can plan you budget with price certainty.
A Regular Payments Plan is ideal for anyone who makes regular transfers abroad, whether it’s for your pension, mortgage payments, bills or anything else, and as a standing order instead of a direct debit, your first payment can be sent to your overseas bank account within days, instead of weeks!
Click here to find out about our currency options and to start monitoring the market for you.
*rate correct as of 19/02/2015