With the value of sterling finally beginning to rise against the single European currency, we are likely to see a shift in the type of deals that we have become accustomed to here in Spain.

During the last 6 months, with sterling in freefall and the Spanish property market in dire straits, it has seemed that most property transactions in the Brit-dominated areas such as the Costa Blanca and the Costa del Sol have consisted of a British vendor who is happy to trade with a strong euro, and a buyer from the eurozone, keen to snap up a Spanish property bargain and take advantage of the thousands of Brits making the exodus back to the UK.
Now it seems that the market is shifting. As the value of sterling roared back this week to over 1.17 euros, it seems that we need to prepare ourselves for the anticipated glut of British buyers who are ready to enter the Spanish property market at an exchange rate of 1.20

Breaking through the 1.20 rate would be great news for Brits seeking to buy in established areas like the Costa Blanca, with prices at pre-boom levels in some regions, but that may not be quite such good news for British vendors seeking to repatriate their funds to the UK. Perhaps we will see British sellers forced to up their prices to cover losses on the exchange rate, and perhaps the most prevalent transactions in the coming months will involve British buyers and Euro sellers.

Let´s look at how the shifting value of sterling has changed the face of the Spanish property market.

Example 1
January 2009 – exchange rate £1 = €1.02
Property price - €200,000 (£196,078)

Example 2
June 2009 – exchange rate £1 = €1.17
Property price - €200,000 (£170,940)
Buyer is better off by £25,138
Seller is worse off by £25,138

Example 3
If exchange rate is £1 = €1.20
Property price - €200,000 (£166,667)
Buyer is better off by €29,411
Seller is worse off by €29,411