bargain property exchange rate property in spain spanish mortgage spanish property a
Sterling has weakened alarmingly over the last 12 months. From its near-peak of 1.45 euros in summer 2007, the rate is now nearer to 1.18 euros. This effectively means that property in Spain is now almost 20% more expensive that it was just a year ago.
The problems with sterling have undoubtedly contributed to the worsening Spanish property market, particularly when you consider that British buyers make up by far the largest single group of overseas buyers. There are simply fewer British buyers now in the market for Spanish property, reluctant to secure an asset that would have been 20% cheaper a year ago.
The current situation is proving frustrating for a lot of prospective purchasers, all keen to bag a bargain property in Spain as the prices have tumbled, yet still reluctant to buy a euro asset with their weak sterling.
However, there are opportunities for buyers to take advantage of the situation.
1. Target properties that are owned by Brits, as they may be sending their proceeds straight back to the UK
2. Take a Spanish mortgage in euros to minimize exposure to unfavourable exchange rates
3. Target developers who will accept payment in sterling
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