Pound hits 19 month high against Euro17th June 2014
The pound has rallied to a 19 month high against the euro in the wake of a speech by Bank of England Governor Mark Carney which referred to the forthcoming UK interest rate hike. The pound rose to 79.98 pence per euro, the strongest level since 13 Nov 2012 and it advanced for an eighth day versus the 18-nation common currency, its longest run of gains since April 2010.
“UK buyers have already been exploiting the value in the French market and the rising pound will only fuel this further,” comments Nicholas Leach at Athena Advisors. “Mortgage rates are at 70 year lows and property prices are still soft, so a strengthening pound completes the set.”
“Clients at all levels have been capitalising on the market, but the most activity is at the top end. Cheap lending and value in the Euro is proving too much for HNW buyers, especially those who have been sitting on the fence for a few years.”
In the last 8 months the cost of a €1.0m property has reduced by £60,000 (8%) from £850,000 to £790,000 due to currency shifts alone. The shift in French mortgage rates has also helped buyers. Average lending rates have now dropped to 2.85% from the previous lows of 2.90% recorded in May 2013.
John Busby at French Private Finance said:
“In France each €100k currently costs approximately €500 per month over 25 years, €600 per month over 20 years and €700 per month over 15 years. There’s never been so much value in the French market which is why high end buyers are returning in force.”