Even a relatively small currency shift can have a big impact when you're buying or selling property worth hundreds of thousands of dollars.
Say you're paid in US dollars (or dirhams), and last November you spotted the ideal property in Spain for ?200,000. At the time, US$1 bought ?0.67, which meant the property would have cost $298,500 before charges. In March, with the dollar worth ?0.73, that property would cost $274,500, a savings of $24,000.
People who own property overseas are exploiting currency swings to offset their losses from falling housing markets. Property prices in Spain, a hugely popular second-home market, have plunged by between 30 per cent and 50 per cent, but British owners are using the equally large drop in the value of the pound to offset their losses, says Les Calvert, director of Property Abroad, a UK-based website that helps people buy, sell and rent property around the world.
"Many of our clients have properties in Spain, where property prices have fallen sharply. But many are selling up now to take advantage of the euro's relative strength against the pound. After they have converted their sale proceeds back into sterling, they have recouped most of their losses."
Property is an illiquid investment, and timing a sale to match currency movements is tricky. Buying also takes time, but you can benefit from attractive currency rates by transferring money ahead of your purchase.
Many property buyers mitigate risk by remitting, say, 50 per cent of the necessary funds immediately and the rest when spot rates become favourable, says Mark Bolsen, head of the currency trading desk at Travelex, the foreign exchange specialists. You can also hedge against future movements by fixing your exchange rate now, then making monthly transfers at that rate for up to two years. That way you can lock into a favourable rate, even if you don't have all the money to hand.
"Recent extreme currency shifts have alerted people to the dangers of being exposed to an overseas currency," says Mr Bolsen. "The difference between £1 buying $1.64 and $1.50 is huge, and that has shifted in just a few weeks. Risk aversion is back."
When buying property overseas, you also have to decide which currency to use for your mortgage, says Mr Clarke of Dubai-IFA.com.
"If you have a euro-denominated mortgage, it can be risky servicing that from a dollar or sterling income. If possible, you want your mortgage in the currency you earn in. But it depends on your personal circumstances. If you plan to pay the mortgage on a holiday property in Spain by renting it out to tourists and charging euros, you probably want a euro mortgage."
With sterling weak, now may seem an attractive time to buy property in the UK, says Mr Clarke.
"But if you take out a mortgage in sterling, could you still afford it if the pound strengthens in two or three years' time? When dealing in different currencies, you always have to be two steps ahead."
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Key recommendations
- Fewer criminals put behind bars and more to serve sentences in the community, with short sentences scrapped and many inmates released earlier.
- Greater use of curfews and exclusion zones to deliver tougher supervision than ever on criminals.
- Explore wider powers for judges to punish offenders by blocking them from attending football matches, banning them from driving or travelling abroad through an expansion of ‘ancillary orders’.
- More Intensive Supervision Courts to tackle the root causes of crime such as alcohol and drug abuse – forcing repeat offenders to take part in tough treatment programmes or face prison.
BMW M5 specs
Engine: 4.4-litre twin-turbo V-8 petrol enging with additional electric motor
Power: 727hp
Torque: 1,000Nm
Transmission: 8-speed auto
Fuel consumption: 10.6L/100km
On sale: Now
Price: From Dh650,000
BIO
Favourite holiday destination: Turkey - because the government look after animals so well there.
Favourite film: I love scary movies. I have so many favourites but The Ring stands out.
Favourite book: The Lord of the Rings. I didn’t like the movies but I loved the books.
Favourite colour: Black.
Favourite music: Hard rock. I actually also perform as a rock DJ in Dubai.
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WOMAN AND CHILD
Director: Saeed Roustaee
Starring: Parinaz Izadyar, Payman Maadi
Rating: 4/5
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GAC GS8 Specs
Engine: 2.0-litre 4cyl turbo
Power: 248hp at 5,200rpm
Torque: 400Nm at 1,750-4,000rpm
Transmission: 8-speed auto
Fuel consumption: 9.1L/100km
On sale: Now
Price: From Dh149,900
Specs
Engine: 51.5kW electric motor
Range: 400km
Power: 134bhp
Torque: 175Nm
Price: From Dh98,800
Available: Now
Specs%20
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The biog
Place of birth: Kalba
Family: Mother of eight children and has 10 grandchildren
Favourite traditional dish: Al Harees, a slow cooked porridge-like dish made from boiled cracked or coarsely ground wheat mixed with meat or chicken
Favourite book: My early life by Sheikh Dr Sultan bin Muhammad Al Qasimi, the Ruler of Sharjah
Favourite quote: By Sheikh Zayed, the UAE's Founding Father, “Those who have no past will have no present or future.”
Crops that could be introduced to the UAE
1: Quinoa
2. Bathua
3. Amaranth
4. Pearl and finger millet
5. Sorghum
Europe’s rearming plan
- Suspend strict budget rules to allow member countries to step up defence spending
- Create new "instrument" providing €150 billion of loans to member countries for defence investment
- Use the existing EU budget to direct more funds towards defence-related investment
- Engage the bloc's European Investment Bank to drop limits on lending to defence firms
- Create a savings and investments union to help companies access capital
Abu Dhabi Sustainability Week
Volvo ES90 Specs
Engine: Electric single motor (96kW), twin motor (106kW) and twin motor performance (106kW)
Power: 333hp, 449hp, 680hp
Torque: 480Nm, 670Nm, 870Nm
On sale: Later in 2025 or early 2026, depending on region
Price: Exact regional pricing TBA
The Voice of Hind Rajab
Starring: Saja Kilani, Clara Khoury, Motaz Malhees
Director: Kaouther Ben Hania
Rating: 4/5
Yahya Al Ghassani's bio
Date of birth: April 18, 1998
Playing position: Winger
Clubs: 2015-2017 – Al Ahli Dubai; March-June 2018 – Paris FC; August – Al Wahda
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Killing of Qassem Suleimani
LEADERBOARD
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Specs
Engine: Duel electric motors
Power: 659hp
Torque: 1075Nm
On sale: Available for pre-order now
Price: On request
COMPANY%20PROFILE
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