Buying a home in Marbella? Then the exchange rate is on your side!
Guest post by Peter Lavelle of foreign exchange broker Pure FX http://www.purefx.co.uk
Howdy! In this article I'll tell you how the favourable exchange rate can help cut the cost of buying a property in Marbella, and why the pound may soon fly higher versus the euro.
Everyone knows that realising your dream of owning a home in Marbella isn’t necessarily cheap. There’s the cost of the property itself, the fees you pay to the real estate agent, home insurance costs, and so on. With this in mind, every little helps, as the saying goes, so it may interest you to learn that a favourable exchange rate can help to bring down your costs, when you buy a Marbella property.
For instance, just recently the pound touched 1.35 against the euro, a full +15 cents higher than back in January 2014. What this means is that, when you transfer money to Spain to realise your dream of buying a Marbella property, you’ll receive a significantly higher euro total. Hence, this high pound to euro exchange rate can help to relieve the financial burden of buying a home in Marbella!
Moreover, you may like to hear that there’s an excellent chance that sterling will continue to strengthen against the common currency, making a Marbella home even more affordable. This is because:
1. The 19-member Eurozone has just returned to deflation
Prices fell –0.1% in September, according to the European Central Bank. While this may sound great, a bit like a Summer sale maybe, it’s actually indicative of Europe’s economic stagnation. If prices are falling, it’s because businesses are cutting them out of desperation, to try and get people to buy more. So, this may weaken the euro!
2. Germany exported a whacking –5.2% less last month
This was totally unexpected, and tells us that the Eurozone’s largest economy is in far worse economic shape than anyone had thought up until recently. Of course, Germany is Europe’s economic motor, so when Deutschland sinks, it takes the rest of the continent with it! This could also bring down the common currency in the near future.
3. The International Monetary Fund just upgraded its forecast for UK economic growth in 2015
The IMF now thinks that Blighty will expand +2.5% this year, +0.1% more than it had pencilled in 6 months ago. If this proves right, it will make the UK among the fastest-growing major economies in the world for the 3rd year on the trot. And that good news might just strengthen the pound!
4. The Bank of England looks set to hike UK interest rates in early 2016
UK borrowing costs have of course been stuck at 0.5% for more than 6 years now, ever since the depths of the financial crisis. Were the Old Lady of Threadneedle Street (as the central bank is affectionately known) to raise them, it would signal that Britain’s economy is back on its feet, big-time. And that could boost sterling!
So given these 4 points, the pound may strengthen even further versus the euro, thereby further cutting the cost of buying a Marbella property! Good luck!
By Peter Lavelle, of foreign exchange broker Pure FX. Peter has worked in foreign exchange for 5 years. Before that, Peter got his MA in English Literature at the University of York. He’s lived in Madrid since the start of 2012, and is bilingual in Spanish. Interesting facts? Peter was in Beijing for the 2008 Olympics, and was once run over by former England goalkeeper David Seaman.