Do you intend to buy a property in the Mediterranean to retire this year, either in Benalmadena with its golden beaches, or in bustling Jerez de La Frontera? If so, wherever you buy property on the Iberian Peninsula, you can get your new life in the Mediterranean off to an extra-special start, because the pound to euro interbank exchange rate has jumped this week, as high as 1.1126, its strongest since August 2nd, or 6 weeks.
Given this, when you transfer money from the UK to your Spanish or Portuguese bank account, you'll receive a far higher euro total, helping you to buy your ideal Mediterranean home!
Pound rises, as UK inflation hits 5-year high
Why has the pound jumped against the euro, cutting your costs for when you buy a property in the Mediterranean, to enjoy the sun? Well, it's because UK inflation rose +0.3% in August, to 2.9%, its joint-highest in more than 5 years, according to the Office for National Statistics this week.
Given this, the Bank of England now looks likelier to hike interest rates above their current 0.25%, to ease rising price pressures in Blighty. In turn, this has given sterling a welcome boost, benefiting you whether you plan to buy a property in Spain or Portugal to relax on the playa, try some paella, or drink sangria.
Euro may weaken, as ECB’s Cœuré jawbones euro
What's more, looking ahead, sterling could continue to blaze a trail versus the Eurozone's common currency, making your property in Benalmadena, Jerez, or the Algarve more affordable for you. The exchange rate could get a leg up, because this week European Central Bank executive Benoit Cœuré has talked down the euro.
To be specific, in a speech in Frankfurt, Mr. Cœuré mentioned the exchange rate a mind-boggling 48 times, suggesting that he's very keen for the euro to drop. In turn, as the euro comes under pressure, buying a Mediterranean property falls in price for you!
5 tips to get a brilliant exchange rate
With all this in mind then, it's looking like a fantastic time to buy a retirement property on the Iberian Peninsula, as the exchange rate is on the up! Given all this, how can you ensure you transfer money from the UK to your Spanish or Portuguese bank account at an outstanding rate, to lift your euro total? Well, here are some quick tips. Keep them in mind to take the stress out of your money transfer!
1. Plan your money transfer in advance.
This is because the sooner you start looking at buying euros, to buy your beautiful home in Spain or Portugal, the bigger a window you give yourself for a favourable exchange rate to arise!
2. Accept a good exchange rate as soon as it becomes available.
When we transfer money, it's tempting to try and exchange currencies at the "peak" of the market, to get the most euros. The thing is though, the exchange rate is highly volatile, and a rising pound can quickly fall. With this in mind, to get your target euro total, transfer your money to Spain or Portugal as soon as a favourable exchange rate comes up!
3. Use a specialist currency broker.
This is because a dedicated foreign exchange dealer will get you an exchange rate far superior than your high street bank. In turn, you'll receive far more euros, to buy the property you've had your eye on in the Mediterranean!
4. Seek guidance from a friendly, professional currency dealer.
Is this your first time transferring abroad a significant sum of money? If so, you may have questions about how the transfer process works, or what's affecting the exchange rate. If this is the case, speak to a friendly, professional currency dealer. They'll answer your questions in straightforward language!
5. Protect yourself against currency volatility with a forward contract.
Are you concerned that the exchange rate may wobble, between now and when you intend to buy your property in Spain or Portugal? If so, you can fix your exchange rate in advance, with what's called a forward contract. This locks in your exchange rate, protecting you from pound volatility down the line!
With these tips in mind, you'll get a fantastic exchange rate, to lift your euro total to buy your Mediterranean property. Enjoy your retirement in beautiful Spain or Portugal!
By Peter Lavelle at foreign exchange broker Pure FX
+44 (0) 1494 671800
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