Real Estate - Exchange advantage - by Faith Glasgow
The dramatic slide of sterling against the euro and other currencies since the start of last year has created big winners and big losers in the world of residential property. In the former category are international buyers in the UK, and especially in London, who are combining falling prices with improved exchange rates to secure deals that cost them 40-50 per cent less in their own currencies than they would have a year ago. In the latter are British buyers abroad, who can no longer afford the gîtes and haciendas they once coveted or have found themselves struggling to cover the monthly payments on their foreign-currency-based mortgages.If that is one silver lining to the euro’s strength, another is that European developers are also now offering “generous discounts” to sterling buyers, says James Hickman of Caxton FX. “Others have introduced a scheme where buyers pay a small deposit but then defer the rest of the payment for up to five years and pay only interest on it meanwhile,” he says. Julian Cunningham of estate agency Knight Frank confirms that such “solutions” are increasingly common. “It depends on the developer’s situation but typically at least 75 per cent [of the purchase cost] is postponed,” he says. “That gives buyers time to plan their finances. It’s not a new initiative but now it’s a key element of any deal.”
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