Since the beginning of 2015 your dream home has become up to 15% cheaper purely on exchange rate movement. GBP/EUR hit a high of €1.4407 on the 18th July. If you were looking at converting £300,000 at the time compared to the start of the year you could have gained yourself an extra €57,000.
Since the peak in July we have seen the rates drop back into the high €1.30’s. There have a number of reasons behind the highs, firstly, the ECB introduced a quantitative easing programme which will initially weaken a currency to help boost the economy and eventually the euro will strengthen. This coupled with poor data releases and the potential of a UK interest rate rise have seen the pound strengthen considerably moving from the low 1.20 region and pushing into the 1.37 level. Adding in the prospect of a Greek default we witnessed a fairly volatile period between GBP/EUR.
Once the Bank of England Governor Mark Carney laid to rest the chance of an interest rate rise, at least until inflation begin to pick up and move to their target of 2%. With expectations dampened and analysts predicting early 2016 for a rate rise, sterling began to fall from the 8 year high we witnessed in July.
Dream Algarve has partnered with the Foremost Currency Group who will assist their clients with their currency exchange needs. You can get in contact with our currency broker David Bayliss who will help guide you through the currency market and achieve you the best rate of exchange.
If you are thinking about buying in the beautiful Algarve your Sterling budget will be constantly changing as the currency markets fluctuate on a second by second basis. One way to take the uncertainty away from the market is fixing your exchange rate on a Forward contract. With the Foremost Currency Group you can lock a rate of exchange in for up to 2 years into the future. You can do this by lodging 10% of the total Sterling figure.