If you have EURO funds and are contemplating using these to buy a UK property - and you have a mid-long term investment perspective -then there is a good argument to be made for buying now.
1. Currency: Irrespective of the daily cut and thrust of currency fluctuations, the word is that Sterling is cheap right now against the Euro. Sterling has weakened considerably over the past year and the pound is worth €1.34 compared to €1.52 12 months ago.
2. Interest rates: If the Bank of England cuts rates by .25% this Thursday, then this will add to the .25% cut made in December, the first easing of monetary policy for the first time in two years. Even if they don’t, the expectations are for an easing throughout 2008, if economic data continues to remain weak and inflationary pressures subside.
3. Strengthening Rental Yields: With the credit crunch and buyer uncertainty, first time buyers in the UK are not entering the property market and are renting instead. The FT reported on the weekend that rental yields are up between 5%-10% in the last 12 months and that lettings volume is up 25% in January.
There are many other locations which do not share the pluses at the moment.
(I have a vested interested in the UK market but the facts re. currency direction, interest rates and rent are relevant).
1. Currency: Irrespective of the daily cut and thrust of currency fluctuations, the word is that Sterling is cheap right now against the Euro. Sterling has weakened considerably over the past year and the pound is worth €1.34 compared to €1.52 12 months ago.
2. Interest rates: If the Bank of England cuts rates by .25% this Thursday, then this will add to the .25% cut made in December, the first easing of monetary policy for the first time in two years. Even if they don’t, the expectations are for an easing throughout 2008, if economic data continues to remain weak and inflationary pressures subside.
3. Strengthening Rental Yields: With the credit crunch and buyer uncertainty, first time buyers in the UK are not entering the property market and are renting instead. The FT reported on the weekend that rental yields are up between 5%-10% in the last 12 months and that lettings volume is up 25% in January.
There are many other locations which do not share the pluses at the moment.
(I have a vested interested in the UK market but the facts re. currency direction, interest rates and rent are relevant).