Woes increase for expats in Spain as pound hits new low

Published:  28 Aug at 6 PM
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Sterling is still falling against the euro, with last week’s drop marking a fresh eight-year low.

Expats living in Spain and depending on the ungenerous UK state pension have been hit by the currency’s latest fall against the euro. The official rate is now just €1.08, having fallen by over 15 per cent since last June’s referendum result. British holidaymakers heading to Europe are being quoted just 87 cents per pound at British regional airports’ Moneycorp exchange booths – the lowest rate since the 2008 financial crisis.

Economists are advising clients that sterling’s downward trend is set to continue and are recommending buying euros as a sensible trade. Sterling’s woes are easily attributed to Brexit, with the government’s lack of preparedness, cohesion and organisation taking much of the blame. Labour’s decision to back as soft a Brexit as possible is simply increasing the risk of disaster, and the continuing lack of hard news as regards expats’ ongoing positions isn’t helping.

However, Spain’s property market seems to be on the rise, driven by cheap credit and the Europe-wide recovery. and is ending the recent real estate price uncertainty. Demand is also increasing, with onshore as well as offshore banks happier to lend within the region, giving expats a chance to sell at a better price. Projected prime investment regions include Barcelona, Madrid, Marbella and the Balearic islands, allowing British expats planning on returning to the UK a better chance of at least not losing money on their Spanish homes.

Rental costs are also on the up, rising some eight per cent during the first half of 2017. Although the increase is slowing slightly, it’s also indicative of a resurgence of the Spanish property market. Sustained growth in the Spanish real estate market is long overdue, especially for expats looking to sell their properties and return to the UK with enough capital to re-establish home ownership.
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