Does the Euro offer on-going opportunities for landlords?

October 20, 2012

Landlords Insurance

The latest business reports coming from various sources* show that the Eurozone continues to be in something of an economic mess overall.

While that is true that some of the member state economies are performing tolerably well, primarily those in Northern Europe, those in Southern Europe continue to struggle badly and by some measures, even deteriorate further.

The international markets continue to be extremely worried by the Greek, Spanish, Portuguese and Italian economies.  They are also holding their breath a little with respect to the French economy, which appears to be stuck in the doldrums.

Whilst this continues, the pound Sterling continues to be relatively well priced when viewed against the Euro. What that means is that in some of the above mentioned Euro zone countries, property continues to offer very good value for money when compared to UK norms.

The big investment in European Property that went on from the 1970s through to 2007 was brought to a shuddering halt by the decline in the value of Sterling against the Euro coupled with the global economic shambles that started at the tail end of 2007.

Yet since then, the on-going woes of the Euro zone have led to a slow but steady rise in the price of Sterling against it.  From a position close to parity (1£ = 1€) a few years ago, Sterling for much of this year has sat anywhere between €1.23 and €1.28

This means that many properties in some of the shakier Euro zone economies are now looking even more competitively priced than they were several years ago.

Of course, the exchange rate is only one factor that influences a landlord’s view as to whether or not to enter into purchasing overseas. For example, properties in the more affluent northern European economies are likely to be rather more highly priced than those in the countries that are struggling.

As most UK landlord investment abroad is typically targeted at holiday rental type properties, it is also true that finding good cheap property may be unattractive if it does not also happen to sit in a prime tourist and therefore easy letting location.

Even so, taking all these things into account, it has never been easier to purchase in Europe and it is even possible now to find landlord house insurance companies that may be able to offer cover for properties overseas.

Some landlords might now be wondering whether or not the on-going relative weakness of the Euro and the ever so slightly more positive signs coming out of the UK economy, might just suggest that it is time to start thinking about overseas property again.




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