Following the political whirlwind created by the UK’s decision to leave the EU last month, the pound has dropped hugely, falling below $1.31 in early July – a low it hasn’t hit for more than 30 years.
Those holidaying overseas this summer have already found that their break is noticeably more expensive than it would have been pre-referendum, but the same doesn’t have to be the case for those purchasing properties abroad.
The founding director of boutique estate agency Ideal Homes Portugal, Chris White, explains: “We’re working with our clients to offer them a way to avoid being stung when it comes to the exchange rate over the coming months. Many of our vendors – over 200 of them, in fact – want to sell their homes in Portugal and then access the proceeds of the sale in the UK. At the same time, we have buyers in the UK whose sterling is suddenly worth less if they convert it to euros.
“As such, we’re offering a win-win to both parties; they can buy and sell entirely in pounds. This means that the buyer doesn’t lose out as a result of the pound’s fall in value and the seller gets to have their money in the UK, where they want it. Both vendor and buyer save money by not having to pay for currency exchange services.”
The service is already proving popular with Ideal Homes Portugal’s clients at both ends of the transaction.
Portugal is one of the most family-friendly holiday destinations in Europe, offering an abundance of sunshine and a short flight time. Properties in the country provide excellent value for money, particularly for those still able to buy in pounds.
An example of what’s on offer in Portugal is a smart, three-bedroom, three-bathroom townhouse from Ideal Homes. The property, in the popular town of Albufeira, boasts a private pool and built-in barbecue for just €285,000 (around £239,000).
Many overseas property buyers looking for holiday homes in Portugal usually do so with rental income, alongside personal usage, in mind. Portugal offers a fairly low tax rate on rental income, of just 3.75%, regardless of where the property owner lives.
Add that to the fact that the Algarve’s population grows by between three and four-fold over the summer season, and the potential for excellent returns is clear.
Using rental income to offset mortgage costs is a popular choice for overseas property buyers.
If you decide to purchase a holiday home abroad, remember to protect your new investment with Overseas Property Insurance. The Insure My Villa policy offers some of the widest cover on the market – don’t miss out!