UK households turning to property abroad amid the Cost of Living crisis and war in the Middle East have been warned. Anybody investing in European Union property in hotspots like Spain, Portugal and France is at risk.
Currency Exchange Warning
Tony Redondo, founder at Newquay-based Cosmos Currency Exchange, said: "I've been helping people with their currency transfers for years and I've not been this busy for a long time. It's fairly well-known that many UK landlords are exiting the sector en masse, as the numbers just don't stack up any more and the legislation being introduced by the Renters Reform Act is piling on even more financial and administrative pressure.
"But what's less well-known is the sheer number of landlords who are selling up and then reinvesting their cash in rental properties overseas, where they feel they can get better returns.
"And while Spain, France and Portugal always prove popular, a growing number of Brits are being even bolder and looking to the US, with Florida becoming a hotspot for UK investors over the past year or two."
Example of Exchange Rate Savings
He said: "By way of example, on January 29, the Pound to US Dollar exchange rate rose to its highest level since September 2021. A client of ours was looking to purchase two property rental units in Florida at the time to add to his portfolio and we suggested that, with the Pound so strong, he should consider locking into that exchange rate as it may not last for long.
"With the use of a flexible forward contract, I secured my client the rate with a small upfront deposit that would be refunded when the transaction took place. The transaction happened at the beginning of April and, as the Dollar has been very strong of late, saved my client a massive £63,500 had he purchased Dollars then."
Advice for Investors
Redondo added: "Fail to prepare and, in the forex world, the message is very simple: prepare to fail. Sadly, too many people self-serve through their banks when exchanging currency and end up paying through the nose."
