A FAIR EXCHANGE
The exchange rate can make a big difference to how much money you have to spend on your new home and life in France, as Lewis Edmonds explains
How movements in the exchange rate can make a big difference to your budget
For anyone buying a house in the UK, it’s common knowledge that you should move quickly – after all, prices are only going up. As a first-time buyer on the hunt for a property on the outskirts of north-west London, I personally know this all too well.
However, cross the Channel and you’ll find an entirely different situation, which only serves to strengthen the appeal of buying a property in France. Not only are properties themselves cheaper, but thanks to large strides made by sterling against the euro since 2010, each pound means an additional 21 cents in your pocket, and this can make a big difference to your French house-hunting fund.
If we take an average budget of £200,000 to spend on a home in France, the list of potential properties that falls within this price bracket changes dramatically.
We can track these marked improvements in buying power by considering what would fall into my price range based on exchange rates as they were five years ago, three years ago and in the present day, to show just how much further your money goes now. I’ve chosen the Brittany region as my search area on francepropertyshop.com and even I was surprised by the results of my comparison.
FIVE YEARS AGO
Back in 2011 the economy was beginning to experience a turnaround following the recession, and the exchange remained at around 1.10 for much of the year. This would give me a budget today of €220,000.
This property ( above) was constructed from the stones of an old mill and the ruins of the mill can still be found in the grounds. There’s plenty of character both inside and out, and a new septic tank has already been installed. Set in over 3,000m2 of grounds and with the river running alongside it, the house has lovely views over the surrounding countryside and the secluded location makes it ideal for those keen to swap the hustle and bustle for a slower pace of life.
THREE YEARS AGO
By 2013 the recovery was gaining some momentum and exchange rates hovered around 1.21 on average, seeing my budget stretch to around €240,000.
The additional €20,000 I’ve gained as a result of exchange rate movements would buy me a lot more house for my money. This farmhouse ( below) has five bedrooms and is situated on the edge of a village close to the town of Pontivy, which also means it’s easier to get to and closer to amenities than the first property.
Dating back to the 1900s, the house has been extended and renovated and is set in over an acre of gardens, where there is a barn that is currently used as a garage and workshop.
The UK recovery hit its peak in 2015, with huge gains made in employment and growth. There were a few stumbling blocks at the beginning of 2016, but the average price to buy euros this year is still at 1.31, extending my budget even further to around €260,000.
This spacious property ( above) has been renovated to a high standard and also has five bedrooms, while open-plan living accommodation on the ground floor further adds to the feeling of space. Set in a third of an acre of attractive garden, you also get a 9mx4m swimming pool for your money and a double garage could be used as a workshop.
The location offers the best of many worlds too – in a rural hamlet between the village of Bieuzy-Lanvaux and the commune of Pluvigner, it is just a short drive from Morbihan capital, Vannes.
Looking at the relationship between the property market and the currency world over the course of the past five years, it’s clear to see that potential purchasers of property in France are in a much stronger position now as a result of movements in the exchange rate, and the extra money in the budget goes a lot further in France than it would in the UK.
British house-hunters now have 18% more buying power across the Channel, than they did five years ago and the additional €40,000 gained in this example makes a big difference to the property you can buy – more space, a desirable location and a swimming pool. I think you’d agree, that’s a very attractive proposition.
Potential purchasers of property in France are in a much stronger position now
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