Following the UK’s decision to leave the European Union, Oliver Meredew examines how the exchange rate has been affected and considers the possible implications for those planning a property purchase in France
48.1% remain. The outcome rocked the whole of the UK and triggered David Cameron’s shock resignation.
Ironically, the pound actually rose after voting closed on the night of 23 June, with a GBP/EUR peak of 1.3136 being recorded. But as the results started rolling in and leave optimism snowballed, the pound plummeted against the euro and virtually all other peers. Within a few short hours GBP/EUR had slumped from 1.31 to 1.22 and the pairing has continued softening since, with the pound hitting a rate of 1.16.
WHAT DOES BREXIT MEAN WHEN IT COMES TO BUYING A PROPERTY IN FRANCE?
The impact of the Brexit vote on French property purchases is extremely uncertain at the moment, but the decision is likely to change the state of play.
For starters, the significant decline in the pound/euro exchange rate means that anyone looking to invest in overseas real estate will find that their funds won’t stretch as far as they would formerly.
To illustrate this point, before the vote to Brexit, £250,000 would have equated to €330,000. Immediately after the decision to leave, that same £250,000 would only be worth €305,000 – €25,000 less. So on a technical basis, buying French properties has become more expensive. This is because