Why has the value of the Pound jumped and how does this affect you purchasing property?
The pound has now reached a 7-month high against the dollar and its highest level against the Euro since May 2017.
So what are the key reasons behind this recent resurgence?
Read on to find out more and discover what this means for seafarers and future interest rates
What Are The Reasons Behind This Hike?
The exchange rate is driven by a number of complex factors but currently, there are two main ones driving this:
- • The EU granting an extension to Brexit
- • the recent polls suggesting the likelihood of a hung parliament is receding, with the conservatives taking a 10 point lead and a parliamentary majority.
How Has Brexit Affected The Exchange Rate?
The value of the pound has changed a lot over the past 3 years.
Back in 2016, it fell by around 15% overnight!
As the majority of seafarers are paid in euros and dollars, this had a huge impact on how far their income would go in the UK, making it very attractive to invest here.
The exchange rates teamed with a slow down in the property market growth and low interest rates made buying property even more attractive.
What Does The Recent Hike Mean For Seafarers?
Whilst it is true that exchange rates are not as favourable for seafarers as they have been in recent months, the fact is that they are still much better than the pre-referendum days!
The property market growth is still slower than recent years, and interest rates are still at an all-time low, with further talks around an interest rate base cut.
All these factors combined means that the UK is still a much more affordable investment opportunity for those investing using non-GBP sources.
UK Interest Rates Past 5 Years
What’s The Future Prediction Of The Pound?
Analysts are predicting that with a Conservative win in the general election and a deal made on Brexit, the pound could strengthen further next year.
If Labour win then the result could see a slight fall in the pound.
Although with a Labour win may come a softer Brexit or no Brexit at all, the domestic policies that come with such a government could have a negative effect on the economy.
Get In Touch!
Are you concerned or have questions about the rising value of the Pound or how this may affect future interest rates?
Contact an experienced member of our team today for professional advice.
IMPORTANT: This article provides an overview of investing in property the UK, it does not constitute advice and should not be used to make financial decisions. You must always seek advice from independent financial specialists when making major financial decisions.