Portugal gains as South of France investors deterred by euro

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by Gill Montia

Currency brokerage, FC Exchange, has reported that the South of France is losing its attraction for some wealthy UK property buyers.

The problem rests with the historically high level of the euro against sterling, making France’s Mediterranean cost too expensive in terms of property prices and the cost of living, for even the UK’s high net worth individuals.

According to FC Exchange, this group of Britons is now choosing Portugal for a holiday home.

Nick Fullerton, the firm’s managing director, says that there has been a notable shift in the number of people choosing Portugal rather than France for property costing over €750,000.

In the main, this is because they are seeking long-term holiday home investments and are keen to get a substantial property for their money.

This week the euro has fallen to a five week low against sterling but the currency remains around 10% stronger against the pound than it was five months ago.

Currency experts hold mixed views on whether and when pre-credit crisis exchange rates will be re-established.

FC Exchange is advising investors who want to make the most of an uncertain market to consider forward contracts, which can be used to freeze exchange rates.

Alternatively, potential investors can set limit and stop loss orders, which allow them to take advantage of a fall in the euro and can trigger a mechanism that buys the currency quickly once a certain target it hit.