The relative strength of the Pound Sterling against the Euro is making villas and apartments for sale in Marbella excellent value at the present moment. With the exchange rate hovering around the 1.40 to 1.41 mark at the start of November it has led to considerable savings for British residents buying now as opposed to those converting pounds when the rate was around 1.33 just a month ago. For example, a €1 million villa converts to around £707,200 at a rate of 1.41 on November 10. That same property would have cost £746,500 on October 13, when the Euro peaked at around 1.34—£39,300 more expensive! Compared to a year ago it is even better value. The rates on November 18, 2014 would have meant you needed £801,750 to buy the same villa—a £94,550 difference just on exchange rates. Effects of volatile exchange rates Well, that is good news for those completing the sale in November, but for those starting the sales process now there is a cautionary note—exchange rates are volatile and do off course go down as well as up. For instance, if we go back to July 18, the rate stood at 1.44. So that €1million villa would have cost just £693,000 then. With the average sale taking around three months to complete it is entirely conceivable that the payment would be due in mid October—just when the euro was relatively strong. So the final price paid could have been £53,500 more than budgeted for when the offer was first made. Of course, the reverse applies as well and your new home could turn out considerably cheaper should exchange rates move in a favourable direction for you, but can you afford to take that gamble? When buying real estate most people have a budget, so a significant weakening of a currency against the euro could take them over that budget. For this reason certainty of what they will end up paying is important, so as soon as an offer is accepted it would be wise to take advantage of one of the various financial instruments available to remove the risk. Tie in to favourable rates A ‘forward contract’ for instance, is ideal if rates look particularly favourable. A small deposit will fix the present day rate for up to a year. In other words, buy now pay later! Other options available leave the prospect of a currency gain open while fixing a minimum rate—if the pound weakens ‘losses’ are limited, while if it strengthens you still benefit. These options are available through specialist currency traders who also offer a better exchange rate than banks and lower commissions to boot. When buying real estate in Marbella remember to consider how you are going to pay for it—a little thought now could save a lot of stress (and money) later. But remember, Sterling is still strong compared with the past few years, so now is definitely a good time to buy. The Altavista Property team is highly experienced in Marbella real estate and able to offer informed advice on all aspects of buying and selling a villa or apartment. Please contact us and we will be happy to discuss your requirements.