Good time for Brits to buy as the pound starts the year strong

With a strong pound this year, Brits could be in a strong position to snap up Spanish property

Sterling has come racing out of the blocks in 2014, with the pound currently worth €1.21 – its highest rate against the euro in more than a year.

At the beginning of 2013, sterling was suffering badly. Having fallen against the US dollar, it sunk to one of its lowest rates against the euro last year, barely scraping past an exchange rate of 1.1. However, foreign exchange experts predict that the pound’s strong showing at the turn of the year is a solid indication that 2014 will be a good 12 months for sterling – which is encouraging news for Brits looking to snap up a Spanish property or enjoy affordable holidays in the eurozone…

“All the talk is no longer of recession but of recovery,” HiFX’s Andy Scott told the Daily Telegraph. “And investors are responding by buying sterling.”

Throughout 2013, as both the pound and the US dollar lurched from crisis to uncertainty and back again, the euro was actually the top-performing major currency, despite problems of its own.

Hamstrung by struggling economies throughout the eurozone – including Spain’s – the euro was widely regarded as the best of a bad bunch in 2013, with 2014 set to see the currency demoted to third-place behind the resurgent pound and recovering dollar.

“The path for the euro remains a rocky one,” said Charles Purdy of Smart Currency Exchange. “With resurgence in growth from Germany, the knock-on effect to the eurozone can only be encouraging.”

Currency expert from UK Forex, David Nicholls told the Daily Telegraph: “We expect the euro to perform sluggishly at best in 2014. In all likelihood, sterling will gain further against the euro this year and into 2015, particularly if calls for early interest rate hikes continue in the UK.”

Some industry experts put the pound’s recovery down to Britain’s property market, which has received a recent boost by the introduction of the Help to Buy scheme – a government-backed initiative designed to help first-time buyers and those with only a five per cent deposit on to the property ladder.

Such a policy could also inadvertently deliver a shot in the arm to Spain’s property market too, as pound-rich Brits look to Spain for a property bargain.