British spending on Eurozone property halves in a year. Data released by foreign exchange specialist FEXCO shows Britons cancelling all but essential payments for European property. Comment from David Lamb, head of dealing at FEXCO Corporate Payments, explained:

But transaction levels surged by a quarter in March as confidence – if not certainty – began to return. The weak Pound has led Britons to slash the amount they spend on European property by more than half, according to data released by the international payment specialist FEXCO Corporate Payments. Britons spent 52% less in sterling terms on Eurozone property in the first three months of 2017 compared with the same period last year. The analysis, of more than 500 Euro transactions made by UK customers through FEXCO Corporate Payments*, reveals that new property purchases have collapsed, with the majority of funds still being sent to the Eurozone destined for ongoing commitments such as mortgage payments, maintenance or management fees.

The low point was in January 2017, when transaction values slipped to 78% below their January 2016 level. February transaction levels were 42% lower than those made in February 2016. However the picture improved substantially in March, with transaction values jumping by a quarter (24%) on the February figure to reach a level nearly three times (180%) higher than January’s low. Though the total for the quarter remained well below the value of transactions recorded during the first three months of 2016, March’s dramatic improvement suggests a degree of confidence is returning to the market. David Lamb, head of dealing at FEXCO Corporate Payments, explained:

“Two major concerns have curtailed British buyers’ appetite for European property since last June’s referendum – the sharp fall in the value of the Pound and lingering fears about whether UK citizens could face restrictions on living in an EU country after Brexit.

“No one wants to buy an overseas property only to discover they could have got it cheaper if they had waited. As a result discretionary spending – which includes new property purchases – has fallen sharply as many prospective buyers hold off on committing in hopes of a more favourable exchange rate.

“Though it has recovered from the lows it reached in late 2016, Sterling is currently 10% down on its pre-referendum level against the Euro than it was on the eve of the Brexit vote. Its continuing volatility means anyone planning to invest in a European property should consider a currency hedging strategy to ensure they get the best value for their investment.

“While the triggering of Article 50 has brought no greater insight on what the final Brexit deal will look like, the start of the divorce process has at least injected some reassurance into the market. For now it is returning confidence – rather than new clarity – which is spurring would-be buyers into action.”