(1888PressRelease)
April 26, 2007 - While rising inflation may have certain effects on the domestic market - particularly for the much put upon first-time buyer - there is one particular advantage for the overseas property investor: the strength of the pound.
With inflation rising high, the pound is performing strongly against other currencies and this means that it is possible to get some very favourable exchange rates. One of the best rates at present is with the US dollar. As of mid-April, one pound is worth just over two dollars. Historically, the average rate has been around the 1.6 mark, so it is clearly unusually high at the moment.
This means that there are properties available for a bargain price - and prices have been lowered further by American owners desperate to sell in the middle of a protracted US property market slump. However, it will not do to just buy a property because it is cheap. Location and potential rental yield must also be taken into account and in the US, some places far exceed others in their potential for revenue generation.
Florida, for instance, is a traditional family holiday destination and attractions such as Disneyworld and Universal Studios have made it popular with tourists the world over - and Americans themselves. The state is also blessed with almost year-round good weather that has earned it the moniker of "The Sunshine State".
Paul Collins, overseas property editor for Buy Association, says he would advise overseas investors to look at buying there. "Florida has always been a popular destination for UK buyers and this is likely to continue regardless of exchange rate fluctuations," he explains.
Another spot worthy of consideration is New York. A major part of the Big Apple's tourist trade is centred around shopping breaks, as the city is famous, among other things, for having a huge range of designer boutiques and department stores. With the current favourable exchange rate, "British bargain-hunters will pack onto flights to the Big Apple to snap up goods that have suddenly become much cheaper," says Mr Collins.
Because of this, he predicts, people who own short-term let apartments in Manhattan will be the best placed to take advantage of the current strength of the British pound.
