(1888PressRelease)
April 20, 2007 - Financial experts are now saying that it is almost inevitable that the base rate of interest of interest will go up again in May when the Bank of England's monetary policy committee meet for their monthly discussion of the economy.
The rate was last increased in January, to 5.25 per cent, although this increase may not as yet have had time to take effect. Clearly, a further rise in the interest rate is going to have implications for the property market, not least by making loans and mortgages more expensive.
However, there is one very positive aspect for the buy-to-let investor operating in the overseas market - the strength of the pound. Rising inflation has made the pound a sought-after commodity on the currency exchange market and, as of Wednesday 18 th April, sterling is particular strong against the US dollar, fetching $2 for every £1. There has always historically been a high exchange rate between the two currencies in favour of the pound, but current levels are particularly high.
The US has long been a popular destination with British tourists and a property in the right location has the potential to generate income the year round. Additionally, the US property sales market has experienced something of a downturn in fortunes of late, allowing the canny investor to negotiate a bargain price for a well-placed buy-to-let property. Coupled with the favourable rate of currency exchange, it is easy to see why some analysts are advising anyone interested in the US market to strike while the iron is hot.
Paul Collins, overseas property editor for online property magazine Buy Association, said the current climate "means that UK investors will get more bang for their buck". According to his calculations, a $200,000 house that would previously have cost £113,148 at the lowest exchange rate of the past 12 months will at present rates cost just £99,631.
"This makes it a good time to be buying in the US, whether you are buying purely for investment, or for a holiday home," he advised, adding: "Some buyers will also grab themselves a good deal by using a currency specialist to fix their exchange rate at today's levels for up to 18 months in the future."
