The state of the foreign property investment market

Graham Austin, Marketing Manager of HomesOverseas.co.uk, analyses the state of the foreign property investment market.

If you’re jetting off to Europe this summer, your holiday pennies will stretch a lot further than this time twelve months ago. And if you’re thinking of investing some of your cash, you’ll get a lot more bang for your buck on the property market not only if you search in the right areas, but also, and perhaps more importantly, if you keep an eye on sterling.

Anyone buying a property in Europe when the pound was struggling against the euro in October 2009 would certainly not have got as good a deal as they could today when, at €1.20, the pound is almost back to where it was two years ago against the euro.

Foreign property is beginning to look like a much healthier investment once again, as the Club Med countries (a sun-drenched theme park stretching from the Aegean to the Atlantic) suffer the fall-out from the international debt crisis and the euro looks set to remain relatively weak against the pound for a good few months to come.

While the UK has suffered its own woes as a result of the debt crisis, we can be thankful for the last government’s opposition to Britain joining the euro. Had we joined the single currency, the boom would have been even bigger, the bust unimaginably worse.

With no control over our own monetary policy, Britain would have had to go cap-in-hand to the International Monetary Fund. The IMF’s bitter medicine would have been far more brutal than the austerity we are about to experience due to the Lib-Con Budget; the mortgage and housing markets would be in freefall, the financial services industry in ruins.

While Britain is not out of the woods just yet - relying on the government to take a tight hold of the public purse - for now, we’re looking at the start of a very attractive foreign property investment market. Prices are set to fall across southern Europe, particularly in Greece, and this will leave plenty of opportunities to maximise any potential investment.

If the government manages to rein in the deficit, the pound will strengthen further against the euro. Opportunities galore will open up. But sharp investors will snap them up quicker than you can say single currency.