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Don't give up on Europe yet

31st December 2008 | back to article listings BACK    print this article PRINT

The recent falls in the value of the pound against a basket of currencies - representing the perceived weakness of the UK economy in the face of the recession - have had a notable effect on the cost of converting to the euro. Only those whose maths is very poor may have much to cheer about the near parity that exists in the value between the two currencies, a far cry from the 71p a euro cost when it was launched a decade ago.

But should this deter Britons from investing in the eurozone? Certainly not is the answer provided by managing director of Solihull-based Cherish Properties Steve Wright.

Earlier this week he told the Birmingham Post that when it comes to the value of currencies, it should be remembered that these fluctuations are a feature of the economic cycle. He stated: "The drop in the pound will make a difference; however, it will recover."

He added: "The thing to remember about the property market is that it moves in cycles. No country is in the same cycle at the same time."

Of course, some may counter that comment by suggesting that the whole world is affected to some degree or other by the credit crunch. However, Mr Wright told the paper that there are a number of countries that offer strong and stable market situations that those looking to invest in property can make the most of.

For example, he noted, there is France, which he described as good for investors, stating: "In France, there is still six to seven per cent growth a year on average. One of the good things is that, on completion of new-build properties, the French government refunds your VAT as part of a government initiative to attract foreign investment into the market."

So too Cyprus, he suggested. "The difference in Cyprus is the control of the supply. It has a very small population and a very big tourism industry." Mr Wright said this contrasts with Spain and its property oversupply problem and is a reason to tip the country to see ten per cent annual growth over the next few years.

Cyprus may also be the beneficiary of other events that help boost tourism (and, by extension, tourist buy-to-let). The Cypriot Financial Mirror has reported that national airline Cyprus Airways is getting into a price war with easyJet over services to the island from airports such as Gatwick, Manchester and Birmingham.

This sort of competition - partly driven by the need for airlines to stay competitive in testing times - is one way in which prices may fall and help keep Britons heading into the eurozone for holidays, since lower air fares will help offset the increased cost of converting holiday money. It may also provide yet another reason why Britons should not give up on investing on the continent.

This is a press release by Assetz also available at http://press.assetz.co.uk/articles/4561.html. Alternatively, please see our full press release archive.

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