Currency dilemma

Time to get out the crystal ball

When we go to Spain next week, we have to put some money in our current account to cover our bills . With the exchange rate as it is, does anyone want to hazard a guess if we should:

a) Take out enough money on our Flexaccount to cover the nex 4 months bills and take the hit on the current exchange rate or,

b) Put in enough money for Jan/ Feb and take the rest out when I go out in February?

I have read some contradicting reports about the Pound dropping below the Euro, bvut have also read that it will start a recovery in the New Year. Decisions, decisions!!

Mark

Tough decision Mark.

Since last Friday it has dropped again so as a precaution I, personally, would change my money now, as there are no immediate signs of it getting any better soon.

Saying that, nothing is certain so splitting up your transfers into 2 is probably not a bad idea either.  That way whatever happens from now until February, if the pound continues to weaken then you'll only "suffer" on half the amount instead of all of it.

I'm probably not really helping here but I would personally transfer all 4 months worth now....and I mean NOW as the rate continues to drop.

Justin

I can't transfer it all now though unfortunately as we won't be anywhere near a Spanish ATM until at least Sunday. Decisions, decisions!!

Mark

Hiya

This is a dilemma we all face at the moment. I use a currency bank and last week asked for a rate which they e-mailed me straight back with. Unfortunately, I was away from my computer for a couple of hours and before I got back to them to accept it the rate had fallen further. I decided to take the hit once, moved enough money to cover expenses until the end of February in the hope that by then the rate will have improved. At least now I am not constantly checking the rate to the point of obsession, as I was before when I needed to move some money over.

The idea that £1 won't even buy a whole Euro wasn't even remotely considered when we decided to sell up and move to Spain 2 years ago, when we were at €1.4 to the £1.

I smypathise with you Mark. We are in the process of buying a house, fortunately we got most of the cash transfered before the current slide began, but we didnot move the full amount as we would have lost 3 months interest.Had I known what I know today,  would have been done then and ALL our money would be in euros,in a Spanish bank.

when or if the rate goes back up, I'm going to move every penny and asset we have over here

£ pound cost averaging or euro cost averaging should mean that

if you transferred the same amount each month over a 12 month period that at the end of the day you should have gained more this way than carrying out one transaction, that said in the current world economic climate .............it is simply back to the crystal ball!

I have decided to ride it out month by month and only transfer what we need each month when we need it, as I believe it can't continue to slide for too much longer.

And I have a sneaking suspicion that the money markets might finally twig what is just around the corner for the EU Euro countries, which is what the BIG 'R' that UK has already faced, however the UK  would seem to be set for a quick recovery.

Once this happens, I think we will see the ex-rate go back the other way .... fingers crossed it will be much, much sooner than later.

Having said all that....

We have been discussing the ex-rate for some time now in this thread:

www.eyeonspain.com/Secure/ForumPosts.aspx

We were in the process of buying but with the house being off plan what started as a £85k duplex is now heading for the £120k with purchasing costs so we are in process of cancelling. The house is already three months overdue and we are now having to take the builders Torrevisa to court to get part of the deposit back as they seem to have a problem reading their own contracts. Caveat emptor was never more important. I would advise anyone not to use any of the big british based estate agents who have, in my opinion, badly let me and my wife down and are only interested in their own interests and that of the builders not the poor cannon fodder that sign up to be shafted.

As to exchange rates, I firmly believe that things can only get worse and would predict that the £ will fall to less that €.90c before a long and protracted recovery to parity when the pound will then join the eurozone. This, again in my opinion, is being manipulated politically by farmer brown and his wee darling to suti their long term political aims e.g. the destruction of HBOS and RBS as the powerhouse of the Scots financial  sector Farmer Brown will now say to the nationalists at next election that they do not have the financial infrastructure to support independence anymore, similarly this tactic will be used to move the pound into oblivion and join the eurozone.

Dave

Take your heads out the sand, no one has confidence in the government nor the pound. This has a long way to go yet. It might recover but not in next 6 months and probably not 12 months, When it does 1.1500 will look good.This has 0.8 euros to 1 pound written all over it. Dont put your GBP on deposit, you wont get anything for it, you might as well burry it in the back garden or spend it. Look at superdrug, 90% sale, 75% elsewhere. All over the high street is a disaster waiting to happen. I have been a currency trader for over 30 years and nothing surprises me. I advised people earlier this year that we will hit parity before the year was out, the rest is history.Badger your bank, 0.9% away from the interbank market is a very reasonable price to pay for amounts upto 100K, after that you should get a great deal. PM if you need more inside info.

Simon

I am glad to see that my opinion whilst amateur and based on nous and geusstimation is backed by a professional. I have decided that even if I have to take a serious bath in losing my deposit on the off plan hovel that this is a more attractive option than being lumbered with an overpriced massive mortgaged and unsaleable piece of mediteranean real estate.

God help the Spanish, unlike their French and German leaders they dont really produce that much and have relied for most of their goodies on the travelling Brit, pissed off with the weather and high prices in blighty. Not any longer and when the penny really does drop the spanish economy will be worth less than a tinkers cuss as the Brits will stop going and those that are there will be forced to come back (although something tells me that Farmer Brown wont be unhappy to see all that pension money coming back into Britain) So glad I bought a wee cheap but beautiful flat in Turkey where money still has some value.

Daveandannette

I really can't understand the reasoning behind the last few posts.  "off plan hovel"?  Maybe you should have done your homework a bit better.  My off plan house in Spain is fantastic.  Well built, cosy and a real home.  Just because some people made a mistake (and all we ever get are the moaners, not much heard from the many thousands whose house purchases went off without a hitch and are very happy).  Perhaps they should have looked for a better builder rather than falling for the sales pitch like other suckers.

The cost going from 85 to 120K ?  How can the Spanish be blamed for that?  This is all to do with our discredited government policies (lend to the banks at 12% and expect them to lend to the rest of us at 3% is a great way of doing business).  It's the pound crashing that has increased the prices.

Brits stopping going to Spain?  Very much doubt it.  Brits stopping going to poorly built places in Turkey I could agree with.  Flights to Spain are still cheap. 

Please, if you have problems with the way you have been dealt with, don't take it out on a whole nation and section of society.  I, for one, am extremely happy with my "off plan hovel" in Spain.  I am also far happier with the way of life in Spain than I ever was in the Greek or Turkish parts of the world.  The infrastructure in Spain beats the Turkish one hands down so enjoy your trips to your wee, cheap and beautiful flat in Turkey.  But don't pee on my shoes and tell me it's raining. 

Do tend to have to agree with Bobal in part, however badly Spain is affected form the point of view of currency Turkey will be stuffed (Xmas pun!) to a far worse degree.

Irrespective of cost of flights which will become less expnesive in regard to flights to Turkey as time goes on they will never get any shorter which in my opinon is one of the main reasons that Spain is so popular, i can leave my house at noon in the UK  and be ina pool by 4pm!

We are happy with our off plan apartment, everything went to plan, it was even on time, we have never looked back since we got the keys in February,  we even managed to put a full years mortgage in our Spanish bank before the rate dropped, flights are still reasonable and we can now be there in five hours door to door.

Hmm! Massively overpriced mortgage????

Well as the Euribor is DROPPING day-on-day, and as Spanish Mortgages are set against these plus a percatile of usually 1 or 1.25, then your mortgage WOULD decrease the day you completed!

For example: Six months ago the Euribor was 5.35% where as today it stands at 3.25%

So that means that your mortgage based on an affordable 80% loan to valuation lend WOULD be less when you complete and start making repayments. However if you were as you say 'suckered in' into a deal WITHOUT doing any groundwork then who is the fool, you or the salesperson that gave you the deal?

At the end day if your into it for the long term then I would if I were you continue with your purchase, as three months overdue on completion is NOTHING when it comes to off-plan. If you want to moan about off-plan, then look at the posts where people have been 18 months or more behind with completion.

It sounds to me that you fell for one of those 'guaranteed rental income' rubbish sales pitches, however I could be wrong!

And one last thing, we have only just arrived here in Spain and WE WON’T be going back to the UK live, as whatever happens with the ex-rate, we WILL be better off here in Spain.

Interesting comments here.......I see somebody is blamimg builders in Spain for them being unable to pay for the Euro now needed to buy their house......not the builders  fault and can't see any court going against them..

Turkey is not being stuffed at the moment and the Lira has been fairly stable over this recent period. I lived there for several years and still visit regularly...Some people do prefer Spain , usually because it a Britain with Sun in a lot of areas rather than any interest whatsoever in the country.

I would suggest anyone not enjoying Turkey or Greece have simply not integrated with the locals and country............Both countries have as much, and more ,to offer than Spain .........the main attraction being vast areas not taken over by Brits

Dear All,

it is good to hear both sides of the debate, but only when all the information is provided. So much is generally not declared by the enthusiasts (for and against).

Clearly anyone whose income is in pounds and expenditure is in euros has suffered and if the stats' are to be believed then the trickle of returnees to Britain has now become a stream, if not yet a flood.

I am sure that many people have been lucky in their choice, if it was a choice, of Spanish Off-Plan builder, but as a life-long engineer and surveyor I am interested in how the good ones are actually chosen. At Casares we heard a lot about expensive "due diligence" studies being undertaken with no satisfactory result to my mind. So how is it done?

From my very limited experience of three sites and casual holiday observation the building standards for these concrete frame structures is not generally good with poor sound insulation and weather protection. I am puzzled as to who ensures building regulation, planning regulation etc. The habitation certificates provided seem to leave a lot to be desired, if not actually worthless.

On the planning side how is it possible for a developer to change the plans after sales are made and the complex have extra blocks built, pools and gardens reduced?

As to the legal side, that is astonishing, how is it possible to buy a share in a highest luxury, front-line golf, closed holiday complex with every possible holiday facility and yet end up with an undersized very basic poorly built (failed survey) "affordable" apartment with nothing else except a splash pool on an open public urban situation?

What manner of contract allows this and is accepted by your expensive lawyer.

Information please.

Regards

Norman

Normansands

Trust me, this does not happen just in Spain - come to Dubai and check out the building specs and contracts here!  They could build a rabbit hutch on a plot if they wanted and you wouldn't have a leg to stand on!!

We're very happy with our purchase off plan and have no complaints at all, having completed (seemlessly) nearly two years ago.  It does actually happen for some of us.

Think this thread might have strayed a little off the "plot"!!

Dear All,

thank you for the invite but I am a blue-badge pensioner with little opportunity to visit Dubai, but still don't understand the logic of "if you think this is bad, just look at what you get elsewhere". What is the relevance?

I may have been critical of some of what I have seen in Spain but I have never seen any actual "rabbit hutches" or described any apartments as such.

Where is your apartment in Spain and who is the builder to recommend?

It is good to hear that you are so satisfied but was it just luck?

Good information is surely the purpose of the forum, isn't it?

Then please give it and help those who may have not been so lucky and who might one day try it again.

Lastly of course, how do you pay your mortgage if you have one, £'s to Euros or what?

Regards

Norman

Well as I started this thread, I suppose I ought to bring it back on track now it has diversed into something that is becoming unpleasant to read in part.

The rate has continued to drop since I first asked the question, and maybe I should have taken Justin's advice to buy the currency last week. I haven't decided yet whether I have lost or would have broken even, but it is too late to worry now. I will be drawing my currency from the ATM with my Flexaccount card tomorrow.

Mark