Value of overseas property owned by Brits increases by over £2.6 billion in a year

Close Treasury estimates that the value of property in France, Spain, Italy, Portugal and America is £42 billion. Analysis¹ from the FX team at Close Brothers Limited Close Treasury (‘Close Treasury’) reveals that despite property prices falling in France, Spain, Portugal and the USA, and only a small rise in Italy, the collective Sterling value of property there owned by British citizens increased by over £2.6 billion between July 2008 and December 2009.  This is because the value of the Euro and the US Dollar against Sterling increased by 13.22% and 16% respectively.

Between 2008 and 2009, property prices in France declined by around 6.63%, but because of the rise in the value of the

The flower market at Revel in south-west France always attracts foreign residents

Euro, if those Brits owning property there had sold-up and converted the money back into Sterling, they would have actually made money.  Close Treasury estimates that there are around 98,000 properties in France owned by British citizens, and between 2008 and 2009, the combined Sterling value of these would have increased by just over £1 billion, or £10,373 per property.

In Spain, where Close Treasury estimates 144,500 properties are owned by British citizens, property prices fell by around 8.35% between 2008 and 2009, but again because of the rise in value of the Euro against Sterling, they would have made a collective gain of £1.1 billion, or £7,668 per property.

Even in America where property prices fell by 14.95% between 2008 and 2009, the rise in the value of the Dollar against Sterling meant that a British Citizen who owns a property there saw its Sterling value increase on average by £1,752.

The biggest winners were British citizens who own property in Italy, where a combination of rising property prices and a strong Euro meant that on average they saw the value of their properties there increase by £25,597 each.

Country	Estimated number of properties owned by British citizens	Percentage change in property prices between 2008 and 2009	Percentage change in local currency compared to Sterling between 2008 and 2009	Change in Sterling value of property	Change in Sterling value per property
France	97,750	-6.63%	13.22%	£1.01bn	£10,373.20
Spain	144,500	-8.35%	13.22%	£1.11bn	£7,668.14
Italy	8,500	3.05%	13.22%	£217.57m	£25,597.02
Portugal	12,750	-1.52%	13.22%	£234.72m	£18,409.70
USA	25,500	-14.95%	16.02%	£44.68m	£1,752.13

Close Treasury estimates that the value of overseas property in these five countries belonging to British citizens is £42 billion. Mark Taylor, Head of Foreign Exchange, Close Treasury said: “There has been a lot of volatility in the currency markets recently and many expect this to continue.  This is having a huge impact on the value of property owned by British people abroad and in many cases it is more influential than price changes in the local property markets.

“With the currency markets being so volatile, around 40% of our FX clients are taking out forward contracts as opposed to paying spot prices.”

For further information on Close Treasury’s FX business, call 020 7655 3449 or visit www.closetreasury.co.uk.

Analysis(1) of Close Treasury data.

Based on analysis of:

• Residential square metre prices published by the Global Property Guide as of Q2 2008 and Q2 2009. The Global Property Guide figures are calculated on a price per square metre for premier city centres and are based on web advertisements, looking at offers for sale, and offers for rent of resale apartments and houses.  Properties are in excellent condition, with good facilities, and have been refurbished or redecorated within the last five years. Changes are not adjusted for inflation.

• USD and EUR fluctuation in relation to GBP taken from FXHistory (www.oanda.com) as of 31 July 2008 and 3 December 2009

• Savills Second Homes Abroad, 2008

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