All indications point towards the return of the British buyers to Southeast Asia this year. For agents and developers in this part of the world it’s important to understand their mentality and thoughts about buying and investing in property in Southeast Asia.
So what will shape British people’s decision to buy abroad in 2016?
British people with plans to buy property or move abroad in 2016 are expected to be especially vigilant in a year with an uncertain financial landscape that could see exchange rates affected by a handful of political and economic decisions.
This is according to Elaine Ferguson, Head of the Resource Centre of the British-based OverseasGuidesCompany.com.
“The prospect of a European Union Referendum and the possibility of the U.K. leaving the EU this year is foremost in people’s minds, and already causing concern despite the likelihood of Prime Minister David Cameron agreeing a new deal in favour of remaining an EU member before the nation votes,” said Ferguson.
“This makes the next European Union Summit next month so significant, since what Prime Minister Cameron gets out of it might decide whether the U.K. goes to the polls in June, as many expect, or the Referendum is delayed until 2017.
“Meanwhile, the ongoing uncertainty could be a contributing factor to the euro’s strong start to the year against the British pound. Expect continued significant currency movements.”
There are a number of other factors that may affect the U.K. economy and its currency, as Charles Purdy, Chief Executive Officer of Smart Currency Exchange, pointed out.
He said: “The other anticipated decision this year is a hike in U.K. interest rates, following in the footsteps of the U.S. Federal Reserve last month. While any rises would be gradual, people re-mortgaging in the near future can expect higher mortgage costs and should factor that into their budgeting for a second home.
“A rate rise could also cause the pound to strengthen against the euro, but, as we’ve seen before, other economic and political factors would also affect exchange rates.
“This year is also a bit of an unknown in terms of European monetary policy. Last month, the European Central Bank (ECB) announced a six-month extension to the bank’s quantitative easing (QE) programme, which surprised many financial markets.
“Future decisions by the ECB have become increasingly difficult to forecast, making the exchange rate even more volatile, which affects people transferring money between euro and sterling accounts.
“Elsewhere, later in the year, the pound/dollar rate could yo-yo as we get closer to election time in the U.S. A key focus for both the Republican and Democrat candidates’ campaigns will be monetary policy and maintaining the growth of the world’s largest economy.
“The prospect of a new Republican president could cause ripples in the world’s financial markets, so the effects could be felt well beyond the shores of the U.S..
“For those planning to retire overseas, this is also the year that the new pension rules kick in.” added Ferguson.
“From April, those qualifying for a maximum State pension will need 35 years’ worth of National Insurance contributions – something to bear in mind before Brits start planning their relocation to sunnier climes.”