FE TRUSTNET
you can buy now, so you have clarity
over just how much you’ll get (at the risk
of losing out if the pound recovers); or
you could exchange half now and half
closer to the time – so it averages out the
rate you get (this guarantees you won’t
face the worst possible scenario – or the
best one). You can also fix an exchange
rate in advance or target a specific rate.”
Either way, buying foreign currency
from a bank will add to the cost and
is likely to give a poor rate, so using a
currency exchange service, or one of the
new apps such as Revolut or Currency
Cloud, is a better option.
There is no magic bullet to deal with
the uncertainty created by Brexit.
Trying to profit from it is fraught with
danger. People simply have to plan
around it.
PERFORMANCE OF POUND VS EURO SINCE JUNE 2016
Pounds Sterling (-12.57%)
2.5%
0.0%
-2.5%
-5.0%
-7.5%
-10.0%
-12.5%
-15.0%
-17.5%
7
n1
-20.0%
Currency
Sterling has been at the front-line of
Brexit-related troubles. Sarah Coles,
personal finance analyst at Hargreaves
Lansdown, says people have paid the
price for Brexit uncertainty over the
past two and a half years: “You are
getting around 13 per cent less in euros
today than you would have the day
before the referendum.”
“Unfortunately, as the end of March
creeps ever-closer, we’re still left with
an enormous amount of uncertainty. In
the short term, it means we can expect
more volatility, as various outcomes
temporarily look more or less likely. If
there’s a no-deal Brexit, we’d expect the
pound to take a hit, and conversely, if
there’s a deal agreed, we would expect
it to be more positive for sterling.
However, it’s difficult to know how
The outlook for UK housing
in the event of a no-deal
Brexit is not encouraging,
with analysis from the Bank
of England saying prices
may fall by as much as 30
per cent
encouraging, with analysis from the
Bank of England saying prices may
fall by as much as 30 per cent. David
Hollingworth, associate director at
London & Country Mortgages, believes
there are still two important supports
for the housing market – a lack of supply
and low interest rates. If anything, he
believes Brexit may keep interest rates
lower for longer as the Bank of England
acts to support the economy.
“The uncertain climate is bound to
affect people’s decisions and there is an
expectation that many will take a wait-
and-see approach. If you look at the
figures from the Royal Institution of
Chartered Surveyors and others, they
are pretty gloomy. That said, first-time
buyer demand appears to have held up
pretty well. There is a question of what
happens to interest rates on Brexit. If
much market expectations have been
priced in, and how much they would
react to either scenario.”
For those who need to exchange
currency in the near-term, there are a
number of options, says Coles: “You can
wait and see how things look closer to
the time in the hope you’ll get more for
your money (at the risk of getting less);
UK’s
– estimated hit to
om
annual income fr
Brexit to date
there is an orderly Brexit, rates would
probably climb gradually. If there is a
disorderly Brexit, the Bank of England
may be prepared to cut.” He believes re-
mortgaging activity will remain high as
homeowners try to lock in lower rates.
Ultimately, the housing market runs
on confidence and it is difficult to see
this holding up in the event of a no-
deal Brexit. For those looking to buy
for the first time or upgrade, there is
little to be lost in waiting to see the
outcome. For those looking to sell,
confidence may return if a deal is
announced, but there are risks that the
market could fall further.
%
n
b
7
0
.
4
£
5
3
[ BREXIT PLANNING ]
10 / 11
Cover Story
Source: FE Analytics
trustnet.com