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Flocking Home: British Expats Returning To The Nest?
HiFX sees huge increase in euro and dollar repatriation to the UK. Historic lows for the pound means cost of life on the continent has risen, but selling up could mean cashing in
More than double the number of British Expats are selling up their life in the sun and returning to the UK since the impact of the economic crisis hit last year according to foreign currency specialists HiFX.  The pound’s fall to historic lows in recent months has meant that the cost of living or running a holiday home on the continent has risen to unaffordable levels for some, while others are looking to cash in on sterling’s weakness by selling up.
HiFX, which manages the transfer of over £200 million back to the UK each year, has seen a 180 per cent increase in the number of euro to sterling transactions and a 120 per cent increase in the number of US Dollar to sterling transactions in the past six months, compared to the same period last year.  From customer feedback, HiFX believes that almost 40% of repatriating Brits are being forced to do so as the cost of living rises, whilst another 25% are cashing in their international assets which are now worth significantly more than they were as a result of Sterling’s significant depreciation.
Brits who own a holiday home In Europe or are spending long periods of time on the continent are being particularly hard hit.  Since October 2008, they have seen the value of the pound in their pocket plummet by just over 20% and as a result, many who stretched their finances to fund their dream home in the sun find themselves unable to afford their Euro mortgage payments or just general living costs.   British pensioners have been particularly hard hit.  Not only have they seen the Euro value of their pensions fall dramatically, but also those who were living off hard earned savings have seen their interest rates demolished due to the credit crunch.
But there is a silver lining for Brits who own property and other assets such as savings and investments in Europe.   On the flip side, current exchange rates mean that the value of these assets has appreciated significantly and as a result, many are taking the opportunity to cash in their investments to pay off debts or purchase property in the UK following the significant fall in UK property prices.  .
If a British vendor first put a property up for sale in October 2008 for €200,000, they would have been expecting to receive £153,846 (exchange rate of 1.30). However, if the vendor had managed to sell the property this month, due to the exchange rate they would have received £178,571 (exchange rate of 1.12) and an unexpected windfall of £24,725.
Mark Bodega, director at currency specialists HiFX comments: “In the current economic climate, most people are feeling the pinch and anyone surviving on a pension, salary or interest payments from the UK will be hurting more than most.  Volatility in the currency market has seen the value of Sterling fluctuate by over 21% against the Euro in the last 12 months. For some people with overseas properties, that will have meant a rise in costs that they just can’t afford any more.  On the other hand, this volatility does mean that it is possible to take advantage of the exchange rates and  falling UK house price by selling up in Europe and getting more bang for your buck back home.  Sellers should be aware though that buyer numbers are low at the moment.  Those that are buying will be negotiating hard, particularly as most come from mainland Europe are looking to cash in on Euro appreciation.”
When repatriating their wealth, it is essential that Brits shop around and use a currency exchange specialist rather than their bank to send their funds back to the UK.  Currency specialists such as HiFX, charge on average 4% less on foreign exchange transactions than high street banks. On an average transaction size of €200,000 this can mean losing out on as much as £7,000 when they return to the UK.
Furthermore, banks subject Brits to a number of additional bank charges and commission fees when transferring funds. Some overseas banks can charge as much as 2% of the amount transferred in commission plus a transfer charge; usually £25 for each and every transfer. UK banks are also guilty of charging a receiving fee, typically 0.5% of the amount transferred. Currency specialists like HiFX will transfer your money to the UK completely free of charge.