After the referendum in 2016 the UK triggered Article 50, which serves notice on the EU of the UK’s intention to leave the European Union. But we all knew that.
Two years down the line and the D-date quickly approaches. All is still clouded by doubt and uncertainty; however, we have some good news about the financial sector.
What could it mean for financial industries?
The Financial Conduct Authority (FCA), the British governing body for financial enterprises in the UK, is currently supervised by The European Banking Authority (EBA), one of the European Union’s three supervisory authorities. They make the rules and enforce them across EU nations, including the UK.
There were doubts as to what changes the FCA would be able to make once they are no longer under the control of the EBA. This could have had a huge impact on mortgages, loans and banking here in the UK, whereas France would continue to operate following the EU’s rules and regulations.
Here comes the good news, reports show that to maintain competitiveness within European and world markets, the UK and the FCA will continue to follow European standards, even if they are not bound to them.
This is positive news for British buyers looking to finance their properties in France, as their rights should remain the same as they are now. However, the detail of the approach to regulations post exit will only emerge once the terms of exit are finally negotiated.
What does it mean for us?
Well, following the referendum back in 2016, the pound dropped around 10% of its value. What would happen to the sterling if we left the EU with no deal is unknowable. The UK has the lowest export growth of any G7 country, and EU tariffs on British exports could even kill off industries, for example, the car industry could be facing a 10% tariff, or lamb could be looking at 40-45% tariffs.
The main impact for British buyers will be the sterling vs the euro, which has once again risen to the 1.15 it was back in November 2018. And in February, it hit its highest point since April 2018.
On the 2nd of January 2019, a €400’000 property in France was worth £361’480; and on the 28th of the same month, that property would cost £347’000. A difference of £14’080; or enough to buy 2’816 bottles of French wine.
A currency broker can help you fix a rate for up to 2 years, so if the rate does drop back down again, you can secure the good rate we have now, and not lose out on your property purchase.
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