UK Brokers: Huge Money Converted Back into Sterling from Bulgaria
Bulgaria is among the countries, from which UK foreign-currency brokers are reporting a staggering amount of money being converted back into sterling.
Most transactions back to sterling in recent months come from Spain, Bulgaria, France and the USA, according to data of Currency Index, as cited by The Telegraph Weekly.
"With Bulgaria, property investors who bought in the boom years, before the credit crunch in 2008 have had their fingers burnt. Even though Bulgaria is outside the eurozone, most property transactions are in euros," the article comments.
British expats, holiday homeowners and pensioners, living in Bulgaria, are selling up and come home in droves – or at least sending foreign money back to the UK.
Experts, interviewed by The Telegraph Weekly, say the reasons for the return are myriad, the most important being the inability to fund their lifestyle given the depreciation of sterling from its heights of EUR 1.50/GBP 1 to less than EUR 1.20/GBP 1.
Many pensioners who settled for a life in the sun have seen the purchasing power of their UK pensions plummet as the pound weakened and the cost of living soared in their new homes, making it too difficult for many to afford to stay.
In the past 12 months, currency broker HiFX has seen the amount of euros converted back into sterling rocket by 155%, despite the euro weakening recently.
During the past three years, there's been a 25% increase, year on year, in funds being sent back to the UK, according to Smart Currency Exchange.
The money coming back to the UK from the eurozone in just the last three months of 2011 went up 41%, according to World First, compared with the end of 2010.
It has also seen double the amount of Australian dollars being changed into pounds over the same period, as expats cash in on the best exchange rates in nearly 27 years.
Owning a second home abroad was once the preserve of the super-wealthy, but in the past decade a heady combination of TV property shows and cheap mortgages has convinced an estimated half a million Britons to buy their own place in the sun.
The value of UK-owned foreign property investments peaked at GBP 58 B in 2008, up from GBP 10 B in 2000.
Now however British owners of second homes overseas, including Bulgaria, are elling up due to falling rental income and the sliding value of their overseas properties.
Another non story from someone who will profit the most from any panic that may be caused.
The only "true" statement in the article is that there are a myriad of reasons for people doing whatever they are saying is being done.
I doubt very much that pensioners (or anyone that is really living here, as opposed to coming for the odd few days a year) are selling up let alone sending money back to the UK. For a start, the difference in exchange rate is, to a great extent, made up for by the tremendous interest rates available in BG and, secondly, there is no way that any pensioner could live so well in the UK as they can here.