The British pound has been getting “pounded” by the recent downturn in the U.K. housing market. From June of 2008 to September of 2008 the pound exchange rate against the dollar has dropped from $2.00 to $1.75. Analyses are still predicting a further drop in the pound as the financial markets in the U.K. continue to adjust to the housing market decline.
So what does this mean to U.K. buyers who have been flocking to Central Florida to buy Vacation Properties? According to the recent sales reports for MLS we are starting to see a decline in the amount of U.K. buyers. Along with declining buyers we are also seeing that they are purchasing smaller vacation homes at lower prices. With the pound’s buying power dropping ,U.K. buyers are trying to stretch their buying power to maximize their purchase.
Real Estate agents in the Central Florida Vacation corridor have noticed U.K. home buyers purchasing smaller properties with the average sale prices dropping below $250,000. In years past, most U.K Vacation Home buyers were looking for “trophy homes” with large square footage and plenty of bedrooms. Now we are seeing more sensible purchases as their dollar is being stretched.
As in all cycles, this pressure on the Pound helps the U.S. dollar. Only time will tell if this trend will continue. For now, the Vacation Home market in Central Florida is still very attractive for U.K. buyers even with the weaker conversion rates.