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Change of plan (currency crash)

Discussion in 'General Property Chat' started by ellejay, 10th Oct, 2016.

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  1. ellejay

    ellejay Well-Known Member

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    So we finally sold a rubbish ip in the UK, rubbish because it didn't grow and also had a low yield. The plan was to bring the cash over for a deposit on a commercial property. With the pound dropping by the day I'm now wondering if we should leave the money in the UK and purchase a better yielding IP or 2 there(probably 2 cheapies at 10% yield as we're taking a break from work and want cash flow). I have an ip on the market elsewhere and could possibly get most of the commercial deposit from there.

    On the other hand I don't really look forward to the hassle of buying uk ips with all the regs for landlords and high stamp duty. We wouldn't get a mortgage so would be cash buying.

    Anyone have any other ideas?
     
  2. MTR

    MTR Well-Known Member Premium Member

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    Why not US, markets are booming
     
  3. ellejay

    ellejay Well-Known Member

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    The idea was to avoid taking the hit on the lost value of the pound.
     
  4. MTR

    MTR Well-Known Member Premium Member

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    oops
    Depends on rate I guess, as you will achieve growth and probably a better yield in US
     
  5. ellejay

    ellejay Well-Known Member

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    Yep, just trying to calculate the better option, transferring or not.
     
  6. Graeme

    Graeme Well-Known Member

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    I'm in a similar position.

    Property in the UK is still expensive, and the FTSE is at record highs too. In fact, there's a suggestion that the stock market is currently negatively correlated to the currency, so as the pound falls, it trends up.

    I'd be inclined to sit it out in cash for the time being. I think that the currency markets are pricing in a hard Brexit, and if the politicians step back from that, the pound will jump.
     
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  7. Sticks

    Sticks Member

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    With the pound where it is I would want to leave my money in the UK at the moment.

    Rather than hold in cash, I would look at options to invest in either share market, investing in currency pounds with a world index tracker, if wanting to stay in property and not wanting the hassle of individual property ownership can invest via a peer to peer lender.
     
  8. Graeme

    Graeme Well-Known Member

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    If you're buying into a world index tracker, then there'll be an implicit currency conversion in there. So if (or when) the Pound recovers, you'll take a hit.

    I'm tempted to shift my money out of the stock market now, and wait a few months. I think that there's a good chance the FTSE will fall later in the year, or early next year, when the implications of Brexit sink in, or Article 50 is invoked.

    @Sticks if you're holding a bunch of Euros, then buying into the Pound might not be a bad trade.
     
  9. Birdseed

    Birdseed Active Member

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    @ellejay We are also in a similar boat, except we are bringing our money across to buy a PPOR here. I'm hesitant to pull the trigger but I have a feeling deep down that the Pound may not come back to a decent level for a few years.... so the balance is between perceived trading cost now vs opportunity cost over the next few years. I reckon if we don't pull the money in the next few weeks then it will be staying there for quite a while.

    If anyone out there would like to lend me their crystal ball please feel free to get in touch!
     
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  10. Sticks

    Sticks Member

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    @Graeme - exactly, since the brexit vote have been slowly moving to GBP. have time frame of 5-7 years to revert to before (2 years to exit, then a few more years after that as everyone figures out the sky has not fallen in). In that time am holding in the same index fund as I would have been holding here.