New research by the FX team at Close Brothers Limited Close Treasury revealed that British people who bought overseas properties in second home and investment hotspots without a foreign currency mortgage four years ago will, on the whole, have made significant financial gains, despite the recent volatility in global property prices.

According to Close Treasury, those who bought an Italian property in Euros in June 2005 would have seen the Sterling value of this increase by around 65%, four years later, aided by a +30% rise in property prices over that period. This increase was supported by the increase in value of the Euro by 27% compared to Sterling over the same period. In the last year alone, a UK investor in the Italian property market could have made a return of over 10%, despite just a +3% increase in local property prices, due to the strength of the Euro.

Likewise, those Brits who invested in property in Spain in June 2005 would have seen the Sterling value of their investments increase by +59% four years later, due to a combination of rising property prices and a fall in the value of Sterling against the Euro.

Taking these two factors into account, Close Treasury, said that the Sterling value of properties bought in Portugal, France, Switzerland and Spain for example in June 2009, were up 24%, 47%, 54% and 59% respectively on the corresponding figure of this year.

Mark Taylor, head of foreign exchange at Close Treasury, said: “When British investors calculate the value of an overseas property they bought a few years ago, they not only need to look at how real estate prices have changed, but also what has happened to the exchange rate between Sterling and the local currency.

“Even though overseas property prices tend to have fallen in the last year, in many cases the fall in the value of Sterling will have offset this, and many people may still have seen the value of their homes increase in Sterling terms.”