The combination of a weaker currency, high interest rates for savers and low living costs makes Turkey one of the most attractive places for British property buyers and expats in 2015, said Spot Blue International Property in May.
Sterling has gained around 14 per cent against the Turkish lira since the start of 2015, with the current exchange rate approximately £1/4.12TL. Compared to May 2014, the Turkish currency has got even cheaper for British people with today’s rate around 18 per cent better than a year ago, and compared to five years ago it has swung 85 per cent in favour of British people.
“Lots has been made of the weaker euro benefiting Brits buying and living in Eurozone countries, but let’s not forget Turkey,” said Julian Walker, director at Spot Blue International Property. “As it is, we typically sell Turkish property in euros to British people. After that, British people gain again when they buy lira for day-to-day living costs. Even taking into account Turkey’s inflation rate, which is forecast to remain on a gradual downward trend, the exchange rate is making a difference for British owners and expats. Over the last 12 months, let alone the last five years, Sterling’s gain against the Turkish lira has been greater than it has against the euro.”
The high interest rates offered to savers in Turkish banks is also benefiting British expats. As of May 2015, local banks are typically paying 8-9 per cent interest on deposits in specified Turkish lira savings accounts, with interest paid monthly.
“It’s not uncommon for British people to fund or part-fund their monthly living costs in Turkey using interest earned on savings in their local bank,” added Julian Walker at Spot Blue International Property. “This doesn’t suit everyone’s financial situation, but it allows people to split their assets and income between a Sterling based pension, for example, which is exposed to the exchange rate, and cash assets and income based in the local currency, which could be benefiting from the bank’s high interest rate.”
Adding to Turkey’s appeal is the comparatively low living costs for British residents. Council tax is still considerably lower than in the UK, typically £50-£100 a year, while shopping in markets and the local supermarkets can keep living costs more affordable than in the UK.
Meanwhile, Post Office Travel Money confirmed this month that tourist prices in Marmaris, used as a barometer for the British holiday market in Turkey, are now lower than last year. This, said the Post Office, was on account of the exchange rate counter-acting inflation, adding that Turkey could emerge as the great value destination for British holidaymakers for summer 2015.