Could endowment policy cash help pay for foreign property investments?

Publication date | 13/07/2010

While many people enjoy the idea of owning a home abroad, the financial realities of such an undertaking can be off-putting.

One way in which consumers may be able to make their dreams a reality is by surrendering endowment policies.

According to Robin Wilson, head of overseas at Rightmove.co.uk, some of those keen to purchase homes outside the UK are waiting until the exchange rate improves.

Chris Radford, chief executive officer of aap, the UK's biggest buyer of endowment policies, said some of its customers who were keen to realise their foreign property aspirations had decided to sell their underperforming endowment policies to generate additional cash.

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Mr Wilson suggested that some consumers are biding their time and waiting until the exchange rate between sterling and the euro improves.

His comments came after the release of figures by the Bank of England, which showed that the pound has improved against the euro in recent months and the rate stood at 1.1956 on Thursday July 8th 2010.

This will not lead to an immediate rush on property buying, he added.

Mr Wilson stated: "Without time pressure, rising sterling rates may have the opposite effect as people sit on their hands and try to call the top of the market before splashing out."

The expert went on to note that as the exchange rate gets better, Britons will be able to afford more expensive residences in other countries.

Those who cannot pay for the home they desire despite improvements in foreign currency trading rates may opt to sell an endowment policy as a means of generating more money.

Selling endowments may help consumers realise foreign property dreams

Mr Radford, from aap, said some of its customers who wanted to purchase homes abroad had decided to sell an endowment policy to give them more money.

He added that should aap make an offer to purchase an endowment policy, it will always pay more than the surrender value offered by the insurance company.

Reasons to sell your endowment policy