Sterling is bobbing around in uncharted waters, with even exchange-rate experts unable to predict how the pound will fare against other currencies. It’s no surprise, then, that anyone thinking of buying an overseas bolthole is feeling a little, well, adrift.Earlier this month, news that the Bank of England was raising interest rates — usually a trigger for a stronger pound — caused the UK currency to fall back against the euro and the dollar. According to Laith Khalaf, senior analyst at the financial adviser Hargreaves Lansdown, the decline was partly due to the Bank indicating that rates are unlikely to rise again soon.

“In theory, an interest-rate hike should be positive for the pound and negative for government bonds,” he says. “But the pound fell while government bonds rallied, ripping up the rulebook.”

All this spells bad news for overseas investors, as the value of the pound has a huge impact on how much you pay for a property abroad — and the continuing Brexit talks mean sterling is likely to remain volatile.

Say you are in the process of buying a four-bedroom farmhouse in Provence, priced at €500,000. At last week’s exchange rate of €1.13 to £1, it would cost you £442,478. If the pound strengthened to the point where £1 bought €1.30 — the level at which it stood just before the EU referendum in June 2016 — you would need just £384,615. Yet should the pound fall to €1.08, as it did briefly in August, the price would rise to £462,963.

It’s the same story for anyone buying a property in America. A $1m villa in Florida, for example, would have cost a British buyer £671,141 in June 2016. Last week, though, the price would have shot up by £88,062.

“A positive resolution to some of the big Brexit issues could see sterling rise, but prolonged uncertainty or a negative outcome could see it fall back,” Khalaf says.

You don’t have to be a slave to currency fluctuations, though. Here’s our guide to navigating your way through the market.

Investors are getting less for their money in Florida

What’s the outlook?
Weak it may be, but the pound is far from the only currency being lashed by political and economic uncertainty. The euro had its worst week of the year last month, losing 1.6% against the dollar in the wake of the Catalan independence vote.

Despite all the fears over Brexit, the pound has gained almost 6% against the dollar and held its ground against a range of other currencies in 2017. In Iceland — which topped Knight Frank estate agency’s latest global house-price index, with annual growth of 23.2% — £1 hit 139 krona last week, up from 137 a year earlier.

Most of the big banks believe the pound will strengthen against the euro by the end of 2018. It could be a bumpy ride, though. The French bank BNP Paribas expects sterling to weaken to €1.09 by March 2018 before climbing back to €1.14 by the end of the year, and the financial services giant Nomura believes that £1 may drop to €1.11 before things start to improve.

Where to buy?
Even though British buyers are taking a hit on currency, falling prices, especially on the Continent, could more than make up for it.

Property values in Italy have been declining for the past eight years and are now as much as 30% lower than at their peak in 2008. Buyers are cottoning on, and sales volumes have risen by 33% since 2013, according to Savills estate agency. It tips Rome as a good bet for buyers — especially if you can find a property with a terrace or a view. “Quartiere Trieste is home to a mix of students and young professionals,” says Paul Tostevin, associate director at Savills World Research. “It offers good value compared with the neighbouring district of Parioli, but the historic centre is just as accessible.”

For even greater bargains, head to Portugal — prices in some Algarve resorts have fallen by up to 50% from their 2008 peak, Knight Frank reports. Motorway upgrades and a €32m expansion of Faro airport have provided a boost, as have the region’s 37 championship golf courses.

Lisbon, too, is benefiting from renewed tourism and increasing interest from those seeking holiday homes. Two-bedroom flats at the Belas country club, a community centred on a championship golf course, 20 minutes’ drive from the city centre, start at €270,000 (realestate.belasclubedecampo.pt).

Buyers are also looking to France, particularly Paris, according to Annick Dauchy, property business development manager for the buying guide FrenchEntrée. “Second-home buyers are keen to take advantage of President Macron’s commitment to reduce taxes for property owners,” she says. “And Paris offers a great deal of stability, which London no longer can.” A one-bedroom flat a stone’s throw from the Elysée Palace is on the market for €570,000 (frenchentree.com).

Both Goldman Sachs and BNP Paribas expect the pound to flag against the dollar over the next six months, so you might be best locking in the exchange rate now (see below) for your villa in Florida. A trendy house in Fort Lauderdale — with two bedrooms, and Cassina and Roche Bobois furnishings — is on sale for $1.395m (knightfrank.com).

For outside bets, look at Japan, but hold off for now — Barclays believes the pound could strengthen against the yen in the medium term. Savills is backing the Niseko ski resort as one to watch, thanks to its plentiful powder and well-supported luxury market. Boutique hotel-style flats there start at 120m yen (£800,000; savills.com).

How to buy?
High-street banks handle 80% of all currency transfers, but the fees they charge can make them an expensive option. With a specialist broker, you will generally get a faster service and a better exchange rate for less. Brokers also offer tools such as forward contracts, which allow you to fix your exchange rate for up to two years.

Brian Gibb, 42, used FC Exchange to set up a €70,000 forward contract 24 hours before the Bank of England’s interest-rate decision — despite having two weeks before exchanging contracts on a chalet in the French ski resort St-Gervais-les-Bains. “I decided to hedge my bets as I didn’t have much faith in a long-term plan coming from the Bank of England,” says Gibb, a firefighter from Edenbridge, Kent. “It looks as if that decision saved me a few thousand pounds.”