Posted on 06 March 2013
British people searching for a property in the French Alps in recent weeks will be painfully aware how much the exchange rate has gone against them, to the extent that since the start of the year property prices have effectively increased by around six per cent for Sterling buyers, and for no other reason than the euro strengthening against the euro.
On 1st January 2013, the interbank exchange rate was £1/€1.231, however by 1st March this had fallen to £1/€1.158, making a €250,000 property around £12,800 more expensive to a buyer whose purchase funds are still in Sterling.
“Too often buyers forget to factor in movement in the exchange rate when buying property in France or Switzerland” said Julian Walker of Skiingproperty.com. “As you can see, recently this has affected the price of property dramatically in the space of just two months – the time it often takes between paying a deposit and completing on a property, one that could end up costing you more in Sterling than you initially expected.”
One way to minimize your exposure to exchange rate movement once you have found your ideal ski home in the Alps is to forward buy currency using a specialist currency firm. This means you are guaranteed an agreed exchange rate when you come to transfer the necessary funds to France from the UK for completion a month, two months or more later. In effect, forward contracts allow you to secure the price of your French ski property in Sterling, as well as in euros. Given the uncertainty in the currency markets, not to mention the economies of the UK and Eurozone, they are a useful option for bringing peace of mind when buying overseas property.
With or without a forward contract, currency specialists are recommended for sending money overseas as they consistently offer exchange rates that are 2-4 per cent better than those your bank would offer you to make a currency transfer.
For more information on currency specialist firms, contact Skiingproperty.com.