When it comes to getting the most euros for your pounds, specialist currency companies are more proactive than banks, says Dan Waterman
Be proactive and squeeze every last possible euro out of your budget
When the UK voted for Brexit two years ago, sterling lost over 10% (14 cents) against the euro in just two weeks. It meant a €200,000 property became nearly £20,000 more expensive to buy.
People who were looking for property overseas back then were faced with another decision – whether to buy currency before or after the vote. Those who were working with an experienced and proactive foreign exchange (FX) company would have hedged their bets and secured some, most or all of their currency before the vote.
Why? While Brexit was at the time an unlikely outcome, the market loss far outweighed the market gain; so if the country voted for Brexit, some people’s dreams of buying a place abroad would be dashed.
A specialist currency company should work with you to understand your expectations and risk appetite when entering the FX market, to ensure you do not get caught out if the rate takes a tumble. This key data will also allow them to formulate a strategy, with the main aim being to maximise your funds potential. Registering with a company early in the buying process shoudl enable you to check if they are proactive or not, before you need to send your funds.
The e-wallet Some currency specialists offer clients a multi-currency account, known as an e-wallet. These are useful when buying a property in France, especially if you have yet to open a euro account there.
For instance, if the rate is near the rate you have budgeted at, you can buy the euros and leave them on the account. Alternatively, if the rate is looking favourable or you simply do not want to gamble on the weeks and months ahead, again you can buy the euros and leave them on account.
These accounts offer a 100% safety of funds guarantee, unlike the Financial Services Compensation Scheme (FSCS), which will cover only £85,000.
An essential tool when exposed to currency fluctuations is a rate alert. Working out when a rate starts to become unattractive or unaffordable to you is the first important step after deciding to buy property abroad, as this enables you to calculate your true budget when looking at French properties.
Setting rate alerts with an FX company saves you the headache and worry of watching exchange rates all day, every day. Both high and low rates should be set, to allow you to capitalise when the rate spikes and to counter if the rate drops.
You will be notified when either rate is hit, and it will be up to you to decide on whether to buy or not.
Special FX Most of you reading this will by now understand that there is an alternative to using the bank for sending money overseas. Going one step further is finding a proactive currency specialist, and not one that will sit back and wait for you to contact them when you are ready to move money.
The FX industry is unknown to most buyers, so allowing these companies to provide as much help as possible can only be a good thing for your pocket.
They should be in regular contact, keeping you informed of any important economic or political news breaking and letting you know when the rate hits high and low points.
Research tells us that customers expect a better rate from a currency specialist and that’s it. However, utilising an FX firm with experience on the market can see the biggest saving of all when exposed to currency exchange.
Setting rate alerts saves you the headache and worry of watching exchange rates all day
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