Home » Currency 101 » How to ‘Brexit-proof’ your finances when buying property abroad

The Brexit debate is continuing in the House of Commons and no-one knows exactly how a final deal will look – or if it’ll be a no deal. If you’re buying a home abroad, it can be worrying, but not everyone’s putting their dreams on hold. Brits are the biggest portion of overseas buyers in many areas, so what do they know that others don’t? How have they ‘Brexit-proofed’ their plans?

1. Control the risk of changing exchange rates

The biggest risk of buying abroad during Brexit is the sheer amount of volatility on the foreign exchange market. Between April and August last year, £10,000 would have got you anything from €12,000 down to almost €10,000. Many of these sharp drops are triggered by political events – even a thumbs-up from a minister walking out of Downing Street can cause the pound to rise or fall.

This means that that beautiful property you’ve seen for, say, €200,000 isn’t actually for €200,000. In fact, you have no idea – and no way of knowing – what it’ll cost when you actually come to pay for it.

So, how do the thousands of Britons who buy in sunnier climes every year do it? For many, the answer is a forward contract. This fixes in the exchange rate of that day for up to twelve months, for no further cost. Thousands of our clients choose this to help guarantee their purchase of their dream home – because, even if the exchange rate moves, you’ve still got the original rate you agreed to.

In other words, you can sit back, relax and utterly ignore the news for twelve months! More importantly, you can draw up a realistic budget, because you know exactly how much your home will cost (and how much you’ll have leftover for decorating, removals and so on).

2. Get ahead of the price curve

Property prices are rising all across Europe. French homes have become around 3% more expensive over the last year. In Spain, prices have grown by 5.6%. However, in much of Europe, they’ve not yet reached pre-crisis levels – but they could well do soon, if trends continue. That means that locking in your exchange rate and buying abroad during Brexit could be a very smart decision.

You’ll find yourself ahead of the curve, purchasing a home when they’re still affordable, but with strong investment prospects. That’s worth planning ahead for!

3. Know the residency rules

There’s a lot of hype and sensationalism around residency in Europe after Brexit, but, as this research from Property Guides shows, it’s not as big of a worry as you might think. Firstly, anyone moving before 29th March definitely has their residency guaranteed. If there is a deal, then the agreement on citizens’ rights will come into play and free movement will continue for a two-year implementation period.

If there is no deal, anyone buying a holiday home will still not need residency – they can simply use short-term visitor visas, like holiday home owners in the US do. The ability to buy property overseas will be unaffected.

4. Make contacts with experts before buying

It’s tempting to think of purchasing overseas as a one-by-one process of going from specialist to specialist – first an estate agent, then a currency specialist, then a lawyer, then removals and so on.

Smart buyers, however, make sure all this is arranged before making an offer – and this is even more important when buying abroad during Brexit. Having everything organised – your finances in place, your lawyer chosen and so on – means you can make an immediate offer when you find something you like. In a time of volatility, this is crucial to making sure your dream of a home overseas comes true.

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