Most of us may be stuck at home but the currency markets are open, and your budget and funds need protecting, especially if you are mid-purchase. Here we answer your urgent exchange rate questions.
At Smart Currency Exchange we have spent the last few days helping clients work through the difficulties that the coronavirus outbreak has caused to overseas buyers and those living abroad. Here we reproduce many of the questions we have been asked.
Even when we’re able to travel again, we don’t think we can afford to move abroad just yet. What should we do about our forward contract?
If you were far-sighted enough to book a forward contract when the pound was much stronger, you’re well set to buy abroad when the travel restrictions ease. However, we appreciate that some people now have other issues.
For example they may not have been able to sell their UK home. Or the weakened pound and the fall in the stock market will hit their pension income overseas. Or they may not be able to get the processes of buying completed in time, with professionals self-isolating abroad. If your purchase is delayed and you are approaching your contract end, call us today and we will work out a solution.
If you have any friends or relatives abroad, or stuck halfway through the process of buying a property abroad, who may need help with their international payments, please ask them to give me a call on 020 8108 5337, or click this link. I’m here to help.
We’ve decided to postpone our plans indefinitely. What happens with the currency we booked?
That’s no problem at all. We understand that this continues to be an unsettling time and you may wish to rethink your ideas. It depends on the circumstances but we should normally be able to cancel your contract and refund your deposit.
We’re midway through buying in France and now the price in sterling is 10% higher than when we agreed it. What are our options?
We know a lot of British people are in this position and you have our great sympathy. Although Covid-19 has caused the pound to fall this year, we saw similar drops after the Brexit vote and Theresa May’s disastrous election in 2017, so it is always worth locking in your rate as soon as you have agreed a price.
For now, if you can afford to proceed even with the weakened pound, you may decide to go ahead anyway. The exchange rate is only one of many costs, and today’s rate may be poor compared to last month, but is only marginally down on the rates we’ve seen for much of the past decade.
If you didn’t fix your rate and now cannot find the extra money to complete, your first option should be to the vendor to see if they will accept a lower price.
If you didn’t fix your rate and now cannot find the extra money to complete, your first option should be to go to the vendor to see if they will accept a lower price. That is especially true if you’re buying from a British seller who is coming home, and hence gaining from the weaker pound. Another option would be to try and delay the sale in the hope that the exchange rate improves.
We’re planning to buy in the autumn, but we’re worried that the pound could go even lower, what do you suggest?
As already pointed out, the current GBP/EUR exchange rate is only a little behind the average for the past three years. And even when we are out of this we will still have Brexit to deal with. So our usual suggestion applies, which is that if the current rate allows you to fulfil your plans to buy abroad, lock it in with a forward contract. It could still fall further.
We booked a forward contract in January at a brilliant rate. Does that rate still apply?
Of course. Those people who locked in their rate are can buy or complete at the advantageous rate when they set the contract.
We have a property in Spain that we aim to sell asap and send the money back to the UK. How can we ensure we get the current rate?
There are many reasons why the euro has strengthened against the pound even though Europe is suffering far more from the coronavirus. It’s all to do with businesses moving money really. But the main point is that it may not last. So if you’re planning to bring your money back to the UK (whether from a house sale or anything else) the way to lock it in is with a forward contract.
If you know of other people abroad who are struggling and may need help to move “home”, please do click here to introduce us.
We have a house abroad which we cannot travel to. How can we ensure that bills are still being paid, while also protecting ourselves from further weakening of the pound?
To address the first query, you can set up a regular payments plan with us from the UK, which ensures that all your payments are covered. On the second point, you can lock in today’s rate with a forward contract. Then you’ll know exactly what those payments will be over the coming year.