Smart Currency Exchange has just published its brand new Property Buyer’s Guide to Currency. It’s written by Smart’s currency traders and is packed with insider tips on the safest way to sort out your currency when buying property abroad.
Here are a few highlights.
1. Safe as (British) houses
Buying a property abroad should now be considered as safe as buying in the UK, if you take normal precautions over the people you work with and get a good lawyer.
2. Big project, simple steps
Although it may seem daunting, if taken as a series of small steps buying abroad is really rather easy. In fact the legal processes in many popular countries are simpler than in the UK.
3. Could the pound be in trouble?
However, there are risks. The last two summers have seen a serious fall in the value of the pound. This was catastrophic for anyone already in the process of buying a home abroad as the price of the home they had committed to buying shot out of reach. With fears over a “no deal” on Brexit rising, it is entirely possible that the next six months will be very rocky indeed for the pound.
4. Don’t try to second guess the market
But nothing can be predicted. There are simply too many factors to consider, and too many big currency speculators whose every minute is spent in predicting market movements and acting in advance. In short, any movement you might hope to predict yourself will already have been “priced in” by some of the cleverest people on the planet. Your best option is therefore to protect your money.
5. Risk trumps rate, always
While getting the best rate available is important, with currencies changing every minute it’s more important to lock in the rate that you do get so you can plan accordingly. You can do that with a forward contract.
The number of people who can buy a home abroad is small, so you shouldn’t need to be a high net worth individual to expect a bespoke solution. You’re special!
6. You’re special!
There are a variety of ways of handling your currency transfer, so don’t accept any bank’s or FX company’s off-the-shelf product. Given that the number of people who can buy a home abroad is small, you should not need to be a high net worth individual to expect a bespoke solution. Trust us, you are special!
7. Don’t make Harry Kane take corners
Your high street bank will generally not be the best option for transferring currency for a property purchase. Why? Because transferring large amounts for the purposes of buying property is not their specialism. To use a football analogy, not using a property specialist for a property purchase is like making Harry Kane take corners.
8. Limit your exposure
If you are making stage payments, for example for an off-plan property or a property renovation, if you leave your currency to chance it will be impossible for you to know what your property is costing you, either from day to day or as a final project. However you can protect your budget either with a forward contract or potentially with a limit order. Read the guide for more details.
9. The property “therapists”
As one of our case study clients points out, for first time buyers abroad their currency trader can be “like a therapist”. For anyone nervous about sending a large amount of money overseas (and who wouldn’t be!), having their trader at the end of the phone and able to explain each process in detail can be the difference between securing their dream property (and lifestyle) abroad, and giving the project up.
10. Registering takes seconds
To register to trade takes just a few seconds over the phone or via a brief online form. We just take your details, check evident of an address and you’re done. There is no need to send any money or fill in any long forms. You can do that right now by calling +44 (0) 20 3733 1390.