±JOIN OUR NEWSLETTER
±Compare Expat Providers
±Expat Focus Partners
±Latest Financial Articles
· Expat Focus Financial Update April 2018
· Expat Focus Financial Update March 2018
· Moving Abroad, Before And After Brexit
· Expat Focus Financial Update February 2018
· How To Navigate Brexit When Sending Money Abroad
· Expat Focus Financial Update January 2018
· Top Tips for Buying a Property Overseas in 2018
· Expat Focus Financial Update December 2017
· World Events And Currency: Why Politics Affect An Exchange Rate
Currency warning for festive season house buyersBack to top Back to main Skip to menu
Currency warning for festive season house buyers
To contact World First for currency transfer information or a no-obligation quote please click here.
The knock on effect of the Christmas and New Year period historically sees rates vary by as much as 5% between the end of November and mid-February. This means a €300,000 purchase could cost up to £20,000 more if the exchange rate moves against you and varies dramatically from the rate first used to calculate the cost of buying abroad. An extreme example is that a property valued at €300,000 would have cost £244,160 in November 2008 but the same property would have cost £287,081 at the start of January 2009. This is an increase of a massive £42,921 and all just down to exchange rate moves!
Of course there’s also the possibility that rates could move favourably for UK purchasers. However the exchange rate risk at this time of year is huge. Undoubtedly a number of Brits will be due to complete on their property purchases over the Christmas period and it is important they know the implications currency fluctuations can have. One move in the wrong direction and a dream property can climb out of reach if the price moves outside your budget.
Here at World First foreign exchange we offer a number of currency exchange services that can help clients completing on property purchases at this time of year.
Firstly, it is most sensible not to leave your foreign exchange transactions to the last minute. This could leave you exposed to the prevailing exchange rate and you may not have adequate funds to buy your property. With some of our products, you can protect yourself against negative exchange rate fluctuations.
One way of protecting yourself is with a forward contract which allows you to fix a rate for a date in the future (up to two years ahead). This means the rate and therefore the sterling cost of your property is fixed regardless of exchange rate fluctuations. Compared with the rest of the year, we have seen a rise of about 3% in forward contracts booked around the festive season.
Another is a currency option* which, like a forward contract, allows you to exchange one currency for another on a future date. However, with an option you can fix a ‘worst case rate’ and unlike a forward contract, if the exchange rate moves in your favour you can benefit from it.
These structures are becoming more and more popular especially given the recent volatility and unpredictability of the currency markets worldwide. We also offer a rate watch service which alerts our clients to exchange rate movements informing them as soon as a pre-agreed rate can be obtained. This can be risky though. If you wait hoping the rate will move favourably for you, you could run out of time and have to take the prevailing rate on the day.
If you plan ahead you can spend more time with your family this Christmas, and less time watching the exchange rates.
Have a happy Christmas from all of us at World First!
*World First is the only broker offering currency options to private clients.
Expat Health Insurance Partners
Our award-winning expatriate business provides health benefits to more than 650,000 members worldwide. In addition, we have helped develop world-class health systems for governments, corporations and providers around the world. We want to be the global leader in delivering world-class health solutions, making quality health care more accessible and empowering people to live healthier lives.
AXA - Global Healthcare
As the global healthcare specialists for AXA, the world’s number one insurance brand, we can help you get fast access to expert medical care, whenever and wherever you need it. All our plans include evacuation and repatriation, a second medical opinion service and extra support from a dedicated case manager if you’re diagnosed with cancer. You’ll also have 24/7 support from our caring multilingual team - we’ll always remember you’re a person, not a case number.
At Bupa we have been helping individuals and families live longer, healthier, happier lives for over 60 years. We are trusted by expats in 190 different countries and have links with healthcare organisations throughout the world. So whether you're moving abroad for a change of career or a change of scene, with our international private health insurance you will always be in safe hands.
Cigna has worked in international health insurance for more than 30 years. Today, Cigna has over 71 million customer relationships around the world. Looking after them is an international workforce of 31,000 people, plus a network of over 1 million hospitals, physicians, clinics and health and wellness specialists worldwide, meaning you have easy access to treatment.