Buying or selling a home in France during times of exchange rate volatility
Whilst nobody can predict for sure what the forthcoming weeks will hold for the GBP/EUR exchange rate, we want to try and illustrate the impact that volatile exchange rates could have on the purchase or sale of a property.
More importantly, we want to highlight the tools available through our dedicated international payment service (BIPS) to help you optimize your currency exchange during these uncertain times.
Let’s use the example of John and Sue!
John and Sue started searching for their dream property back at the start of the year and finally decided upon the seaside town of Royan in the Charante Maritime.
With £300,000 to spend, they calculated their euro budget using the exchange rate at the start of January, which was around £1 / 1.10€*, giving them a total of 330,000€.
But as their search progressed into March and April, they soon realised that thanks to the rising exchange rate (£1 / 1.15€*) their euro budget had increased to 345,000€. With and extra €15,000 they could start looking at properties with that extra bedroom or more outdoor space!
But unfortunately for John and Sue, currencies move in both directions!
With the widespread criticism of Prime Minister May’s most recent proposal for the ‘New Brexit’ deal, the pound has recently dropped to its lowest level in four months staying just above £1 / 1.13€*.
So, what does this now mean for John and Sue?
Quite simply, they will have less euros to spend than they did in April and this will more than likely impact their property search.
And when it comes to such unpredictable times, how easy is it to stay abreast of the changing exchange rates? After all, no one wants to be spending their day simply following the currency markets.
Helping customers stay up to date during these uncertain times
There are a couple of different tools that are available to John and Sue, to help them stay up to date with the exchange rates and optimize their currency exchange.
In the initial instance, they could simply set a RATE ALERT. Once John and Sue have decided on the specific exchange rate that they want to achieve, they set a simple alert and will receive an email once the market reaches that chosen exchange rate - whatever time of the day or week that might be!
They could also use the MARKET ORDER service to buy their euros as soon as the currency market reaches a chosen rate. The team at the international payments service will monitor the market on their behalf and the euros bought automatically when the desired exchange rate is achieved. No waiting around and this enables them to take advantage of any spikes that might happen outside of normal working hours.
When John and Sue do finally find their ‘coup de coeur’ then a FORWARD CONTRACT may also be of interest to help protect them against adverse movement. Effectively a ‘buy now, pay later’ service, it will allow them to lock in an exchange rate (for up to two years). They won’t even need to have all of the funds available up front and won’t need to worry if the exchange rate worsens again.
It’s also worth mentioning that when John and Sue are set up in their new dreamhouse, that their other services that can make moving funds from the UK to France that bit easier.
The REGULAR TRANSFERS service removes the stress from regular payments enabling John and Sue to secure an exchange rate for up to two years into the future. The process is fully automated by direct debit and is ideal when wanting to credit a CA Britline account with the same amount each month.
This could be a great option to help organise John and Sue’s pension transfers from the UK or simply ensure their bank account has enough euros in to pay those household bills.
However John and Sue chose to deal with their foreign exchange needs, they can always rely on UK bank beating exchange rates and great service from the Britline International Payments Service!
Don’t forget it’s available to all CA Britline customers and its quick easy and free to open an International Payments account online.
Alternatively, to find out more about the benefits of BIPS call us on 00 44(0)1753 752760 or go to www.britline.com/IPS
Currency rates detailed are for illustration purposes only
Britline International Payments Service, powered by HiFX. HiFX Europe Limited is authorised by the Financial Conduct Authority under the Payment Services Regulations 2017, registration 462444, for the provision of payment services. HiFX is also a registered MSB with HM Revenue & Customs. Registration number 12131222. HiFX accepts no liability whatsoever for any loss or damages suffered through any act or omission taken as a result of reading or interpreting any of the above information. HiFX is a limited company registered in England and Wales. Registered number: 3517451. Registered office: Maxis 1, Western Road, Bracknell, Berkshire, RG12 1RT.