THE KNOWLEDGE
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2020 caused the GBP/EUR to drop from levels above 1.20 to 1.05, causing signifi cant disruptions to those in the middle of a property transaction at the time. On the other hand, some
movements are a bit more predictable. The current situation with infl ation has forced central banks to raise interest rates, which tend to have a direct impact on the value of a currency. Therefore, when statements from central banks are announced, experts are poised and ready for a rate move, and often this has already been priced into the market. Political events, such as elections or changes within the political/economic sentiments, could also cause substantial volatility. Ultimately, if you want to
avoid any disappointment on the fi nal price you pay for your property, make sure you take professional guidance from a foreign exchange specialist from the very start of your journey. This will ensure you understand your options, protect – or even maximise – your budget and enjoy the amazing opportunity to own a property in France. ■
Mar Bonnin-Palmer is Head of Partnerships at Moneycorp
mar.bonninpalmer@
moneycorp.com
moneycorp.com
can pose. Due to complexity of the process, together with the important sums involved, and the volatility of the rates, it is always a better idea to get some expert guidance. A good foreign exchange company will assign you a personal dealer as soon as you open an account. This is important, because your circumstances, budget and requirements are unique, and what works for one buyer might not work for another. Avoid dealing with companies that only off er an online service as you will be missing the very important knowledge and expertise that
will help you achieve the best timing and solution for you and your budget. Furthermore, getting the right solution for you should not cost you any extra; this is why a reputable foreign exchange specialist won’t charge you for their personal guidance.
5 KNOW YOUR OPTIONS: There is more than one way to buy your currency. This is probably another big diff erence to high street banks but also with online-only foreign exchange companies. Usually, both providers only off er the possibility to exchange your
funds via a ‘spot contract’, which usually involves immediate delivery. However, a good foreign exchange specialist will off er you a wider range of options to buy your currency which will work better for your transaction and/or your circumstances. The most popular currency tools for overseas property buyers are: The option to lock into a rate in advance of a payment via a ‘forward contract’. This is a useful option for overseas property buyers. It works for those who are very sensitive to rate movements and who
want to know exactly how much the property will cost them as soon as they commit to the purchase. By locking the rate, they lock the price and remove any uncertainty created by the exchange rates. Buyers could also decide to lock the rate to take advantage of a rate movement which would allow them to maximise their budget. You could also try to target a better rate of exchange via a ‘market order’. If your ideal rate is achieved within your timeline, the funds will be automatically exchanged at that rate.
FRENCH PROPERTY NEWS: March/April 2023 87
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