For those who are planning to move abroad this year, the COVID-19 outbreak and subsequent global travel restrictions may have put a pause on your plans.
If you’re already in the process of buying an overseas property, this is deemed by the majority of governments to give you just cause to travel to your new home. For those at the early stages of buying an overseas property, make sure you check the latest travel information when it comes to flying over for property viewings. Be sure to speak with your agent in country too, as many have managed to work around the issue of not being able to physically visit prospective properties by using virtual 360 tours. This is a good idea to consider for the early viewing trips regardless of the current travel restrictions. It could save you time and money whilst you whittle down your list of preferred places.
In a less than perfect situation, one positive most of us can take away is having more time to consider the things that are important to us, and being able to carefully consider our options ahead of time.
This is key when it comes to moving abroad, and something we encourage our clients to do with their international money transfers, as there are a number of contract options available to the savvy spender, and we like it when our clients get more than they expect for their money.
One of our most commonly used methods of buying currency is a forward contract, which is ideal if you have some but not all of the currency you wish to sell available, and is really useful for an overseas property purchase.
As the name implies, a forward contract is simply an agreement to buy a certain amount of currency at the current exchange rate, for a date in the future.
The reasons for this contract being so useful are twofold; firstly, you dont have to pay for it all up-front. You need approximately 10% of the overall value to secure your currency and can then pay for the rest of it any time in the three months prior to the date you have booked your contract until. So you can get your foot in the door, so to speak, ahead of time.
The other all important reason is the ability to lock in your rate of exchange for up to 12 months in advance, especially useful if youre paying for a property or other product and know the amount of currency youll need to pay for it. This enables you to plan your finances effectively, rather than waiting a few months before the property transaction completes and being dictated somewhat by the exchange rate available at the time, which ultimately can mean paying more than you planned for the same return.
A forward contract is ideal for when youre buying a place abroad, but can also be used for any other product or service you wish to buy in the future, if either you dont have the full balance available or simply want to take advantage of a favourable exchange rate at the time.
Many overseas property purchases involve a non-refundable deposit being paid by you to secure the sale. Using a forward contract also secures you from the potential loss of this deposit if the exchange rate was to move against your favour, leading you to rethink your chosen overseas home.
Absolutely. Many of our clients utilise this type of contract when selling up to come home, or if theyre moving on from their first overseas property to another country. Getting in touch with your account manager during the early stages of planning to move is the best way of finding out how a forward contract might help you.
Paul is a client of ours, who used a forward contract when he bought his house in France, and then again when he decided to repatriate his funds to the UK. Paul managed to save money on both currency exchanges compared to what he would have received from his high street bank by speaking with his Account Manager Daniel and talking through the options available.
Paul and his partner Angela originally moved to France in 2016, just after the now infamous Brexit referendum. He was in regular contact with Daniel, who explained the benefits of using a forward contract to lock in an exchange rate ahead of time. Paul felt that it was likely he wouldnt receive such a good rate after the referendum had taken place so decided to use a forward contract for the majority of his house purchase fund. He didnt need the funds straight away so left them with Foreign Currency Direct for a few months and then simply provided the beneficiary details for onward payment once the house purchase had completed.
Paul and Angela decided to move back to the UK in March 2020 and were understandably worried about the amount they would receive in sterling upon their return. Ongoing Brexit negotiations and the newly emerging global pandemic were both factors likely to create volatility in the currency markets, so Paul gave Daniel a call and explained his situation. As the sale of Paul and Angelas property hadnt yet gone through, he and Daniel worked together to arrange the deposit required to lock in an exchange rate. The currency markets did indeed go the way Paul had expected, which meant another considerable saving compared to if he had waited to carry out his currency transfer. This gave Paul and Angela a little more wiggle room when they bought their new home in Yorkshire and removed a lot of stress from what was already a slightly nervy time for them.
Heres what Paul had to say about his experience and the currency exchange process:
‘The process was so easy, there wasnt a lot for me to do. Daniel presented the different contract types, and all I had to do was choose the best one for me. A lot of people dont know that those extra options are available usually. If youre worried about the rate, its a Godsend really.
You couldnt write this situation… the levels of stress we had, and the worry about moving. Selling in France was very tricky. It soon became the case that the only person we dealt with while we were in France that was totally reliable was Daniel, he was clear & concise, hed tell you hed do something and hed do it. He was as good as gold.”
To stay organised whilst planning your move abroad, download our moving abroad checklist. Weve collated the all important things to remember in the year running up to your big move.
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Excellent service, clear and unambiguous advice and I was given an expert insight into currency fluctuations and the potential for gains as well as losses. Ultimately, they saved me money which is always a bonus when your uncertain about who to trust with your money. My advice? Don’t use your bank, it will save you thousands by using Foreign Currency Direct.
Having tried Transferwise and HiFx, Foreign Currency Direct is cheaper whilst still providing a very personal and professional service. I now wouldn’t use anybody else.
They are patient, constructive and always seem to look for the best possible way to assist their clients. Importantly, they do what they say they will do in the time frame they commit to. Emails and phone calls have a quick response – communication has always been excellent. Foreign Currency Direct plc will continue to be my first choice.
Good honest advice, simply the best.
Brilliant, fuss free service as always. They always deliver exactly what they say and in super fast timescales. Reliable, helpful and approachable.
FCD keep you informed and are there when you need to talk to them. Add to that the excellent rate and speed of transfer and you have the perfect company for your money.
Excellent experience every time. I always feel as though it is a personal service with the staff getting to know me as a person rather than just a customer. Special thanks to Dayle Littlejohn.