Great Timing For Summer Buyers!

The GBP/EUR exchange rate has hit its highest level in 2023, breaking through the 1.14 threshold and nearing closer to 1.15 for the first time since December 2022.

For those currently in the process of completing on a property purchase, your property will have just gone cheaper, and no, I don’t mean they’ve brought the price down. Instead, this is simply due to the exchange rate moving in favour of those needing to buy euros with their pounds.

What does this mean?

This time last week (Tuesday 2nd May), a property worth €250,000 would have cost £220,458. Today, that property will only cost £217,770.

Even better for those currently looking at their budget for their home in France, they will now find that it’s increased.

At this point, those completing on their property may want to consider their options for making the most of this market movement.

This is where the expertise of a currency specialist comes in handy, as they give you the option to lock in a rate ahead of your payment using a forward contract*.

This means that if your payment isn’t due for another few months, and you want to take advantage of the current rate, a currency specialist can help you fix the rate for another two years. Protecting your budget if the rate were to fall during the few months before your completion and ensuring you’re unaffected by the movement.

 

What can you do to make use of this market movement?

Using a currency specialist opens the door to many options. It gives you access to competitive exchange rates and the expertise of experienced foreign exchange professionals who can help you plan your transfer to make the most of your money. They understand your situation and support you by tracking the rate and guiding you on the best trade time, helping you make your money go further.

Here are a few of the tools available to you and how they can benefit your currency exchange:

· Spot contract- A spot contract is an agreement between you and your FX provider to exchange money and buy foreign currency at the current exchange rate. This is the most common and traditional form of currency exchange and is suited to addressing any imminent currency transfer needs you might have.

· Market order- Using a market order, you can target a rate of exchange, and if that rate is then hit, we could either buy the funds for you automatically or notify you of your permission to buy. With the same principle, we can set up a limit order to protect your transaction in case the rate falls below a certain level. This will suit those with flexible timing and who are optimistic that the rate might improve within their time frame. One of the advantages of the market order is to ensure that the currency is bought at the desired level, even if the market only touches that level very briefly – including when the markets are closed for trading.

· Forward contract*- This allows you to fix a rate of exchange up to two years in the future in advance of payment. This tool is very popular among property buyers as it allows them to fix the full price of the property ahead of completion, giving them peace of mind and the certainty of how much they are going to pay for the property. But it is also a great way to take advantage of a positive rate movement.

 

In order to take advantage of the exchange rates, it is key to plan in advance and to get in touch with a currency specialist such as Moneycorp early in the process.

It is never too early. At Moneycorp, you will get assistance throughout your journey, from the moment you start looking for a property and planning your viewing trips to when you secure a property and have to pay the deposit and plan for completion.

Getting familiar with the exchange rates will help you set up your budget prior to putting in an offer. Contacting a foreign exchange specialist will help you understand your options and protect your budget from negative fluctuations – at no cost to you.