In 2021, after 40 Years of marriage, Jenny and Andrew finally started planning a permanent move to their favourite holiday destination in the south of France in their retirement. After the pandemic caused roadblocks in their plans since March 2020, they began their search in the summer of 2021.
The world looked to open up its doors again to international travel. After a few months of searching whilst holidaying in their desired location, they found their dream home in the Languedoc and put in an offer of 300,000Euros. At the point of offer at the beginning of November 2021, the GBP/EUR exchange rate sat at 1.18, pricing the property at £254,000 which fell within their planned budget of £255,000 and so they were happy to go ahead. Completion on the property was pencilled for the middle of February.
In late November the couple were expected to pay their 10% deposit on the property. However by then, and mainly due to the impact on the market caused by omicron, the value of the pound had fallen and it had dropped to the level of 1.16against the euro, increasing the price of their property to £258,600. At this point they did not want to lose their dream home and were forced to exchange their funds for their deposit at that lower rate, however they were concerned that the property was not any longer within their budget.
Worried about the cost and the impact of the exchange rates they decided to get some expert guidance from a specialist company, ahead of their completion in February. At moneycorp, their personal dealer explained to them the reason for the movements in the market and the different options available to protect their budget.
After several discussions, they decided the best option was to wait to see if the backlash form the omicron variant would settle and the rate would improve before the completion day. After close monitoring of the market, assisted by their dedicated dealer, Jenny and Andrew saw the rate rise to a 23 month high on the 4th January 2022 to 1.20 and decided to lock the rest of the funds at that rate using a forward contract. By doing so they now had certainty that their exchange will take place at this rate and additionally at a better rate than they initially intended so Andrew and Jen have managed not only to protect their original budget but they have maximised its value.
With the threat of omicron still present and challenges such as the ongoing Brexit negotiations and the political uncertainty created by the current crisis with the UK prime minister, we might continue seeing some volatility around the Sterling, Therefore, if you are involved in a property transaction or need to send a payment in another currency it is more important than ever to get some guidance.
With a Platinum Trusted Service Award 2020 from independent review site Feefo and 40 years of experience in the industry, FrenchEntree has been recommending moneycorp for more than 15 years. During this time they have helped thousands of client planning the best way to pay for their property as well as supporting them afterwards with any further payment from paying bills, mortgages to repatriating UK pension payments for those who have retired to France.
Furthermore, we have worked with the same person at moneycorp for more than a decade! You might be familiar with her as she often writes for our FrenchEntree magazine. She has 13 years’ experience in foreign exchange, and is a qualified European lawyer with experience in European transactions. Mar will be happy to answer any questions or enquiries to support you through these difficult times.
Opening an account is really easy and free of cost. You can register online or over the phone in a couple of minutes and for FrenchEntree there are no transfer fees in any payment.
Leave a reply
Your email address will not be published. Required fields are marked *