Are you a UK or US citizen looking to buy property in France?

Buying a new home in France should be an exciting and stress-free journey. You shouldn’t need to burden yourself with the stress of working out the best ways to exchange your funds for the purchase, but in reality, if you are not holding Euros this is unavoidable. 

For those who have not been exposed to currency markets before, and particularly not for the value of a house, it can be quite a daunting and stressful process. There are also many misconceptions that it can be lengthy and expensive process. 

This, however, is not necessarily the case…. 

Why’s that you ask? 

Using a currency specialist for your transactions offers a lot of benefits. Not only will you have access to competitive rates of exchange, but you can also benefit from the expertise of a market specialists who will discuss your requirement in full, providing guidance on the market and useful FX tools (explained further down under currency tools) to help protect your funds when the market moving against you. 

Take a look at a recent case of how this has been achieved when using Moneycorp. 

Case study of Harvey and Ella 

Harvey and Ella had dreamt of buying a holiday home in the South of France for years where they could enjoy the school holidays away with the family. 

19th of June  

Harvey and Ella were introduced to Moneycorp by a Harvey’s brother who had used our services to also purchase their property in the south of France.  

Harvey and Ella were previously looking to use the bank to make their transaction however, Harveys brother made him aware that he utilised a forward contract during their property purchase with Moneycorp which ultimately saved them money on the exchange. 

They had a free consultation to discuss the options they could use to facilitate the purchase of 350,000 Euros for their French property. The GBP/EUR rate at the time of their initial consultation was 1.16. 

23rd of August 

Having received guidance on the market following upcoming and recent data releases as well as being made aware of a forward contract that Moneycorp offers, they decided to lock in the GBP/EUR rate of 1.1737 (this required a 10% deposit).  

This secured them 350,000 Euros for £298,202. 

23rd of September  

Property completion day was here, and the couple paid the full amount at the previously agreed rate of 1.1737.  

During the past month, the GBP/EUR rate had moved to down to 1.1480 due to a combination of various political and statistical data from the UK and Europe. If they had waited until the completion date to exchange their funds, €350,000 would have cost them 304,878. 

Overall, they saved £6,676.  

Harvey and Ella were pleased to let us know the spare money they had set aside for their budget will be going towards a new kitchen at home which they hadn’t previously thought they would be able to afford yet. 

Currency tools for the overseas property buyer 

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

• Spot contract- A spot contract is an agreement between you your FX provider to exchange money and buy foreign currency at the present exchange rate. This is the most common and traditional form of currency exchange and is suited to addressing any imminent currency transfer such as the initial deposit, taxes and fees. 
• Forward contract * – This allows you to fix a rate of exchange up to two years in the future in advance of a payment. This tool is very popular among property buyers as it allows them to fix the whole price of the property ahead of completion giving peace of mind and the certainty of how much you are going to pay for the property.  
• Market order- you could target a rate of exchange and if that rate is then hit, we could either buy the funds for you automatically, or notify you for 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 suits those who have some time on their hands and 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 – and this includes when the markets are closed for trading. 

Finally……….The importance of Time 

Time is your biggest friend. The more time you have, the more opportunity you have to take advantage of these tools and increase your budget. It also allows you to add some certainty around your budget. As soon as you know your budget, you need to be speaking to a specialist.