Rightmove Overseas’s official currency exchange partner, Smart Currency Exchange, answers readers’ questions

“I’ve just paid a reservation fee for a property on Spain’s Costa Blanca, which I found through an agent recommended by The Overseas Guides Company. I’m due to pay a 10 per cent deposit (minus the reservation fee) in a couple of weeks and then I’ll need to complete at the notary’s office and pay the outstanding balance a couple of months later. To make these payments I’ll need to transfer pounds from the UK to euros in my Spanish bank account. I’m conscious the £/€ is highly favourable for British people at the moment and want to make sure I take advantage of this. What should I do?”

Smart Currency Exchange trader David Comber replies

“Firstly, congratulations on buying in Spain, you must be excited about spending time there, or moving there, if that’s the case. Your situation is typical of many of our clients. The first thing to do is open an account with us at Smart so we’re ready to make a transfer or agree a contract when the need arises. Timing counts for a lot when it comes to buying currency.

“There’s a lot of speculation as to how strong the pound can go against the euro. You’ll have read how problems in the Eurozone, particularly in Greece and Spain, are helping to drive down the value of the euro, however no-one can say how much longer the pound can gain ground, especially given the UK economy is as fragile as much of the EU.

“Given your situation, we could suggest a few ways for buying your euros. Firstly, you could risk the pound continuing to gain value against the euro and simply buy your euros with a spot contract as and when you need them, so when you need to pay the deposit and then when you complete. This could work in your favour but if the pound starts losing value the cost of your property could change drastically.

“To secure a favourable rate and for the added peace of mind that the price of your property will remain the same in pounds as well as euros, take out a forward contract with us. As a Smart client, we will agree a rate for your future transactions based on the rate on the day you speak to us, so even if the pound weakens you still get the agreed rate. In this instance we will ask for a 5-10 per cent deposit of the total transaction with the remainder payable by an agreed date.

“Thirdly, you could use a combination of a spot contract and forward contract, so spreading the risk of the pound weakening. Here at Smart we treat each client according to their individual needs and welcome calls without any obligation to make a transfer.”

For more information, contact Smart Currency Exchange on 0808 162 0102 or download their free guide on making currency transfers by clicking here.