If you’re buying a property overseas, there’s a chance you’ll be buying in a foreign currency, so you won’t only have to make an international transfer, but you’ll also have to exchange the funds.

That’s where a currency specialist can come in handy.

If buying property in another currency, you need to remember that the fluctuating currency market could heavily influence the market price of your overseas home.

How does foreign exchange work for buying an overseas property?

At Rightmove, we understand that the currency market, also known as the foreign exchange market (FX), is where businesses and individuals come to buy and sell currencies. This market includes banks, large corporations, investment management firms, hedge funds, investors, and retail brokers.

Being well-informed about the foreign exchange market allows you to take advantage of favourable fluctuations in your desired currency’s exchange rate.

How influential are market rates?

The currency market moves daily, usually under 1%, but it all adds up. The GBP/EUR has gained close to 4% this month, while the GBP/USD rate has soared over 3.5%. The average annual movement for the pound-to-euro rate over the last few years has been around 10%.

To put that into context, let’s say you’re planning to purchase a property in France for €250,000 when the GBP/EUR rate is 1.15. This transaction would cost you approximately £217,778 (rounded up). However, if the rate falls to 1.14 – which often happens after significant data releases – your property in France could end up costing you an additional £1,520, potentially exceeding your budget.

 

How does a currency transfer work?

We asked our trusted foreign exchange service, Smart Currency Exchange to simplify the process of buying property in a foreign currency. Here are the six key steps involved in changing your currency for a property purchase with us:

1. Consult your Personal Trader

Discuss your requirements with your dedicated Personal Trader, who will help you understand your budget and find the best transfer solution for your needs.

2. Exchange rate quote

Your Personal Trader will provide you with a quote based on live rates, informing you of the value of your funds in euros, dollars, or any other currency relevant to your purchase.

3. Agree with the quote

Once satisfied with your quote, your Personal Trader will go ahead and purchase the foreign currency on your behalf, making the transfer legally binding

4. Confirmation and payment instructions

You will receive confirmation of your booked trade via email, along with the necessary payment instructions.

5. Inform us of your beneficiary account

Let Smart Currency know which account you want your funds to be paid into by sending an email, fax, or letter by post.

6. Fund transfer and allocation

Once your funds have cleared, they will be sent to the international beneficiary bank and typically arrive within 48 hours. The receiving bank will then allocate the funds to your beneficiary account.

Register with Smart Currency today or request a free quote today

How to make a payment with Smart Currency

Smart Currency offers several convenient payment methods for your overseas property purchase:

• Cheque in the post: Send a cheque by mail, which usually takes around five days to process.
• Same-day bank transfer: Initiate a same-day bank transfer, keeping in mind that your bank may charge a fee ranging between £15-30.
• Smart Currency’s faster payment system: Take advantage of their free and same-day transfer option through their faster payment system.
• Internet banking: Utilize your bank’s Internet banking service to make your payment, typically without any additional charges.

For a comprehensive guide on sending money overseas, we invite you to download Smart Currency’s complimentary resource, “The Property Buyer’s Guide to Currency” This guide covers various aspects, including currency risk and the benefits of using a bank versus a currency specialist.

Download the guide today to gain valuable insights into making your international property purchase a smooth and informed experience.

Written by PropertyGuides for Rightmove Overseas

If you are considering an overseas property purchase, whether for lifestyle or investment, opening a no-obligation account with FCA-authorised Smart Currency Exchange will enable you to benefit from their competitive exchange rates and specialist currency knowledge, ultimately saving you money and time. For more information, download Smart Currency Exchange’s free report or visit the Currency Zone.