On Thursday 25th January, we were joined by Danny Cook for a webinar titled โHow to minimize currency risk for your overseas property purchase in 2024โ, for those of you who missed it, weโve summarised the webinar below and included a replay for you to watch on-demand.
What is currency risk?
Danny Cook, account manager team leader at Smart Currency Exchange shared with us this analogy:
โIf you walked into a casino with ยฃ25,000, would you risk putting it all on red or black? If youโre not okay with the possibility of losing it all, then currency risk is something to consider when buying a property overseas.
The exchange rate for pounds to euros moves on average 10% in 12 months. That means, that for a ยฃ250,000 home, the price of your dream home overseas could fluctuate as much as ยฃ25,000 either way.
So, if youโre not prepared to pay an additional 10% of the property price, perhaps itโs time to speak to a currency specialist?โ
How can I protect my property budget?
Well, the first step is connecting with a trusted currency specialist. If possible, opt for one with experience helping individuals manage overseas currency transactions.
We recommend Smart Currency Exchange to all our readers as they have 20 years of experience in foreign exchange and specialise in overseas property.
The first step in protecting your overseas property budget would be to register with Smart Currency Exchange, itโs free and thereโs no obligation to trade.
Register with Smart Currency today
Then, schedule a call with your assigned account manager to discuss the best options for you and your budget.
Forward Contract
The forward contract is possibly Smart Currency Exchangeโs most popular service for overseas property buyers. Itโs a legal contract that allows you to lock in an exchange rate for up to 12 months at a time.
This provides peace of mind, knowing that youโll pay the same price you agreed to pay for your overseas home by the time you complete the transaction.
For example, if you agree to buy a โฌ200,000 property abroad when ยฃ1 = โฌ1.20, it will cost you ยฃ166,600. But itโs possible that by the time you come to complete the transaction, ยฃ1 only buys you โฌ1.15, so the price has shot up to ยฃ173,900 โ another ยฃ7,300.
For a more tailored example, use our forward contract calculator.
Why not get a free quote from Smart Currency Exchange today?
For more guidance from Smart Currency Exchange, talk to your account manager today or watch a replay of the webinar below.
