One of the most important, yet frequently overlooked areas of a foreign property purchase is the exchange of currencies.

Many buyers use their banks or traditional channels for the exchange of currencies. However, it is often more efficient and cost effective to use the services of a specialist foreign exchange company. 

A foreign exchange specialist could save a buyer of a foreign property a considerable amount of money, not just at the initial purchase, but also long into the ownership of the property.

Even if no other services are used, a foreign exchange specialist company will be able to secure a buyer the commercial exchange rate, rather than the tourist rate. 

Foreign exchange rates can be volatile and fluctuations can have a significant impact on a house purchase. For example a property in Dubai priced at 1,500,000 AED would have cost £208,867.10 in December 2004 but increased to £219,529.32 in mid March 2005 (an increase of £10,662.22 or 5.1% in fifteen weeks). Therefore, any efforts to minimise the effects of any such fluctuations can add stability and make the budgeting of a foreign property purchase easier.

There are various tools available via a currency specialist. These can include setting limits in which an agreed amount of a currency will be purchased if the exchange rate reaches or falls below a specified level. 

Future buying is also possible so that an exchange rate can be secured for future transactions. For example, with many ‘off plan’ property purchases, after the initial deposit, a number of future payments are scheduled. If a buyer want to achieve stability and secure a particular exchange rate, it is possible to book the currency as a forward order.

Once the property has been purchased, it may be useful to use a foreign currency specialist if one is expecting to make regular transfers into (for example to make mortgage repayments) or out of (to withdraw rental income received) a foreign currency. These can be set up with direct debits or standing orders and be more cost effective than via a buyers own bank.

We have decided to work with two of the leading foreign exchange specialist companies, Moneycorp and Foreign Currency Direct. Both have UK and international offices in the UK. We would be happy to forward an enquiry on to either or both of these companies on your behalf.

However, should you wish to contact the companies directly, please use the links and remember to mention that you have been referred from moneysouk.com.

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