If you’re planning on relocating to France, a big question to ask is how are you going to shift your Pounds Sterling into Euros. There’s a lot on-line about this so it can be quite daunting. But the reality is that if you’re transferring a big amount – for example if you’re buying a property in France – the savings you can make can equate to many thousands of ££s. So here we’re going to take as look at the options for your consideration.
buying a property in france
Buying a property in France normally takes around 3 months, and during that time you can often see quite significant, and very rapid movements in exchange rates. And let’s be frank, very often such fluctuations are caused by things completely outside of our control, as we saw with Liz Truss government’s disastrous “mini-budget” in November 2022. So our advice is to plan your currency conversion well in advance, because oten foreign exchange is left to the last minute and doing this can have drastic circumstances on your budget. You may not even be able to complete on the property you have found and secured.
Here’s an example from a few years back, during the summer of2017 the ££s to €€s exchange rate fluctuated between 1.19 and 1.07. So if you were relocating to France at that time, and you had agreed to buy a house costing €300,000 when the exchange rate was 1.19, this would have cost you £252,100. But if you bought that same property 3 months later the exchange would have moved to 1.07, and so the property would cost you £280,373 – representing a £30,000 loss on the deal.
So protecting your budget by planning ahead is the key, and working with a foreign exchange specialist is by far and away the most prudent approach to converting your funds into Euros. So step one would be to shop around and start talking to some foreign exchange specialists. Just like selecting an international removals company, there are a range of providers out there, all offering different levels of services at different rates – so the more you speak to, the better position you’ll be in to make the right decision.
Why Shouldn’t I use a High Street Bank?
High Street banks are great, don’t get us wrong, BUT A high-street bank will offer an inferior exchange rate than a foreign exchange specialist, furthermore, an FX provider will not charge transfers fees and can offer a wide range of services designed to meet your precise needs. Just compare the numbers, and you’ll see.
Can I Trust an FX Provider?
Yes you can, just make sure that they are authorised by the Financial Conduct Authority as an Electronic Money Institution
A few Cunning Foreign Exchange Tools to Think about
A Spot Contract is the most typical exchange rate tool, and lets you convert currency immediately at the exchange rate at that moment. This is obviously the most convenient way to make a payment on the same day, where possible. It’s ideal if all your money’s available and you want to move quickly on something.
A particularly useful tool is the ability to book a Foward Trade which allows you to book the exchange rate when that rate suits your property budget; and pay for this currency trade at a later date – this could be up to one year in advance. By agreeing a Forward trade, no matter how the currency rate moves before you are able to settle the cost of your French property, the amount you pay will not change.
If you are aiming at a particular exchange rate, you could set us a Limit Order which allows you to pick your most preferable exchange rate, and your FX specialist will buy your currency when the exchange rate is achieved, within a certain time frame.
A Stop Loss order is handy if you can’t afford for your exchange rate to drop below a certain level, but you still have a little time to wait and see if the rate improves. It means you know your worst-case scenario. And should your order fill, you’d pay within the timeframe we agreed beforehand.
When shall I get in contact with a foreign exchange specialist?
You should get some guidance on the market early in the process as the exchange rates should be an element of your budget. Make sure you open a free account before you start inspecting properties either virtually or by travelling to France. If you find a property you can act quickly and if you don’t you can keep your account opened –at no cost or obligation- and benefit of market updates and the help of a market specialist.
Disclaimer: we’re just a bunch of Movers, we shift furniture and boxes from A to B – what do we know about finance? So don’t hold us to this article, its just our thoughts based on a few bits and pieces that we’ve picked up over the years. If you’ve banked with Lloyds or Barclays all your life, who are we tell you what to do with your money.
Provence Movers is an international moving company specialising on relocation services to France. We provide high quality door to door removal services at really attractive rates. So if you’re planning on moving to France, give us a shout and we’ll provide you with all the information that you need