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Posted by currencytoday on 11-Aug-2008 :: Views: 674 :: Posting ID: 36623

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You’ve been thinking about buying overseas property for some time; you’ve researched the market well, even made a trip or two out there to see for yourself. Finally, after getting everything in place and saving all you need, you’re ready to put pen to paper and start a new life somewhere else. Then, just as you’re about to transfer your cash, the exchange rate crashes, increasing the price of your property by hundreds, even thousands of pounds.

Unfortunately, this is becoming an all too common scenario of late, proving to be a real unforeseen obstacle for any property buyer, in some circumstances making it hard to go through with plans that had been laid out for a long time.

If you find yourself in this situation the first thing to do is talk to an expert who understands the market and deals with these eventualities on a daily basis.

A specialist such as Currency Today can provide impartial advice and may suggest one of the following to help you get your plans back on track and not fall at the hand of an unpredictable market.
1. Wait

Whilst this offers no guarantee of improving your situation, it can be effective in ensuring you do receive an improved rate of exchange. With more time, you are able to employ one of the exchange rate mechanisms that a specialist broker could provide for you. For example, you could set a ‘limit order’ where you set a rate higher than at present, and if the market hits that level at any time night or day your currency will be automatically bought for you. A ‘stop order’ would similarly prevent the rate from reaching in this case a level below the one that you set, to prevent any further losses. This may not suit, but if you can delay payments or put a property purchase on hold it could be beneficial, as you would affectively have little to lose and more to gain.

2. Look into the market

To give yourself an even greater chance if you do decide to see if the market improves, you could find out when any pertinent financial data is being released that may affect the market. A Bank of England interest rate announcement for example would often move the market, a stronger pound often resulting from a rate increase. A currency specialist would have all the information regarding financial data and their release dates, and should be able to advise you when one is due that could see your exchange rate improve as a result.

3. Choose a different exchange rate

Whilst it may be hard to alter plans to buy in your chosen area, if the exchange rate is too pricey a factor to ignore, why not consider buying somewhere else, where you can get more local currency for your pound. If you take into account that all the leg work and research you’ve done could be applied to any area, you can save time in that regard, and may even come upon an area that seems even more suitable for investment that you might not have previously considered. Sterling is strong against the U.S dollar currently for example, and whilst the property market in the U.S is struggling at this time, the same currency is accepted in many countries and continents with many different markets to consider, each with their own possibilities.

4. Spread the payments

If you can, find a payment plan that gives you more time and flexibility to complete. In this way, the options you have to find a better rate of exchange increase. It is also more likely you can arrange the payment to be made when the rate is more favourable. The rate will rise and fall in peaks and troughs, but if you’re prepared, and take advice from a currency expert, it is possible you can ensure you transfer at the time of a peak rather than the opposite.

5. Don’t Panic!

Like any financial market, the foreign exchange market is out of your control and should not cause undue concern for this reason. If you have lost out on the rate, you can ensure by using a foreign exchange company at least you could save 1-4% over the banks and building societies. Also, always calculate any possible gains in the local property market of your planned purchase and see if it weighs out any loss on the exchange rate.

Talking with experienced currency specialists will always provide you with a better picture and hopefully a clearer one as to what your next step can be to negotiate the road ahead if the question of the exchange rate is a concern.

Talk to Toby for all your currency needs 0207 183 2291
Visit our website Currency Today

• Contact: Toby Fischer
• Tel: 02071832291
• City: london
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