Currency exchange is something that buyers often leave until the last minute when purchasing an overseas property, when in fact it should be considered much earlier.
Find out more about the process below.
Why is currency exchange important?
Buying abroad will almost always involve a transfer of money between currencies, meaning that if you skip your research and/or arrange a transfer through a high street bank, you could end you up paying over the odds in fees and poor exchange rates. Using a specialist currency company, such as A Place in the Sun Currency, will ensure you get the support and expertise you need, as well as a competitive exchange rate. It is worth noting that Spanish banks have taken a particularly aggressive stance to charges post-Brexit when receiving transfers from the UK, which means it's more important than ever to make sure you plan and check with a reputable currency broker in order to minimise any local bank charges when making your transfer.
What are the main benefits of using a specialist currency company?
1) Better exchange rates: You could save up to 3.5% on a transaction, as specialist firms typically offer better rates of exchange than the high street banks. This is because, as well as operating with much lower margins, they have access to the live currency markets, so you can benefit from their up-to-the-second access – which can help, for example if the rate picks up during the day. Banks tend to fix their rate of the day each morning, and at a less competitive level, to cover their bigger overheads and any market movements. 3.5% might not sound much, but when talking about a £150,000 transfer for a property it’s a saving of up to £5,000, which could be spent better elsewhere.
2) A currency specialist can also usually ensure you do not encounter any bank charges when your money is received in Spain. Using the wrong type of transfer through your bank could result in “receiving charges” in Spain of either a flat fee, or around 0.5% of the amount transferred.
Is using a currency specialist safe?
When buying a property abroad, the funds that are being used are nearly always your hard-earned money, pension or even your whole lifesavings. A Place in the Sun Currency understands how important the safety and protection of your funds is, so here are our key tips on what to check:
• Make sure you choose a specialist who are authorised by the Financial Conduct Authority (FCA)
• Go with a specialist that uses safeguarded & segregated bank accounts. In short, this ensures that your money is looked after correctly according to the Payment Services Regulations, separately to the business’ own funds – safeguarded funds are legally protected no matter what happens.
• Find out how long the company has been around – what experience do they have in helping overseas property buyers?
Check reviews online, and most importantly, call them for a chat and get an idea of the people you will be dealing with.
How does the process typically work?
This is how we do it at A Place in the Sun Currency:
- Register with your currency specialist which is quick, easy and could save you a small fortune.
- Place your order and send your funds (usually Pound Sterling) through to a UK client bank account. This can typically be done through your online and/or telephone banking service, or by visiting your bank in person to make a transfer. For security purposes, cash, cheques or direct debits are not accepted.
- Receive a receipt for your payment and provide details for the beneficiary account – for instance your own bank account abroad, third payment solicitor or a notary who is handling your purchase. Your transfer will then be made immediately (subject to bank cut-off times and internal checks) and payment will typically arrive with the beneficiary the same day or next day.
- Obtain an electronic proof of transfer to keep for your records, which can be forwarded onto your property agent, solicitor or notary. A Place in the Sun Currency guarantee there will be no overseas bank charges for Euro payments, so the exact amount you buy from us is the exact amount that will arrive.
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