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Posted November 3rd, 2016 by Charles Purdy

One big buying mistake

Property buyers need to know how much they can really afford abroad. The good news is that you can budget for more if you use a currency specialist

I was at an international property exhibition at the weekend, listening in to a seminar where an estate agent was talking about buying costs in Spain. Budget for around 10 percent she said, for legal fees, stamp duty, surveyor, notary and so on. A little later she was talking about property prices and the pound falling to €1.12. One of the audience asked a question, mentioning that with his £100,000 budget he was looking at property of €112,000.

Woah, hang on, I wanted to say, you won’t get that rate when you buy your property. The exchange rate that you see quoted on the news, €1.12 last weekend although it may be up or down by the time you read this, is what is known as the Live Interbank Rate. This is the rate that banks will use between each other. They then make their profit from offering you and me, and everybody else buying property or transferring money overseas, a lower rate. When you consider that Barclays made £1.7 billion profit just in the past three months, you can see how much ordinary companies and people are paying to use their financial services.

Saving thousands on your property exchange

That is why you should never change money at the airport, where despite the pound being worth €1.12 on the live rate, you might get less than one euro to each pound.

The banks do a similar thing with international property buyers, however, adding their own fees as well as a much lower rate of exchange. So if you buy your property overseas using your high street bank, as well as the 10% buying costs, you might be paying significantly more in extra currency costs.

Suddenly your £100,000 budget is getting you a lot less than €110,000, even before all those other buying costs that the agent was talking about.

There are two pieces of good news. Firstly, in most parts of the world – even the most beautiful parts of Europe and the US – that buys you a very nice holiday home, or an investment property offering a better return than is available in the UK. Secondly, you don’t actually have to pay such high currency costs. At Smart Currency Exchange we are experts in one thing – changing currencies. To be so successful over the past ten years we have had to offer competitive rates, saving you thousands of pounds compared. We are regulated by UK financial authorities just like the bank, so you can exchange with complete peace of mind.

After the exhibition I wished I had spoken to the gentleman who asked that question about his budget. Currency is our thing and at Smart we love to talk about currencies. If you would like to discuss the various ways you can save money on your exchange rates, please call us on 020 7898 0541 or request a quote and find out what your real property budget may be.

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