Buying Property In Spain Currency Markets

When buying an overseas property you will know the price in Euros but you will not know the actual cost in Sterling until you have bought all of the currency to pay for it. This is due to daily volatility in the currency markets.
For example, a villa priced at 200,000 Euros would have cost Ł135,000 in mid March 2003 (exchange rate 1.481) but increased in cost to Ł145,000 (exchange rate 1.379) by mid May. Due to adverse currency fluctuations the cost of this property has risen by Ł10,000 in just 3 months.

Currency specialists HIFX can offer you:

«    Protection from currency risk (seen above), even if you don't have all the money available yet
«    Excellent exchange rates
«    Free priority transfer of funds to Spain*
«    Earn interest on all funds held
«    Patient, helpful consultants who will listen to your specific requirements
(*some Spanish banks may charge to receive Euros)

How does it work?
A deposit payment on the property is usually required and this will simply involve buying an amount of currency straight away. HIFX can offer you a 'wholesale' exchange rate in contrast to the 'retail' rate that might be offered by a high street bank. Buying currency and paying for it straight away is called a 'spot trade'. HIFX can then send the Euros direct to your lawyer, developer or to your own account in Spain by free priority transfer.

You will then be required to pay for the balance of the property. This will either be one final payment or several stage payments depending on the property you are buying. If your new property is being constructed the time frame could stretch into several months or even years and the associated currency risk as mentioned above could become very alarming.

If you have all of the money available immediately you can simply buy all of the Euros you need and hold them in your own Euro account or HIFX's client Euro account (earning interest) until further payments are required in Spain. This eliminates the currency risk as you have already bought and paid for your Euros.

If you don't have all of the money available you can still fix an exchange rate for a future date by buying a 'forward currency contract' with your HIFX dealer. In layman's terms you are buying the rest of your Euros now but paying for them later. Please discuss this with a HIFX consultant to weigh up the most appropriate solution for you.

If you have strong views about future exchange rates or simply want to compare exchange rates, HIFX can keep an eye on the market for you and provide you with comparative quotations.

Always remember, you are buying a property and not speculating on the currency markets. Nobody can predict future exchange rates so our advice is to lock-in and layback! If you are happy with the cost at the time of purchase, don't let the currency markets upset your budget.

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