Prime Purchase is pleased to include guest blogs from our breadth of contacts. Covering many different aspects of the property market, we hope that you will be interested in hearing from our guest contributors.
Hedging your bets against foreign exchange fluctuations
11 JUNE 2014
With 70% of our London clients from overseas, be they foreign nationals or expats working outside the UK, Prime Purchase is particularly mindful of the potential complexities involved with purchasing UK property with overseas funds.
One such area is fluctuations in the foreign exchange market. Whilst the UK has in recent years been seen as a safety deposit bank for many international investors - stable interest rates and an economy that is performing well relative to the rest of the world being two key factors – the foreign exchange market has been very volatile in its response to the global crisis.
Prime Purchase aims to buy the best in class at the best possible price but our inability to control changes in the foreign exchange market means that overseas clients can face a considerable price difference between the time that a price is agreed to completion on the property.
With this in mind, you may be interested in learning about the Global Currency Exchange Network (GCEN) who Prime Purchase recently met. Amongst other brokers who cover this area, GCEN assists clients needing to transfer large sums abroad. One of its products that is not available through a High Street bank is the Fixed Forward Transaction. GCEN recommend it in order to “manage the exchange rate volatility, give clients the ability to plan ahead and protect themselves against possible negative fluctuations.”
Working in the foreign exchange market on a daily basis, the GCEN team is only too aware of the potentially huge variations in the foreign exchange market. As an example, in June 2013 sterling gained around 5% against the Hong Kong Dollar. The impact meant that over a matter of weeks a property costing £1 million at the beginning of the month would have cost an additional £50,000 by the end of the month.
With no cost to the client of having a Fixed Forward Transaction, GCEN considers that is the best way to avoid major repercussions of a constantly changing exchange rate.
If you would like more information, Nicholas Hanney of GCEN can be contacted on:
100 New Bond Street, London W1S 1SP
+44 (0) 203 763 9870
+44 (0) 203 763 9871 (direct line)