Sharp falls in the pound since Britain voted to leave the European Union may prompt some people with homes in Europe to consider selling their property and transferring their money back home.
The pound has lost nearly a fifth of its value since Britain voted to leave the European Union, although recent weeks have seen a slight rebound, thanks to inflation remaining steady and positive wage growth numbers. In May 2016, prior to the Brexit vote in June, £1 equated to more €1.27. In recent weeks, it has fallen to below €1.15.
Although sterling’s weakness against the euro means steeper costs for anyone holidaying in Europe, those selling property there stands to benefit, as when they convert the proceeds of their sales back into sterling, they’ll get more pounds for their euros.If you are thinking about selling up, or have recently sold a property in Europe and need to transfer a lump sum back to the UK, it’s important to try to keep transfer costs to a minimum. Here are our top tips for sending money back home.
Find the best exchange rates
Exchange rates can vary considerably depending on who you use to make your currency transfer, so never just go for the first provider you find without checking how their rates compare to the competition.
Using a provider with competitive exchange rates could potentially save you thousands of pounds if you’re transferring a significant sum back to the UK. For example, the Telegraph’s International Money Transfers service, provided by foreign exchange specialists moneycorp provides access to great exchange rates which could translate into real savings.
Beware exchange rate fluctuations
Remember that property sales can take several months, and during this period there is the risk that exchange rates could move against you. One way to protect yourself against currency market fluctuations is to consider a forward contract.
This means you can secure a favourable exchange rate for up to two years. Bear in mind however, that if you lock into a rate and it weakens further, you won’t be able to benefit. Forward contracts may require a deposit. It’s always a good idea to speak to an expert to help you decide the right time to transfer your money. Specialist providers have dedicated experts available who will be able to guide you based on your individual requirements.
Make sure your funds are safe
Larger currency brokers must by law be authorised by the city regulator the Financial Conduct Authority (FCA). Companies authorised by the FCA must keep your money separate from company funds, so that in the event the company runs into financial difficulties, you’re more likely to get your money back. You can easily check whether a company is FCA-regulated.
Smaller companies do not have to be authorised by the FCA and so most of these will only be registered. This means they might choose to keep customer funds separate from company funds, but they don’t have to. It’s therefore vital to always check what safeguards are in place before making a large money transfer back to the UK so you have peace of mind that your funds will be protected.
Check transfer fees
Use a high-street bank to transfer funds back to the UK and you’ll often be looking at steep charges which can eat into your cash. You may also need to pay a fee from the bank that receives the funds.
Specialist currency brokers usually have much lower fees, so always compare costs before making your transfer to make sure you’re getting the best possible deal.