Tue, 18 Sep 07
Brits looking to invest overseas could stand to lose over 5,500 Euros (£3,735), reveal experts at the
At a time when the Great British Pound (GBP) is strong against some of the world’s leading currencies, second homebuyers and property investors should be looking to cash in on exchange rates when transfering money for the property purchase. Instead, many are losing money on this important transaction simply by using a high street bank rather than a foreign exchange specialist which offers a more competitive rate.
Mark O’Sullivan, head of trading at Currencies Direct, an exhibitor at the Property Investor Show comments: Aside from a UK home, buying a property abroad is likely to be the most expensive purchase that you will make and it is crucial to get the best deal on the exchange rate to ensure you don’t lose out when transferring money overseas. Using a specialist rather than a bank could ultimately save thousands of pounds which can be spent on other initial costs. The 3,000 Euro figure doesn’t even take into account the transfer fees that many banks charge, which would inflate the amount further.
Foreign exchange specialists also enable considerable savings on subsequent regular foreign currency transfers such as a UK pension being spent overseas or property mantainence fees. Investors can also take advantage of a good exchange rate for the long term, securing it for up to two years by using a ‘forward contract’ offered by the specialists.
Look where the pound is strong
As well as being aware of competitive foreign exchange rates, investors should be looking to capitalise on opportunities in countries where the GBP is at its strongest against the other currencies.
With the US dollar recently weakening significantly compared to the pound, countries with currencies pegged to the dollar are currently a good bet. The Dubai AED is one such currency as its relationship to the pound mirrors that of the dollar. Over the last year, the pound has gained almost 12% against the AED.
Mark O’Sullivan adds: For UK buyers making stage payments in Dubai, the final cost of the property will be less than expected a year ago. GBP / AED is a volatile pairing and currency fluctuations can have a significant effect on what property you can afford. As such, the timing of your currency transaction is crucial. A foreign exchange specialist will be able to advise you how to take advantage of swings and lock in a favourable rate. If you do your research, it is possible to captialise on foreign exchange, keeping more money in your pocket.
For investors interested in buying in the United Arab Emirates and Dubai in the current financial climate, a special dedicated section, Invest in Arabia, will feature for the first time at the Property Investor Show. Exhibitors on hand to offer expert advice will include Aldar, the leading real estate developer in the UAE capital, Abu Dhabi.
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