How overseas property purchases put money transfers in the spotlight
If 2020 was the year to hunker down, 2021 will go down in history as the year we widened our horizons – emerging from lockdown with new attitudes to work, life and property.
The latest data from global property expert Knight Frank suggests pent up demand in the second home market in particular is building significantly.
Almost a quarter of their respondents – 从 49 不同的国家 – reporting that their plans for purchases have been on ice since Covid struck. But a third say the pandemic has made them more likely to buy a second home as the world wakes up to the benefits of more outdoor and indoor space and the draw of open landscapes.
No wonder anecdotal evidence from agents across Europe points to a huge surge in demand from overseas buyers this summer, with price increases matching the unrelenting appetite.
A situation like that requires some very carefully planned international money transfers.
Londoner Nick Heaton knows the process well. After selling the family home, he set about renovating an apartment in Val D’Isere, in the French Alps. Before long he had also bought a piece of land on which to build a chalet.
“These projects involve lots of subcontractors, deposits and costs that lead to an incredible number of transactions,“ 他说, still deep in the build.
“Transferring money internationally is always a hassle. Yesterday I made a series of payments totalling £50,000 and there’s so much going on you just really need them to go well.”
But thanks largely to a Covid overlay on a Brexit backdrop, UK buyers, 例如, are contending with a level of sterling volatility that could easily scupper their big plans without careful, specialist management.
In the period since UK voters decided to leave the EU in June 2016, GBP/EUR has hit lows of 1.06 and highs of 1.31. 然后, as the true extent of Covid responses became clear in February and March last year, sterling lost around 12 per cent of its value against the euro in the space of a single month.
实际上, analysis by Clear Currency shows that in the last ten years, the average shift in the value of the pound against the euro has been between 8 和 10 per cent over any given 12 month period.
That kind of movement in value changes everything if it comes at a crucial point in a property purchase unless steps have been taken by the buyer and their currency specialist to manage that risk.
“I planned my purchase with an exchange rate of 1.12 in mind,” says Heaton. “I have a degree in economics but I’m not an expert in currency trading. I was introduced to Clear by a friend.
They proactively called to give me a heads up when the rate hit 1.18, a call that made a significant difference to my budget.”
But oddly, that’s not the big win for Heaton.
“Originally I was only really looking for a better exchange rate but really, it’s the service that makes all the difference.
“Doing any of these transfers with a bank would have been a logistical nightmare, full of limits, problems and endlessly sending off details. Being able to send all my transactions over to Clear saves so much time and hassle. Every tick on the to-do list makes a difference.
“Throughout the pandemic it has been seamless,” he adds. “And when my email was hacked, with fraudsters attempting to extort hundreds of thousands of pounds, they spotted it because it ‘just didn’t sound like me’.”
If that had been a bank it could have easily gone through.”
“The Clear service is fast, efficient, easy, and I trust them,” Heaton says. “Even with my background I would always use the professionals.
“Don’t bother doing it yourself or even through a jack of all trades like a bank. You’ll regret it. There are reasons they’re the experts and the rest of us aren’t.”