We can offer you a range of contract types to help you protect yourself against increased costs caused by foreign exchange movements.
You can choose from:
Occasions may arise where you need your currency straight away. This could be because you need to pay the deposit on an overseas property.
In most cases we can convert your money immediately and arrange the onward transfer of your chosen currency on the settlement date - normally just two business days after you place your order.
The technical name for this type of instruction is a 'Spot' and is simply the quickest way of exchanging one currency for another. A one per cent deposit will be required when you place your order. For example:
You have decided to buy a property in Spain and need to pay a deposit to the developer’s solicitor as soon as possible in order to secure the property.
You will then give your personal Account Manager, either Chris or Ben, a call to let them know that you now need to make a transfer using the Account you have set up. Your Account Manager will take you through your options. You decide to make a “Spot” transaction and are quoted a rate, for example, €1.4450 to the Pound. You are happy with this rate and decide to proceed, paying either the full amount by debit card over the phone, or a small deposit by debit card with the remainder to follow by CHAPS. The exchange rate is confirmed over the telephone and fixed there and then. We will then send you a contract note later that day giving you full details of your transaction for your records.
You need to allow two full business days between the date that you arrange your currency transaction (by either paying the full transfer sum or the deposit to the Assetz currency service) and the date that you need the funds to be transferred.
Therefore if your estate agent has advised you that you should make your transfer by Friday you would need to speak to your personal Account Manager on Wednesday at the latest (for most currencies).
You might be asked by your estate agent to provide proof that the transfer of your deposit has been made, we send this postally to you on the day of the transfer, but can fax or email it to you if necessary.
Please note: Any exchange rate used in this example is for illustration purposes only.
When buying a property abroad, the completion date (and therefore the date on which the final sum is required) is normally some way off. Therefore you need to consider the impact that an adverse exchange rate movement could have on your costs. For example, a property costing £132,723 on 23rd June 2005 cost over £6,000 more just one month later as the Euro had risen in value against the Pound giving a purchase price of £138,773. Of course, the exchange rate could move in your favour, but it is a risk you may not want to take.
The technical term for fixing the exchange rate for a date in the future is a 'Forward' and simply means you can fix the exchange rate today on a transfer you intend to make at a later date. This type of transaction can be particularly important for buying an overseas property when the final payment is not due for several months but you need the certainty of how much the foreign currency is going to cost you in sterling.
There are two types of ‘Forward’ depending on whether or not you know the date on which you will need the funds to be transferred:
For example:
You have decided to buy a property in Portugal and have paid an initial deposit to reserve the property in your name. You know that the final sum that you must pay to complete your purchase is €200,000 and you will need to pay this in exactly 3 months time.
You have already opened your Assetz Currency Service Account in order to pay your initial deposit using a “Spot” Transfer (explained above). You now call your personal Account Manager, either Chris or Ben, to discuss the use of a Forward in order to fix the exchange rate for the future payment and therefore fix the cost in Sterling. Your Account Manager gives you the amount in Sterling that this payment would be if you were to fix today’s rate and this amount fits your available budget perfectly. With this in mind you enter into a Forward contract, and make a 10% deposit to secure this rate of exchange. You are now safe in the knowledge that whatever happens to the exchange rate, the amount you owe is fixed. All that remains is for you to forward the balance to the Assetz Currency Service two business days before the agreed settlement date.
Please not that we always recommend you allow a few extra days than strictly necessary to allow for any delays at the receiving end.
When buying a property overseas you are often faced with the problem of the timing of your final payment or various stage payments. It could be the case that you are waiting for a property to be built and you have only been given an approximate date of when it will be completed.
We realise that this can be an inconvenience as you will not always know the exact date on which you will need your foreign currency. This is why we have adapted our standard “Forward” contract to give you the extra flexibility you need. You still have the advantage of fixing the exchange rate, but you also have the added advantage of choosing a period of time during which your currency can be converted at the fixed rate - for example you can draw down your currency at any point during a 3 month period. The technical name for this is a 'Time Option', which simply means you have an option to receive your currrency on a date of your choosing within a pre-determined window. You will be required to make a deposit of typically 10% of the value of your transaction when you place your order.
You have decided to buy an off-plan property in Cape Verde and have paid an initial deposit to reserve the property in your name. You know that further sums will be required of you as and when the property reaches certain stages in its construction. It is unclear exactly when these payments will be required but a rough guideline has been given to you that indicates 100,000€ will be required in about 3 months time.
You have already opened your Assetz Currency Service Account in order to pay your initial deposit using a “Spot” Transfer (explained above). You now call your personal Account Manager, either Chris or Ben, to discuss the use of a Forward in order to fix the exchange rate for the future payments. Your personal Account Manager suggests that a Time Option might be worth considering, in order to cover the eventuality of building work finishing earlier or later than expected. You therefore arrange a Time Option with a settlement period of between 2 and 4 months time. You are quoted an exchange rate for the transaction and agree to go ahead, paying a deposit to fix the exchange rate.
In 2 months time you receive notification from the developer that building work has reached the required construction level. One month ahead of the original forecase. You can now pay the balance for the Time Option and we will ensure that the 100,000€ is transferred to the developer for you.
The different methods of buying currency can seem complex. That is why our experienced dealers are specifically trained to explain the different options and discuss your currency needs with you so that we can help you tailor your order to exactly meet your needs. If you have any questions on any type of transaction please do not hesitate to call us on 0117 980 9990.
Assetz Currency Service and other areas of the Assetz Plc group usually send new enquirers a few complimentary issues of our publications or emails about new products and services so that they can get a feel for whether and how they wish to deal with us. If you would prefer not to receive these, please do let us know. Your personal data will remain confidential, and will not be passed to any other company, unless the information is required by law. Assetz Currency Service is a trading name of Hargreaves Lansdown Stockbrokers Ltd (HL). Any contract you enter into will be a contract between you and HL.
