Shop around for your foreign currency when buying property abroad

August 11, 2011 – 5:29 pm

Take care when exchanging currency to purchase property in Tenerife and overseas

Independent analysis on the European property market found that average foreign property buyer spending £125,000 on their overseas home would receive €131,547 from a high street bank. However using a specialist foreign currency provider could result in an improved rate of €139,033 – a massive €7,486 difference equivalent to around £6,600, according to GSA.

The highest return on a £125,000 transfer was €139,650 offered by Currencies.co.uk, while the lowest was €131,062.50 offered by HSBC.

Just 10% of foreign currency transactions are made using a foreign currency provider, who can offer around 5.6% more than the High Street as they use commercial exchange rates to determine the value.

Savills International Research on second homes found that around 130,000 overseas properties were purchased by Britons between 2005 and 2009, potentially wasting millions as a result of poor exchange rates.

By Angela | Posted in Economy, General, Holiday, Inspirational, Miscellaneous Articles, Property, Tenerife, Things to Do | Tagged , , , , , , , , , , , , , , | Comments (0)

Interest in foreign property purchase booming again says Moneycorp

April 1, 2011 – 9:56 am

Interest in purchasing Tenerife and Spanish property on the rise

Interest in foreign property purchases is once agan booming amongst British buyers, with  Rightmove and foreign exchange specialists MoneyCorp both reporting a large surge in enquiries. Real estate enquiries rose by 53 percent in February  Rightmove reports, with Spain retaining its popularity as a second home destination despite its much publicised housing collapse.

Certainly this increase in purchasing  is being seen in Tenerife and the bargains which exist at all levels, even in the prime property sector are now being snapped up by savvy purchasers

By Angela | Posted in Economy, General, Health, Holiday, Inspirational, Miscellaneous Articles, Property, Tenerife, Things to Do, Weather | Tagged , , , , , , , , , , , | Comments (0)

Sterling slide against the euro and dollar is halted

February 17, 2011 – 12:18 pm

The sterling exchange rate against the euro affects those making property purchases inTenerife at present.

Sterling struggled for most of the week ahead of the Bank of England’s interest rate decision on Thursday. Recent speculation regarding potential interest rate hikes by the UK central bank saw traders buying into the pound but with low growth levels and inflation expectations indicating an increase in price pressures over the coming months the likelihood of a rate hike has diminished and concerns that premature monetary tightening could risk destabilising the UK recovery.

Economic data from the United Kingdom gave little support to the Pound which was batted around by risk aversion and movements in EUR/USD exchanges. The British Retail Consortium released its retail sales index which indicated sales had bounced back in January after a decline due to poor weather in December.

However, it is thought a rush to beat the VAT increase had contributed to the late push in higher retail spending. RICS house price data showed the pace of price declines eased for a third consecutive month. The data underlined the difficulty faced by the Bank of England in its decision over whether to raise interest rates, similarly a mixed performance in industrial and manufacturing output added to the argument that caution was required to support growth as well as tackling inflation.

The Bank of England rate decision saw the Pound react positively to the announcement and halted the currency’s slide versus the dollar and the euro. The UK central bank kept interest rate on hold at 0.50% and made no changes to its £200bln asset purchase program, as expected.

Expectations are still that the BoE may be forced to raise rates to combat inflation. A view supported by the release of higher than expected PPI inflation figures although late week geo-political tensions rising in Egypt prevented any gains as risk aversion dominated trade.

Clearly the sliding pound against the euro makes a difference for those who are trying  to buy property in Tenerife at present but also for  those who are selling and wish to change the euros back into pounds. The use of a good money exchange company such as Moneycorp will ensure that you get the best exchange rate for whichever currency that you have. The rates from these companies tend to be better than the high street banks. It really does pay to shop around.

By Angela | Posted in Economy, General, Health, Holiday, Inspirational, Miscellaneous Articles, Property, Tenerife, Things to Do, Weather | Tagged , , , , , , , , , , , , , | Comments (0)

Interest in buying property in Spain and Canary Isles is increasing

June 19, 2010 – 12:03 pm

Interest in buying property in Spain and the Canary Isles is increasing with more people searching for Spanish real estate in May, according to the latest index from Rightmove. Overall 58% of locations saw an increase in property searches, 42% saw a decrease and 0.2% experienced no change.

Half of the top time climbers in May were in Spain and its Islands There was also interest in South Africa but this is put down to curiosity generated by the World Cup football tournament rather than an increase in serious buyers. June is expected to see even more interest as football fever continues.

Interest in property in Tenerife and Spain increasing once more

Interest in property in Tenerife and Spain increasing once more

‘May was a great result for Spain, fed by returning confidence among buyers as the bad memories and headlines of last year fade. It’s always hard to let go of what your property was worth at the peak of  the market and accept times have changed, but vendors also seem more open and have much improved realism about prices necessary to make transactions happen,’ said Robin Wilson, Head of Overseas at Rightmove.

‘The improving Euro exchange rate is definitely playing a part, up 10% on January this year and 20% on January last year, meaning buyer’s budgets can go further,’ he added.

Moneycorp, one of the UK’s leading foreign exchange specialists, has also seen a rise in enquiries for Spanish properties, which amounted to an increase of 11.8% between March and May.

‘Throughout May, sterling gained good ground against a weak Euro. Having started the month at €1.14, the rate eventually reached €1.18 towards the end of the month. The pound has benefitted from economic data which continues to support the view that the UK recovery is gaining traction,’ said David Kerns, Head of Private Clients at Moneycorp.

‘In contrast, the Euro has continued to weaken, following news that Spain’s AAA credit rating had been downgraded. It was sent even lower when the European Central Bank warned that Euro zone banks faced writing off another €195 billion of bad loans. The increase in the Sterling/Euro exchange rate would have made properties within the Euro zone an increasingly more attractive prospect for Euro buyers, and explains the surge in interest.

By Angela | Posted in Economy, General, Health, Holiday, Inspirational, Miscellaneous Articles, Property, Tenerife, Things to Do, Uncategorized, Weather | Tagged , , , , , , , , , , , , , | Comments (0)

Britons missing out on £101million each year on international money transfers

May 28, 2010 – 8:22 pm

Poor bank rates and high charges for foreign exchange transactions mean individuals need to be savvier when transferring money overseas. Research by Moneycorp reveals that Brits are potentially losing over £101m a year by not shopping around for the best deals when transferring money abroad. Furthermore, uncompetitive exchange rates and high bank charges are costing individuals a lot of money, despite a concerted effort by most to reduce their outgoings on luxury and even staple items.

Britons missing out on cash when they transfer money to and from Tenerife

Britons missing out on cash when they transfer money to and from Tenerife

David Kerns, Head of Personal Clients at Moneycorp, comments: “While many individuals are visiting comparison websites more frequently, checking voucher code sites and consulting online consumer forums before purchasing goods in order to save money, this mindset doesn’t seem to have extended to foreign exchange. As a result, individuals are missing out on a very large sum of money they could be saving, by transferring funds
overseas through a foreign exchange specialist rather than a bank. Not surprisingly, high street banks are cashing in as a result of this surprisingly apathetic approach.”

People buying or selling property overseas and people emigrating or repatriating will be particularly affected, though this issue will affect all Brits who are transferring money overseas. People who own additional properties abroad and make regular mortgage and/or utilities payments will also be badly affected, as every transfer is open to individual transfer charges, in addition to exchange rates.

Data from the UK’s number one property website, Rightmove Overseas, reveals that the average house price in the Costa del Sol in Spain is currently €369,860.68. With a deposit of 10% , using a high street bank rather than Moneycorp would cost an individual, on average, an extra  £558 on their deposit alone.

An individual who wants to transfer a lump sum of £100,000 to an account in Europe would lose out on an average of 1,690 by using their bank for the transfer into euros.

David Kerns concludes: “Despite the UK coming out of recession recently, individuals shouldn’t be lining the pockets of their bank managers and it’s in their best interest to maximise their investments. Prior to making any overseas payments, we always advocate that people shop around to get the best rates possible.

By Angela | Posted in Economy, General, Holiday, Inspirational, Miscellaneous Articles, Property, Tenerife, Things to Do, Uncategorized | Tagged , , , , , , , , , , , , , , , | Comments (0)

Trim the costs of owning a property overseas

May 14, 2010 – 4:25 pm

Over a million Brits currently own a home overseas, with France and Spain being the most popular destinations. However the global economic slowdown has hit homeowners not only at home, but also abroad as the cost of maintaining a property has increased -over a fifth of owners (21%) are struggling to meet the increased costs, according to latest research from a currency firm.

Trim the cost of maintaining your property in Tenerife by following a few simple steps

Trim the cost of maintaining your property in Tenerife by following a few simple steps

85% of overseas property owners say the cost of maintaining their property has gone up in the last 12 months, so you should attempt to reduce the cost of being an overseas property owner.

Whilst mortgage rates may have gone down for many owners, the overall cost of owning a property overseas (including local taxes, utility bills, maintenance costs etc) has continued to grow and the rising costs of ownership have been magnified by sterling’s depreciation and the continued market nervousness over the hung parliament following the General Election  Many homeowners are also seeing their rental income from a holiday home hit, as the number of potential tenants decreases with more people opting for ‘stay-cations’ in their home country.

Two years ago the average overseas home owner transferred £10,000 a year to meet maintenance costs (including overseas mortgage payments) and provide spending money when they visit their second home. However as the pound has taken a beating against all the world’s major currencies, they now have to convert significantly more in order to meet the costs associated with their international property such as maintenance costs, mortgage payments, utility bills and local taxes.

For example, in October 2008, £10,000 would have bought you €12,900.  To receive the same amount of Euros today, a Brit has to transfer £11,896, almost £2,000 more.  People making regular currency transfers should set up a Regular Payment Abroad plan with a currency broker  such as Moneycorp that allows you to lock into an exchange rate for up to 12 months ahead so you know know exactly how much is being transferred every month.”

According to the research, almost 70% of holiday home owners are missing out on vital income by not renting out their overseas property. Almost half of those that do rent it out only do so to friends and family who traditionally pay less than other tenants.

Overseas home owners have to pay ongoing taxes on ownership, such as local taxes or even tax on rental income.  This is usually payable in the country where the property is located, but if you are a UK resident, such income also needs to be recalculated into Sterling and is taxable in the UK, regardless of where it is paid, with any appropriate relief given in the UK for taxes paid abroad. Each country will tax the income according to its own rules, so sometimes more allowances are available abroad than in the UK or the tax rates abroad may be lower, but the higher tax liability will be due.  However, there may be ways of reducing your tax bill, but whatever you do, you only pay tax when you make money. Spending money unnecessarily to save tax can often be a false economy It is important to make sure that you claim whatever allowances you are entitled to.

People who take advice before buying their property abroad often manage to make their purchase more cost-effective than those who buy without taking advice so you should at the very least check the advice of a reliable estate agent.

By Angela | Posted in Economy, General, Holiday, Inspirational, Miscellaneous Articles, Property, Tenerife, Things to Do, Uncategorized | Tagged , , , , , , , , , , , , , , , | Comments (0)

Pensioners suffering from the global recession

September 29, 2009 – 4:27 pm
Pensioners in Tenerife and overseas are not smiling as much since the recession.

Pensioners in Tenerife and overseas are not smiling as much since the recession.

Almost half of Britons abroad who are sending money back to the UK are aged 65 and over – suggesting that those pensioners who retired to the sun have been hit hardest by the recession and are being forced back to the UK.

Currency specialists such as Moneycorp and  HiFX has seen a 180% increase in the number of euro to sterling transactions and a 111% increase in the number of US dollar to sterling transactions in the past six months, compared to the same period last year.

Not only are more over 65s repatriating money, but they are also sending home larger amounts. This suggests that they are selling up property and returning home. In the last six months almost a third (32%) of the transactions over £70,000 have been made by over 65s. They have  calculated that British pensioners living in Europe have potentially lost out on almost €10billion of their income in the last two years due to the falling strength of sterling. When faced with this drop in their income, it’s no surprise that some pensioners are finding themselves forced to sell up.

Certainly this has been seen in Tenerife and the Canary Islands allowing the fortunate few with cash to obtain great property bargains.

By Angela | Posted in Economy, General, Holiday, Inspirational, Miscellaneous Articles, Property, Tenerife, Things to Do, Uncategorized | Tagged , , , , , , , , , , , , , , , , , | Comments (1)

Buying Overseas? Ensure you obtain the best rate for your money.

March 7, 2009 – 12:32 pm
Make the most of your money when changing currencies

Make the most of your money when changing currencies

As the financial turmoil around the world continues, it is more important than ever to make sure you get the best exchange rate when buying overseas. There are two ways to achieve this: timing your purchase; and getting the best deal on the day.

Timing your purchase

If you are buying overseas, you will usually have a window of a couple of months before a completion payment is due – or a longer period to consider if you are buying off-plan and sending stage payments over the course of a build.

Whatever currency you need, the exchange rate will fluctuate over this period of time – so how do you know what the sterling cost is going to be? When is the best time to buy your currency?

An experienced currency dealer like Moneycorp will be able to tell you what’s happening in the market in simple English. If you need to send money to Tenerife, for example, which way is the Euro heading and why?

For these money transfers in Euros, when is the next announcement regarding European interest rates and how might it affect the exchange rate?

While there is no crystal ball and nobody can see into the future, it can pay to have an idea of what is moving the markets. This is how your currency broker can help you to make an educated decision as to when the time is right for you.

Furthermore, if exchange rates are good (or you’re worried about them getting any worse), you can also lock into a “Forward Contract” to guarantee your rate for up to two years in advance.

The beauty of buying currency in this way is that you have a definite sterling equivalent for a future currency requirement, but you only need about 10 per cent of your Pounds available to secure the rate. The balance is due when the money needs to be sent.

Currency companies watch rates all the time, so if you have a target budget in mind, they can let you know if the market moves in your favour. All in all, you are likely to end up more in control of your finances and with a better deal than just by buying your currency at the last minute when it is required.

Getting the best deal

When you decide to make a currency purchase, it’s not usually your high street bank that will get you the best rate. An independent broker such as Moneycorp will save you up to four per cent compared to a bank’s exchange rate – or £6,000 on a £150,000 purchase!

Currency brokers are registered with HMRC as money service businesses, and as they don’t use credit or speculate on the markets, the system is incredibly safe.

Because currency companies deal only in foreign exchange, you should also expect a first class personal service and your own dedicated dealer to guide you through the process. It is also less confusing to speak to an experienced broker, rather than the call centre environments presented these days by the banks.

Good currency brokers won’t charge you any commission and should have minimal or zero transfer charges – so you can save money right across the board. You can find more information on this and property related matters on the Tenerife Property Guide site.

By Angela | Posted in Economy, General, Miscellaneous Articles, Property, Tenerife | Tagged , , , , , , , , , , , , , | Comments (0)