How to fix the best foreign exchange deal
The Daily Telegraph, 10 March 2007
Jenny Knight
Buying a home abroad can be nerve-wracking. So for years British banks did rather well out of people too busy trying to understand foreign taxes and badly translated legal documents, to give a thought to foreign exchange deals. Now foreign exchange companies are stepping up their drive to deal with more of the millions of pounds spent each year by UK property buyers. And banks are fighting back. Citibank and HBOS recently cancelled fees and foreign exchange commissions on money transfers from the UK to their foreign branches.
But most High Street banks still charge for transfers usually about £25 - and levy commissions at the same rates they give tourists for changing holiday spending money, instead of the lower commercial rates for corporate clients. Worst of all, the banks tend to have poor foreign to the bank is the best option when paying for a dream property, but banks operate in a rather murky world of unexpected charges. Often people moving to Spain are transferring their life-savings so we like to hold their hands, alerting them to the receiving and exit fees levied by some foreign banks. If we can't negate those charges we like to soften them by getting the best exchange rate."
His rival Mark Bodega, from HiFX, said: "Mystery shopping exercises find that banks charge an average of four per cent more than currency exchange dealers. There are four different ways that banks overcharge, and because most of our clients are not wealthy people - the average priced property is £ 120,000 - it is vital to get a good deal.
"Someone using a bank to change £100,000 into euros useful for people buying off plan and making staged payments. While the fixed rate may not turn out to be the best rate, it does allow
buyers on a budget to be certain how much they will be paying.
Bodega added: "People should think about currency exchange as soon as possible. We send out daily or weekly information about currency rates, so people can get to grips with fluctuations early on. Last year the Euro fluctuated by four or five per cent against the pound. On January 23 this year we sent out an alert to clients saying the pound was at the highest rate against the dollar for 14 years. For people buying in the US that was a good time to fix a currency deal."