I am looking to purchase a property with a mix of £100k cash and £75k mortgage. I am from the UK and so is the vendor. I wondered if there was a way in which I could agree to pay the cash element in sterling, agree a rate with the vendor for the cash element now,then convert this to euros, leaving a balance to pay in euros on the actual rate at completion. This would mean we both at least knew that the £100k was at a pre agreed rate and only the balance would be at the risk of currency rate changes in the future
I am not sure if this is feasible but we would not be exchanging contracts for 4 months so I am reluctant to gamble on the currency variances on the entire £175k sum if I can avoid it legally
Hmm…. how does the vendor feel about this? Friends of mine bought in France at GBP1 = FF12 and sold at FF8 = 1GBP. The last thing they would have agreed to was the opportunity to give away a stonking great gain on FX at a time when GBP was dodging about at the bottom of the curve.
Both parties are going to have to ‘take a view’ (I love this phrase. It covers everything from a carefully considered analysis, with stats and evidence, to a wild, panic-stricken punt) on the way GBP <> € might go over the next 4 months. And week may be along time in politics but 4 months is an eternity in fx.
If I was in the vendor’s shoes I think I’d ….. No. It’s no good. I can’t even think what I’d do in his place, me with nothing to lose but looking a fool. Except – if you are the only game in town …
Everything you need to know about property in Spain
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.