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Buying Overseas Property Case Studies

When purchasing a holiday home abroad, the foreign exchange rate can significantly alter the price of the property. World First can help in two ways:

Immediate (Spot) Transaction

Mr. Johnstone bought a house in Spain that cost €240,000 on the 14th November 2006. He needed to make an immediate transaction (know as a "spot" transaction) to purchase the property. He initially sourced an exchange rate from his bank and then compared it to an exchange rate he obtained from World First:

	Retail Bank	World First
Exchange Rate	1.4702	1.4856
Transfer Fee	£30	£0
Total Cost	£163,213	£161,551
Total Saving	£1,662

Forward Contract Transaction

Mr. Jones agreed to buy a house in June that cost €350,000 with payment due on the 5th August. Between the 24th June and the 5th August 2005, the sterling to euro exchange rate moved from 1.5114 down to 1.4345.



When Mr Jones agreed to buy the property, the cost using the exchange rate in June was: £231,573. If Mr Jones had waited until August and used the exchange rate then, the cost would have risen to: £243,987, an increase of over: £12,414.

In fact, Mr Jones, entered into a "Forward Contract" with World First, which enabled him to fix the exchange for his August transaction in June.

	Euros	Pounds
Cost of Property (June exchange rate)	€350,000	£231,573
Cost of Property (August exchange rate)	€350,000	£243,987
Cost of Property (August rate "forward contract" fixed in June)	€350,000	£232,600

With the forward contracts we offer, you can have peace of mind knowing that irrespective of exchange rate movements, you will always have a fixed sterling cost.