Currency Online Group Waterloo Location has relocated as of 30th September 2024 - Please place your order and follow the instructions for collection.
Currency Online Group Waterloo Location has relocated as of 30th September 2024 - Please place your order and follow the instructions for collection.
Currency Forward Contracts and Buying Property Overseas
What is a currency forward contract?
If you want to hedge your currency exposure, a currency
forward contract is one of the simplest and most accessible ways to do so.
In simple terms a currency forward contract is an agreement
between the client and international payment provider (Currency Online Group) to fix a
currency exchange rate for a future overseas payment.
It is most common to use a forward contract for a payment
due up to 12 months in advance but this can be done for a period of up to 2
years. To lock the rate in a deposit of between 5-10% will be required
depending how far in advance the contract needs to be.
Advantages of undertaking a currency forward contract
Setting a forward currency contract allows businesses/individuals
to be certain of costs around an international payment when budgeting future
expenses.
In turn this mitigates currency risk and protects the
company’s bottom line profit or in the case of an individual purchase, the cost
of the transaction. With outside factors affecting the currency market daily,
fixing a contract eradicates the risk of volatility and allows you to devise a
clear financial plan around your overseas payment(s).
With the future exchange rate locked in it means the price
of the contract cannot change for the given date. This means the rate can move
resulting in a favourable gain for the client.
Examples of why you would use a forward contract:
Forward contracts can prove particularly useful if you have
a transaction coming up that needs to be made overseas and is of sizeable value,
such as:
Using a forward contract for an overseas property
purchase
Just like
buying a property in the UK, obtaining a dwelling overseas does not happen
overnight. The process can take some time to complete, especially at this
present time as we continue to live through the Covid-19 pandemic.
When buying a property overseas, the purchaser(s) will be
working within a budget that they will need to stick to, just like buying back
home. However, one major difference between the two scenarios is the potential for
fluctuations in exchange rates that will need to be dealt with, over the period
of time it takes for the sale to go through, when acquiring property abroad.
Taking out these risks means the consumer has piece of mind that costs will not
unexpectedly increase due to not accounting for these prospective currency
movements. If this was to happen, suddenly the property could become
unaffordable, with sleepless nights ahead. Forward contracts can ensure
complete control of costs and budget when it comes to knowing how much the cost
of the transaction will be by setting the exchange rate for a particular date.
To secure a property overseas a pre-contract, non-refundable
deposit is usually required with the remaining balance due once all the
legalities are complete. In the case of a new build, completion will be due the
home is finally ready to move in. If there are hold ups in the time it takes
for the build to complete, this could mean further movements in the exchange
rate in that time, that could go against the purchaser.
Let’s say for example you are due to pay the balance on a
property purchase 6 months from now of €450,000. If you buy the currency forward
contract today (as of August 3rd 2021) at a rate of 1.166, you would
be required to pay a 5% deposit (€22,500), with the remainder being paid
before the end of the contract. In setting this exchange rate you know that the
remaining 95% of the deal will cost £366,638. If you decided not to use a
forward contract, come the day of completion you would make the international
payment using what is known as the spot rate (rate on the day). If in that time
the Euro had strengthened and the exchange rate had dropped to say 1.12 the
remaining balance due would cost £381,696. That is an increase of £15,058. You
can see from this illustration as to why it is important to protect yourself
from this kind of volatility and why forward contracts are a sensible approach
when it comes to buying property overseas.
Our partnership with Expert Villas
We have teamed up with a leader in the property sector in
Spain and beyond to provide our first-class international payment service to
all of their clients. Expert Villas
currently has over 80,000 properties listed on their website from all major
estate agents in Spain and the Islands. In addition to this Expert Villas has built up a
business directory providing complete assistance when it comes to buying,
selling and moving overseas.
With our expert knowledge of all things, currency, and Expert
Villas in all things property you are sure to benefit all round when it comes
to buying, selling or renting an overseas property in Spain.
How to arrange and agree a currency forward contract with
Currency Online Group
If you feel a currency forward contract is best suited to
your overseas property purchase, then the process could not be simpler. The
first thing is to open an account with Currency Online Group.
You can either follow the link www.currencyonlinegroup.com/international-payment
or if you would prefer some assistance, you can contact our professional
International Payments Team on 0208 050 1546
A dedicated account manager will guide you through the
process and discuss what the best option is in regards to your forward contract
and fixing the exchange rate, based on your circumstance. While forward
contracts prove highly popular when it comes to overseas property purchase,
there are other FX solutions available that the team would be happy to go
through at the same time.
Benefits of making your international payments with Currency
Online Group:
© Currency Online Group
3rd August 2021
On July 19th
2021, Croatia was placed on the UK’s green ‘watch list’, meaning those
passengers returning from their trip would avoid isolation.
Like with
all countries that are categorised according to the UK’s current travel traffic
light system, we must remember to check the entry requirements of the country
in question, as each individual one has its on set of rules for those travellers
from the United Kingdom.
Entry
requirements into Croatia for UK travellers
UK nationals
travelling to Croatia must present one of the following:
· a negative COVID-19 private antigen
test not older than 48 hours
· OR a negative PCR test result not older
than 72 hours
· OR proof of vaccination
· OR a doctor’s certificate of recovery
following a positive COVID-19 test result between 11 and 180 days prior
Children
under 12 are exempt from the entry requirements above if travelling with an
adult that meets one of the criteria.
If you fail
to present one of the documents, on arrival, and are not exempt, you will be
required to undertake a rapid antigen / PCR test and placed into isolation until
a negative result is confirmed. If you decide to take the rapid antigen test
and are planning to stay in Croatia for more than 10 days you will be required
to repeat the test again after the 10 days expires.
In addition
to producing test results / vaccination status passengers are also required to
complete an online entry form
In addition,
it is recommended that you carry the details of your accommodation booking / ownership
of holiday home/boat. If you are arriving in Croatia on business, again proof
of business meeting / invitation is advised at this time.
Demonstrating
your COVID-19 vaccination status
To gain
entry into Croatia you will need to provide certificate of a two-dose vaccine
course from the following providers:
· Pfizer
· Moderna
· AstraZeneca
· Gamaleya
· Sinopharm
Alternatively,
receipt of one dose of Johnson & Johnson & Janssen will be accepted.
In both
cases vaccination must have completed 14 days prior to arriving in Croatia.
Croatia will
accept the UK’s solutions to demonstrate
your COVID vaccination status.
Please note
that your NHS vaccination card will not be accepted as proof of vaccination
status.
Where
to visit in Croatia?
Here we look
at some tips and facts ahead of your trip to the Adriatic.
Fast
becoming one of the most desired places to visit in Europe, Croatia is sat at
the crossroads of Central and Southeast Europe, on the Adriatic Sea.
With
stunning walled cities, delicious local cuisine, and an extraordinarily
beautiful coastline, Croatia is sure to dazzle its visitors.
CROATIA’S
CITIES
Dubrovnik
Arguably
Croatia’s most popular attraction to visit, Dubrovnik is a UNESCO World
Heritage Site. Despite being relentlessly shelled in the 1990s during Croatia’s
Homeland War, its mighty walls, sturdy towers, medieval monasteries, baroque
churches, graceful squares and fascinating residential quarters all look
magnificent again. For the ultimate view of the city, take the cable car up Srd
to appreciate the amazing back drop the city has to offer. Alternatively, for
all you die-hard Game of Thrones fans, take a themed tour of the city to take
in the sights.
Zagreb
Zagreb is
the capital and largest city in Croatia. It is also called the city of museums
as there are more of them per square foot than any other city in the world.
Having said that there is more to do than just browse around these historical
places of interest. With a combination of small traditional shops, larger
contemporary boutiques, markets and malls, it provides something for everyone.
Take in the city surroundings at one of the many cafes or enjoy some of the
delicious local cuisine on offer. Not quite on the same scale as the London
Eye, the Zagreb Eye is an observation deck located on the 16th floor
of a skyscraper situated in the corner of the main square to give a full
overview of the terracotta rooftops over the city.
Hvar
The 4th
largest of Croatia’s islands, Hvar has a growing reputation of being the more
upmarket destination in the country. Visited by many celebrities, this island
benefits from over 2800 hours of sunshine making it popular with those looking
for that sun drenched break. There is also the bonus that local hoteliers will
give you a reduction on your stay if you have more than 4 hours rain a day and
if it snows, your stay is free! This is how confident the locals are in the
weather here!
In its 20th
anniversary, Carpe Diem is far and out the night hotspot of Hvar, popular with
the rich and famous. Dance the night away here while enjoying a cocktail or 2!
The
National Parks
Almost 10%
of Croatia is made up of its national parks, offering spectacular waterfalls
and luscious forests to explore. Listed as a UNESCO World Heritage site,
Plitvice National Park is home to 16, interconnected lakes, famous for their
breath-taking colours.
Looking for
something more active? Head to Mljet National Park for kayaking, hiking, and
swimming set to a backdrop of stunning scenery.
HOW TO
GET TO CROATIA
Flights to
Croatia are offered all year round, with the budget airlines in the summer
months offering a wide selection of flights to both Zagreb & Dubrovnik. Flight
times from London to Dubrovnik are around 2 hrs 40mins, from Manchester just
under 3hrs. Head over to Skyscanner or Jetcost
to do a comparison on the best flights available.
There is the
option to reach Croatia via ferry/catamaran from Italy, if needed.
HOTEL
RECOMMENDATION
Hotel
Esplanade, Zagreb - Built
in 1925 as a suitably glamorous stopover for passengers on the Orient Express,
the five-star Esplanade is unquestionably Zagreb’s most upmarket hotel.
Restored to its fabulous former glory in 2004, it offers a level of opulence
you’ll find nowhere else in Croatia.
Prices start
from £109 per night for room only.
Head over to
Trivago to compare the best prices available on this hotel
Which
Currency?
The national
currency of Croatia is the Croatian Kuna, sub-divided into 100 Lipa.
One pound is
currently worth 8.4997 Kuna (as @ 21st July 2021 Currency Online Group)
Your money
will go a long way in Croatia, another reason it proves a popular city break
destination.
Head over to
Croatia Wise
for more insight into the prices per city visited within the country.
For the best
rates on your Croatian Kuna head over to www.currencyonlinegroup.com. We offer
free next day delivery on orders over £750 (order by 12pm). Your currency is
delivered to your door via Royal
Mail Special Delivery.
Prefer to go
cashless? Currency Online Group
offers their multi-currency card and app which allows you to take complete
control of your currency conversion with the click of a button. Load you card
up with GBP and convert to your required currency using live rates.
Used all the
funds on the card? … no problem just instantly top-up via the app.
Currency
Online Group’s multi-currency card is accepted free of charge at all Mastercard
locations worldwide.
©
Currency Online Group
21st
July 2021