One of the key challenges that international businesses face is foreign exchange. When businesses transfer funds from one country to another, they have to deal with currency fluctuations and transfer fees. Here are a few things to have in mind when transferring funds overseas.

Foreign exchange challenges

Very often, businesses sending funds abroad are subject to unexpected currency movements in the values of currencies, which can have a significant impact on their funds. If the market moves against you, your funds by the time they are exchanged into the new currency, might worth less. Or vice versa. If the market moves to your favour, your funds might worth much more. But such movements are unpredictable and currency risks can be mitigated with the help of a currency exchange specialist as Universal Partners FX who can suggest ways to move you funds in the best possible way, securing your transfers and offering valuable support.

Too complex? What contract should you choose?

Choosing the right contract can be daunting and the complicated terminology can be discouraging. A spot contract refers to the exchange of currencies at the current (or “spot”) market rate and the two parties agree to exchange their currencies at a predetermined date. Another type of forex contract is called a forex forward contract. In a forward contract, two parties agree to change the currency at a predetermined date and exchange rate. Similar to forward contracts, forex futures contracts are managed on an exchange. Futures contracts and forward contracts are very safe and can be used to hedge against risk. Your dedicated currency specialist can walk you through your various options and help you choose what is best for your business and specific situation. But whether you choose between forwards, futures, or spots, it is important to understand the way the forex market works and gain a competitive edge in forex that can save you a lot of money.

What is Forex?

Forex, or foreign exchange, is the single largest and most liquid market in the world, with over $6 trillion changing hands every day as foreign exchange is essential to both businesses and individuals. From changing money when visiting another country, to banks trading funds with their customers and other banks, forex transactions are a regular and everyday operation. Forex traders or speculators also trade forex for profit and can do so as part of their profession or as a hobby. Whether professionals or beginners, forex traders earn a profit by buying one form of currency when it is priced low, and then selling it when it rises so they can potentially make a profit. International businesses also exchange money when paying their international suppliers.

Why Currencies Fluctuate?

Several factors affect the value of currencies. Money supply by changing interbank borrowing rates or printing more money can affect the value of a currency. Central banks’ decisions, policies and how much money is available in the market can have an important impact on the value of a currency too. The laws of supply and demand can also change the value a currency, since if a currency is appealing, traders would want to buy it, but if no one needs it, it will decrease in value.

Transferring funds?

If your business is making an international bank transfer, it is good to seriously consider a currency exchange company such as Universal Partners FX. Currency transfers with UPFX are usually faster, cheaper and equally secure than any bank. You can easily send funds abroad without any hassle and without too many intermediaries.

If you’re  transferring funds from or to a foreign bank account, our dedicated customer support team or your personal account manager will explain everything you need to know about making a transfer effectively. You can also use our simple and user-friendly online platform to transfer your funds in a fast, secure and affordable way. Get in touch now with Universal Partners FX and find out how you can make the most of your hard-earned money.

 

Buying your home in France might mean taking up a euro mortgage if you do not have the savings to finance your dream. If you do require a loan, you should start early so you know you have the finance and can plan with confidence your expenses whether that is for the kind of property you can afford or other related costs. Starting early, means you can research and find a mortgage with a more favourable borrowing rate, rather than planning it late and compromising with something less ideal. Especially, when it comes to purchasing a property abroad, having your finances in place means that you will be a more appealing candidate to those searching to sell their house rather than if you were still looking for a mortgage.

Mortgages

Buying in France is considered a good investment due to the country’s healthy economy. If you are borrowing from a French institution, bear in mind that you will be allowed to borrow one-third of your total gross monthly income. If you do not have a stable monthly income, it will be very difficult to secure a loan, as salaried employees and especially those working for the same employer the last three years are preferred.

For a French mortgage, you can get variable or fixed rates from 1.50%-2.50% and deposit 15% to 25% of the property’s purchase price. The maximum for a repayment loan is 85% with 25 years maximum term, or 75% maximum for an interest-only mortgage and 15 years maximum term. Interest only requires the client to have a lot of assets and is more difficult to obtain. The minimum for a loan is usually around €150,000.

Fixed- or variable-rate?

While a fixed-rate mortgage might offer the security of standard and consistent payments, it is usually more expensive than a variable one whose rate fluctuates depending on the movement of interest rates. This means it can be to your benefit or go against you, making for example a monthly payment of €400 increase to as high as €600, even though this is rarer. In France, most mortgages are fixed-rate ones.

Life Insurance

Apart from getting a building insurance, which your bank might also arrange, you will also need life insurance, again also a product that can be offered by your bank. This depends of course on the lender and the value of the mortgage. Life insurance will guarantee that you can repay the loan and in some cases you might be asked to provide further documents such as a general medical examination certificate or blood analyses. If you are travelling regularly, your bank might also request to sign a document where you explain where you have travelled the last 24 months, or where you will be travelling the following 24 months, so they know your life is not threatened.

While you have the option to borrow from a UK-based bank, this won’t be easy and going to a French bank is the usual option with different banks having their own criteria.

Getting in touch with a French lender that specialises in offering mortgages to British expats might save you a lot of time and aggravation, as they will tell you exactly the requirements and help you get the best possible deal.

Use a currency specialist

Similarly, getting in touch with a specialist currency broker will also save you lots of money in the long term. Transferring sterling to euro can cost you bank fees, whereas a currency transfer specialist such as UPFX will do so without extra costs while offering you competitive exchange rates.

If you are a British buyer, and want to save money while buying your dream home in  France, now is the time to get in touch with your currency broker. A currency specialist such as Universal Partners FX can help you navigate the current market while taking into consideration your specific needs, goals and your budget.

The British Pound could strengthen against the Euro and Dollar in the coming weeks if economic data continues to beat expectations, according to the latest projections by economists. But, analysts at Bank of America have told clients on Tuesday that Sterling was more like an emerging market currency. Lead analyst Kamal Sharma said that the currency’s movements the last four years since the UK Brexit referendum have been “neurotic at best, unfathomable at worst.”

Pound: An emerging market currency

It is not the first time that the pound has been described as an emerging market currency. Last year, in September, Bank of England governor Mark Carney said that Brexit-related volatility had made the pound act like an emerging market currency.

According to this week’s reports, “Sterling’s spreads and implied volatility – the future range investors expect GBP to move in – remain far wider than other major world currencies, such as the U.S. dollar, euro or Japanese yen, and resemble something closer to the Mexican peso.” Brexit uncertainty and the possibility of negative interest rates have hurt investor sentiment, BoA analysts said.

Better than expected data could offer support for Sterling

But Pound Sterling Live stated that if UK economic data continues to come in better than expected the pound will be supported. It did note, however, that “those looking for a stronger Sterling will continue to have to exercise patience in the near-term.”

With recent economic figures beating expectations and markets underestimating how quick the UK’s economic recovery will be, there is a “decisive shift in momentum.” Tuesday’s PMI data for June were better than expected with the Markit/CIPS Manufacturing PMI at 50.1, the Services PMI at 47, and the Composite PMI at 47.6, all above forecasts.

According to analyst at DNB Markets Kjersti Haugland, things are even more positive as there is a significant rebound of the economy. He said: "A literal interpretation of the figures suggests that manufacturing activity stabilised in June while service sector activity fell further, as a reading below 50 indicates a contraction compared to the previous month. However, some of the respondents may make a pre-Covid-19 comparison instead. Therefore, the sharp increase in June suggests activity is picking up quicker than expected.”

The British Pound does well when the UK economy is growing, unlike the US Dollar which strengthens when the economy is in decline due to its safe haven status. So, if the UK economy continues to grow and economic data comes out stronger than expected, then the pound will find support. This coupled with an easing of lockdown restrictions and the opening of businesses will help the economy recover. As the PM Boris Johnson announced on the 23 June, pubs and restaurants, campsites, hotels and holiday homes will reopen on 4 July. Other businesses such as spas, nail bars, casinos and swimming pools will remain closed.

However, a stronger Pound might be a distant possibility for now, as Sterling was the worst performing currency the past month out of the G10 and was “near the bottom of the pack which reflects a short- to medium-term trend is in place against many major currencies and this will prove tough to crack.”

 

With Brexit uncertainty to continue due to the ongoing negotiations and the harsh stance of the Bank of England both on quantitative easing and interest rates, the pound will remain volatile.

If you are a business sending money abroad or an individual transferring your funds and are worried about the pound’s volatility due to the current market conditions, please get in touch with Universal Partners FX. UPFX’s dedicated foreign exchange specialists can help you transfer your funds safely and maximise the value of your money.

British businesses conducting international trade and transferring their funds cross border regularly are increasingly worried about Brexit and the UK’s future relationship with the EU. Boris Johnson has been warned that the current trade talks are failing and that he needs to press the European commission president, Ursula von der Leyen, and EU governments to focus their attention on the negotiations in order to reach an agreement with the British government.

The prime minister has returned to Downing Street on Monday, and he needs to act fast in order to rescue the negotiations before 31 December when the UK will leave the single market and customs union. Both the British government and the EU have agreed that they need to see progress by June, while the UK government has said that there is a possibility to leave the EU without a deal.

The two sides will be meeting again on 30 April. The UK’s chief negotiator David Frost has rejected an extension of the transition period as the government is confident that it can agree on a free-trade deal.

The prospect of no-deal Brexit

However, the prospect of leaving the EU without a deal has become even more real as there are only two rounds of video-conference talks left, while senior figures from both sides agree that delivering a deal is now highly unlikely. An EU official has also noted the added problems of having to communicate online: “You don’t see all the faces of the people around the table; you don’t see the body language, you cannot have discussion in the margins. But having said that, this is how we are working now; we need to make the best of it.”

Last week’s talks have not been progressing successfully either, as there was disagreement between the EU’s chief negotiator, Michel Barnier, and his British counterpart, David Frost. Barnier pointed out that UK officials failed to engage and instead “listened politely” to the EU’s proposals. As he said: “I regret it, and this worries me.” According to the UK, despite their commitments to maintain high standards, the EU rejected proposals regarding the removal of certain trade barriers. Additionally, the UK disagrees with the central role that the European court of justice will play in dispute settlements.

In regards to the issue of Northern Ireland, there are concerns whether the UK will implement the Northern Ireland protocol  in the withdrawal agreement in order to avoid a hard border in Ireland and maintain checks on goods travelling from Britain to Northern Ireland. An EU official said: “You need to have customs checks on goods arriving in Northern Ireland, veterinary controls, a VAT system needs to be put in place.”

UK government not seeking an extension

The UK government has warned EU leaders that they need to change their position if there is going to be a post-Brexit trade deal. The PM believes that there will not be an agreement unless the EU recognises the UK as “an independent state.”

Michael Gove, Cabinet Office minister, has also told MPs that the government will not seek an extension to the transition period, which ends on December 31. He said that extending the period will only force Britain to make a financial contribution to the EU budget which “could be spent on our NHS.” He added that the EU has failed to recognise the UK’s unique status and instead has treated Britain “like the Ukraine,” as if it were a country seeking closer relations with the bloc.

 

If you are a business transferring funds across Europe and are worried about your payments, protecting your funds due to unexpected currency movements and securing the best exchange rates, get in touch with Universal Partners FX. UPFX’s currency specialists will help you navigate the market and can secure the most competitive exchange rates. Give them a call today or get a free quote.

Life after Brexit might seem uncertain, but for many Brits the decision to buy property in Spain is a certain fact. While there might be certain changes in terms of British citizens’ rights with perhaps more documentation and bureaucratic controls, the promise of a sunnier climate and a richer lifestyle is definitely a key factor when moving to Spain.

UK nationals living in the European Union

As the government notes, continuing to live and work in the EU after Brexit would be influenced by each country’s rules and regulations. If you are a resident in Spain, you should register as one, as well as register for healthcare. You should also check if your passport is still valid for travelling and exchange your UK driving licence for a Spanish one.

Buying property in Spain

Buying property can be a very hard decision and a very complicated process. But if you have done your research and sought out the right people to offer support and guidance, you will easily navigate all the complexities and be prepared for any unexpected changes. For one, getting legal advice from an independent lawyer who had good knowledge of Spanish land law (urbanismo), will help you when dealing with developers or estate agents. In this respect, you will be protected from fraud and you will safeguard your interests and finances. While you might be very excited buying or building your own home abroad, being careful with the individual agents and lawyers, and always looking after your own interests is very wise in order to avoid disappointment.

The same goes with the Spanish notary public who will offer legal advice, prepare the contract and issue the public deeds. You might prefer to work with a British estate agent but ensure that they are reliable and registered with the Law Society in the UK. If you are looking for a lawyer or translator the government’s website has qualified professionals on their website.

If you need more assistance with the language and communication, especially when signing a contract, you will need to get an independent translator by checking the Spanish Ministry for Foreign Affairs website.

Things to do before transferring money to purchase the property

Before you buy the property, make sure you check the land registry extract (nota simple), so you know that the sellers are the same with the registered owner(s) of the property and land. It will be wise to check that there are no debts or charges, including a mortgage or any legal proceedings against the particular property. Documents such as the planning permissions and the property itself should have all licences and permissions.

In any case, having the property surveyed by a chartered surveyor would be the best route when you want to have everything in order without worrying. When you purchase the property you will pay tax, so you should know the cadastral value of the property and how much purchase tax will be due.

Check important documents:

First, make sure that the previous owner paid the owner’s annual property tax (IBI), by seeing the receipt. The town hall should provide a certificate proving that there are no unpaid rates from previous years.

You will need to get the cadastral certificate (with boundaries and size of your plot) that must correspond to the Land Registry records. You will need a habitation certificate to connect the electricity and water companies, as well as a receipt to prove all utility bills have been paid. You might also need a certificate signed by the President of the Community of Property Owners stating that there are no outstanding debts.

From 1 June 2013, all homes for sale or to let in Spain need an energy efficiency certificate, so ensure that the seller has this certificate. Once you get all documents, you should register the property in your name with the Land Registry.

Transferring funds

When you have all the papers in order, you would start thinking about transferring your funds from a UK bank account to a Spanish account to pay for the property. Transferring large amounts of money can be stressful, so getting in touch with a reliable foreign exchange specialist such as Universal Partners FX will protect your funds and save you time and money. UPFX have many years of experience in the currency market and can provide the best tailored solution for your money. Get in touch with them today and find out how they can help you make the most of your money.

Moving to France

Buying a property in France can be a massive commitment, especially in times of Brexit uncertainty. However, if you make the right decision, the rewards will be plenty for you and your family. This is what you need to know about the property market.

A robust property market

Unlike other countries that have been hit by the global economic crisis, France has managed to retain a healthy property market, attracting international investors, with a stable year-on-year price growth.

According to online news outlet for expats, Expatica, “in the last quarter of 2017, prices increased by 3.3% year-on-year, with older apartments (4.5%) leading the charge. The biggest increases came in Paris, where second-hand properties increased in price by 5.1% in the last quarter of 2017 and 8.6% year-on-year. So far in 2018, prices have remained robust, though transaction levels actually fell slightly, with 42% of banks reporting a drop in loan applications in February 2018. France’s property market upturn since 2015 has largely been fuelled by low mortgage rates, which in February 2017 remained very low – at just 1.61% in February 2018.”

With inflation beginning to increase at a stable level in 2018 and a weak euro, foreign buyers “can get a more attractive exchange rate for their property investments and essentially pay less for a property than compared to recent years.”

Rent first, buy later

No matter where you are considering to buy, it is always beneficial to gain a better understanding of the place and what it can offer you, all year around, by renting the property first. This will help you experience the different times of year and get a clearer idea of the possible disadvantages of the property and its surroundings.

How to search for property

When you approach a realtor, or agent immobilier, you need to make sure that the company is registered and has financial guarantee, liability insurance and license by the prefecture de police. To help protect your interests, the French government has created the Conseil National de la Transaction et de la Gestion Immobilières (CNTGI) in 2014, to maintain ethical practices and regulations for real estate agents. Once you found the right realtor for you, you will sign a bon de visite, which will demonstrate that you have viewed specific properties.

Location, location, location

France has 21 regions, so you will see variations in prices and different properties. Property prices are usually determined by location.

Paris and other big cities are more expensive, as they offer more employment opportunities and a more cosmopolitan lifestyle with a variety of entertainment and cultural events to choose from. Less expensive are properties in the city suburbs and small towns, but beware, wine growing regions, naturally, are pricey. So the price will increase with such luxuries as swimming pools, vineyards and romantic barns. If you are dreaming of that scenic stone house in the countryside, with vines climbing on the walls, then this will be cheaper than a very modern building with all the relative conveniences. According to Expatica, the eastern side of France has seen some important price falls, but possibly prices will start rising again slowly.

Costs to consider

Finally, it would be good to bear in mind, that there are extra costs beyond the property price that you will personally have to settle. As property agents French Connections warn, “Having found your ideal French property at what seems like a very reasonable price, it can come as a bit of a shock to those used to the UK market that the buyer may have to pay the agency fees and is responsible for all the legal fees – this can make your French house up to 20% more expensive than you first thought.”

Once you know what is included in the asking price and other costs you will need to pay, you might be interested in getting a tailored solution for transferring your funds from the UK. Brexit uncertainty and a volatile pound can affect your finances significantly. Universal Partners FX can offer invaluable support and guide you through the process, recommending the most optimal time to transfer and exchange your currency, giving you peace of mind. Get in touch with UPFX now and find out how much you will save through a foreign exchange broker.