Moussaka hitting the fan
As our friends in the Aegean threaten to exercise a rare show of people power or, depending on your view, hold a gun to our heads, the future of the euro seems unsure – and without the benefit of a crystal ball, it’s impossible to know how this spat will end. Following a 25 year gestation, the birth of the Euro made life for most European house buyers far simpler, but Brits have always had to keep a close eye on FX rates. A small shift in value of Sterling can make a big difference to what you end up paying for your new French home – not least since between acceptance of your offer and having the keys in your hand, the process rarely takes less than 3 months. And, on occasion, you can have a 2 cent movement in one day – that’s about 1.8% at today’s rate.
Multiply this volatility over the period between when you sign the first contract and wire the bulk of the funds to the Notaire, and it’s potentially painful. If you’re lucky the rate can work in your favour, but either way it’s a gamble. So if you’re a non-eurozone buyer, take time to investigate buying currency forward, getting an option or hedging. There are loads of FX brokers out there – some an awful lot better than others – who can tell you about what’s on offer and, if they’re any good, explain it clearly. So get this boring – but necessary – stuff out of the way before you head off to look at houses, not least since when you find what you want, you’ll know if you can afford it.A final thought - my keyboard, like millions of others, only has a € symbol. If the Euro decides to go out onto the balcony with its service revolver and final cigar in hand, there’s a whole new industry in currency specific hardware awaiting. And a fair few new jobs too. Over to you, Lord Sucre.