Buying a House Abroad - Should I exchange my money before the Budget ?

Albermarle

If the markets were thinking that the Budget would affect the Pound, it would already have moved by now as markets do not wait for things to happen , they pre empt them.
However if she does something unexpected ( ala Liz Truss) then all bets are off. However the Chancellor will be acutely aware of the risks involved so it would be very surprising to see anything like that happen. Remember bond markets like tax increases and spending cuts, as it balances the books better.

Leodogger

Albermarle said:

If the markets were thinking that the Budget would affect the Pound, it would already have moved by now as markets do not wait for things to happen , they pre empt them.
However if she does something unexpected ( ala Liz Truss) then all bets are off. However the Chancellor will be acutely aware of the risks involved so it would be very surprising to see anything like that happen. Remember bond markets like tax increases and spending cuts, as it balances the books better.

You could be right but I would feel more reassured if I could find a currency house that will lock in a rate around the 1.20 area.   I am thinking perhaps a forward contract is needed as our purchase could take 4-8wks and we can't afford for the rate to tumble by even a couple of cents which would make as much as 3000 euros price difference to our purchase price.

Grumpy_chap

The OP can hedge their bets by switching half the money to Euro now and half after the budget.

Leodogger

Grumpy_chap said:

The OP can hedge their bets by switching half the money to Euro now and half after the budget.

That sounds like the safest bet, at least that way we would only lose half the added drop in the value of the Euro but would gain on the other 50% if it goes up in value😁

Leodogger

Would I be better off using Wise and sending and converting my £125,000 sterling into euros in my account with them until I need to pay for the house?   Is it the best thing to do to leave that large amount of money in a Wise Account?

BikingBud

Leodogger said:

Albermarle said:

If the markets were thinking that the Budget would affect the Pound, it would already have moved by now as markets do not wait for things to happen , they pre empt them.
However if she does something unexpected ( ala Liz Truss) then all bets are off. However the Chancellor will be acutely aware of the risks involved so it would be very surprising to see anything like that happen. Remember bond markets like tax increases and spending cuts, as it balances the books better.

You could be right but I would feel more reassured if I could find a currency house that will lock in a rate around the 1.20 area.   I am thinking perhaps a forward contract is needed as our purchase could take 4-8wks and we can't afford for the rate to tumble by even a couple of cents which would make as much as 3000 euros price difference to our purchase price.

If you can't afford the change are you overreaching?

There will always be issues with trying to time exchange rates and when also trying to time property purchase the compound effect of variables may be neutral, work for or work against you. How much are you "losing" by not currently getting the best possible UK interest return?

If you are buying the property for the rest of your life how does the ~€3000 work out as a daily rate? A bottle of beer? A bottle of wine? Consider the benefits over time rather than the apparent immediate costs.

Or if that is not tolerable then perhaps a more risk tolerant purchase, with more headroom to accommodate ~ €3000 variance might be more appropriate. 

Leodogger

BikingBud said:

Leodogger said:

Albermarle said:

If the markets were thinking that the Budget would affect the Pound, it would already have moved by now as markets do not wait for things to happen , they pre empt them.
However if she does something unexpected ( ala Liz Truss) then all bets are off. However the Chancellor will be acutely aware of the risks involved so it would be very surprising to see anything like that happen. Remember bond markets like tax increases and spending cuts, as it balances the books better.

You could be right but I would feel more reassured if I could find a currency house that will lock in a rate around the 1.20 area.   I am thinking perhaps a forward contract is needed as our purchase could take 4-8wks and we can't afford for the rate to tumble by even a couple of cents which would make as much as 3000 euros price difference to our purchase price.

If you can't afford the change are you overreaching?

There will always be issues with trying to time exchange rates and when also trying to time property purchase the compound effect of variables may be neutral, work for or work against you. How much are you "losing" by not currently getting the best possible UK interest return?

If you are buying the property for the rest of your life how does the ~€3000 work out as a daily rate? A bottle of beer? A bottle of wine? Consider the benefits over time rather than the apparent immediate costs.

Or if that is not tolerable then perhaps a more risk tolerant purchase, with more headroom to accommodate ~ €3000 variance might be more appropriate. 

It's not a matter that we can't afford the 3000 euros either way, but like most people we want to maximise our investment.   After all no one voluntarily would hand over 3000 euros for nothing if they can avoid it.   This is our last house move as we are in our mid 70's but it makes sense to take care of what savings we have as they can't be replaced once gone now !

BikingBud

Leodogger said:

BikingBud said:

Leodogger said:

Albermarle said:

If the markets were thinking that the Budget would affect the Pound, it would already have moved by now as markets do not wait for things to happen , they pre empt them.
However if she does something unexpected ( ala Liz Truss) then all bets are off. However the Chancellor will be acutely aware of the risks involved so it would be very surprising to see anything like that happen. Remember bond markets like tax increases and spending cuts, as it balances the books better.

You could be right but I would feel more reassured if I could find a currency house that will lock in a rate around the 1.20 area.   I am thinking perhaps a forward contract is needed as our purchase could take 4-8wks and we can't afford for the rate to tumble by even a couple of cents which would make as much as 3000 euros price difference to our purchase price.

If you can't afford the change are you overreaching?

There will always be issues with trying to time exchange rates and when also trying to time property purchase the compound effect of variables may be neutral, work for or work against you. How much are you "losing" by not currently getting the best possible UK interest return?

If you are buying the property for the rest of your life how does the ~€3000 work out as a daily rate? A bottle of beer? A bottle of wine? Consider the benefits over time rather than the apparent immediate costs.

Or if that is not tolerable then perhaps a more risk tolerant purchase, with more headroom to accommodate ~ €3000 variance might be more appropriate. 

It's not a matter that we can't afford the 3000 euros either way, but like most people we want to maximise our investment.   After all no one voluntarily would hand over 3000 euros for nothing if they can avoid it.   This is our last house move as we are in our mid 70's but it makes sense to take care of what savings we have as they can't be replaced once gone now !

You said you can't afford! 

That is very different to I would prefer not to!

So consider wine value 3000/52/10 is perhaps about €5.80 per week

Leodogger

BikingBud said:

Leodogger said:

BikingBud said:

Leodogger said:

Albermarle said:

If the markets were thinking that the Budget would affect the Pound, it would already have moved by now as markets do not wait for things to happen , they pre empt them.
However if she does something unexpected ( ala Liz Truss) then all bets are off. However the Chancellor will be acutely aware of the risks involved so it would be very surprising to see anything like that happen. Remember bond markets like tax increases and spending cuts, as it balances the books better.

You could be right but I would feel more reassured if I could find a currency house that will lock in a rate around the 1.20 area.   I am thinking perhaps a forward contract is needed as our purchase could take 4-8wks and we can't afford for the rate to tumble by even a couple of cents which would make as much as 3000 euros price difference to our purchase price.

If you can't afford the change are you overreaching?

There will always be issues with trying to time exchange rates and when also trying to time property purchase the compound effect of variables may be neutral, work for or work against you. How much are you "losing" by not currently getting the best possible UK interest return?

If you are buying the property for the rest of your life how does the ~€3000 work out as a daily rate? A bottle of beer? A bottle of wine? Consider the benefits over time rather than the apparent immediate costs.

Or if that is not tolerable then perhaps a more risk tolerant purchase, with more headroom to accommodate ~ €3000 variance might be more appropriate. 

It's not a matter that we can't afford the 3000 euros either way, but like most people we want to maximise our investment.   After all no one voluntarily would hand over 3000 euros for nothing if they can avoid it.   This is our last house move as we are in our mid 70's but it makes sense to take care of what savings we have as they can't be replaced once gone now !

You said you can't afford! 

That is very different to I would prefer not to!

So consider wine value 3000/52/10 is perhaps about €5.80 per week

Can anyone afford to throw away 3000 euros?

BikingBud

Still not sure why you consider it throwing money away.

You have decided to invest in moving to Spain. Would you be worrying about trying to time the exchange rate if there was not an imminent forthcoming budget?

Have you got the funds from the sale in a high interest savings account yet? If not how much has that cost you in lost interest?

Bear in mind as a couple you are likely to have an extra £920 ayear from Apr 25 and will likely retain the same future indexation as the UK pension recipients.

Perhaps if you had a Spanish bank account then it might be easier or are you worried that the funds will get taxed?

Control what you can, the markets will vary, if you luck in then great, if not then it might cost you a bottle a wine a week over 10 years. If that will ruin your life then you have greater worries.