Banks not best for foreign property deals

Investors are being warned away from banks when changing the thousands of pounds needed to buy a foreign property.

According to brokers Foreign Currency Direct, buyers could have lost £1.8 billion due to poor deals on foreign exchange, banks typically giving worse rates for Euros than brokers.

Yet 86 per cent of people buying abroad still use their bank, Commercial FX claims.

“To make the most of your investment, you need to get the best rate for your currency, which means avoiding the high-street banks and using a specialist foreign currency provider,” said Mike Smith at Commercial FX in the Times.

His comments come as more Britons prepare to buy a second home on the continent, either as an investment or as a holiday home.

However, costs can mount up if foreign banks charge for receiving overseas currency or if there are fees involved.

Also, exchange rates can change but foreign exchange brokers can fix a rate for up to two years in advance, giving buyers knowledge of how much their property will cost.

As broker Mark Bodega said in the same article: “We always remind people that they would never agree to buy a property in Britain if they didn’t know the final cost.”

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