Why FX deserves equal billing with stamp duty
On a £500,000 purchase, a 5% move in GBP/EUR — entirely routine in any 6-month window — costs you £25,000. That is more than every Spanish tax and fee combined on a resale property in Andalucía. And yet most UK buyers spend three weeks negotiating €5,000 off the asking price and zero minutes managing currency.
The three tools you actually have
1. Spot conversion
Done through a high-street bank, this is the worst option — typical spread of 3–4% versus interbank. On £500k that is £15,000–£20,000 of margin to your bank, paid in one transaction.
2. Specialist FX broker
A regulated FX broker (Wise, Currencies Direct, Equals, Lumon, Caxton FX) typically charges 0.4–0.8% all-in on a six-figure transaction. Opening an account takes a week. This alone saves the average UK buyer £8,000–£15,000 on a single conversion.
3. Forward contract
The serious tool. You agree to buy a fixed amount of euros at today's rate, for delivery in 1–12 months. Most brokers require a 5–10% deposit. Use this the moment your offer is verbally accepted — typically 8–12 weeks before completion — and you remove FX risk from the deal entirely.
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Start matchingA typical timeline
- Offer accepted (week 0) — open FX broker account, lock 10% deposit at spot
- Contrato de arras signed (week 2) — set up forward contract for the 90% balance
- Completion (week 12) — pay the agreed sterling, receive the agreed euros, regardless of where the market moved
The mistake to avoid
Do not try to time the market. Buyers who wait for "a better rate" after their offer is accepted lose money roughly two times out of three. The job of currency hedging is to remove risk, not to make profit.
Cost-benefit summary
On £500k, switching from high-street bank to FX broker plus forward contract typically saves £15,000–£25,000 and removes downside risk. The total cost of the forward contract is essentially zero — brokers earn on the spread, not on a fee.
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