Britons buying second properties abroad are adding thousands of pounds to the asking price because they are not protecting themselves against shifts in currency, according to foreign exchange specialist Travelex.

Data from Travelex’s FX for homebuyers service shows that more than 1.25 million Britons currently own a property abroad, either as a retirement or holiday home or as an investment. The figures also show that the number of people in the UK buying foreign property has increased by more than ten per cent over the last twelve months with more than 160,000 people buying in the Eurozone over the last year.

And that trend looks set to continue. An airport survey by Travelex over December 2004 shows that foreign home ownership is becoming increasingly desirable with more and more British tourists spending time on their holidays looking at property for sale. One third of the 1,000 holiday-makers questioned claimed to have spent some of their time abroad inquiring about property. One fifth (22 per cent) claimed that they had spent at least an hour browsing properties for sale in estate agent windows, and one in ten stated they had made enquiries to obtain further details about properties they were interested in.

Despite the increase in interest, a large number of those looking to invest could be losing money because they are unaware of the risks associated with foreign exchange. Up to £7,000 can be added to the price of the average foreign property because of shifting currencies and delayed completion times.

Dino Leo, Development and Relationship Manager of Travelex’s Foreign Exchange for Homebuyers service commented: “Significant savings can be made when people follow simple rules. Those purchasing property abroad who actually watch currency movements, and who are aware of the impact that delayed completion times can have on the cost of a property, can actually save money”.

Travelex investigated completion times and the shift in the value of the Euro in five of the Eurozone countries most popular among British buyers in the six months to December this year and found that on an average purchase at least £6,800 is added to the price of the property. The study found that those buying in France, where the average completion time for a property is between 16 and 20 weeks, were losing the most. A 150,000 Euro property bought in France in August 2004, the month when most foreign property purchases are made, would have cost £99,173.55. Today the same amount of Euros would cost £106,007.07, adding more than £6,800 to the cost.

Dino Leo continued: “Buyers are agreeing a price for their property to find that during the time it takes to complete, the Euro grows stronger, leaving the buyer having to spend more pounds to buy the same amount of Euros. Average completion times run to 20 weeks in some Eurozone countries meaning a long period for the currency to change in value”.

Figures from December 2004:

In response to the problem, Travelex is now urging holiday homebuyers to think carefully about their overseas purchase, considering the options that will protect them against fluctuating exchange rates and currencies, ultimately saving them money that they could use to put towards their place in the sun. Travelex offers a number of simple rules to follow when buying abroad:

1. Take into account the period of time it will take to complete
2. Monitor the value of the currency you are buying the property in
3. Talk to an expert
4. If the currency you are purchasing looks to be strengthening over the period you will be completing fix the price of the currency when you agree the purchase
5. Get to know the jargon, the two most important terms when exchanging money are ‘spot transaction’ and ‘forward contract’:
   • A spot transaction - enables the buyer to transfer the available funds immediately to the agent or proprietor abroad in line with the exchange rate at that time. This is an instantaneous transaction and is suitable for those that want to wait until the last minute before transferring the money.
   • A forward contract - allows the buyer to fix the exchange rate now for a completion date any time in the future. This option is ideal for buyers who have made an offer on their chosen property and want to fix the exchange rate so that they do not lose to a strengthening Euro in between agreeing the price completing.

Those interested in Foreign Exchange for Homebuyers can either contact the consumer phone line on 0870 010 0095
or email: fx4homebuyers@travelex.com.
Further information can also be found on their website at www.travelex.co.uk

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Notes to Editors:

About Travelex

Travelex is the world’s largest foreign exchange specialist, with over 650 retail branches at key airport, seaport and rail locations, in addition to tourist and business centres around the world. Around 40% of the world’s airline passengers, over 1.3 billion people, pass through airports at which the business operates including the major gateways at London, New York, Hong Kong, Frankfurt and Sydney.

The group is one of the world’s leading providers of outsourced travel money to banks, travel agencies and other financial institutions. It is also the world’s largest non-bank provider of commercial foreign exchange services and the world’s second largest issuer of Travellers Cheques.