French currency issues and how they affect real estate in France
Before committing to buy a new home in France you should familiarise yourself with French currency issues and real estate. France became a founding member of the Eurozone when they ditched francs in favour of the euro in January 2002.
This means sterling and other currencies will fluctuate against the euro and you should bear this in mind when entering the market for real estate in France.
General financial information and problems with French currency
You must have a French bank account to buy real estate in France. To open one you must be over 18 and take your passport, birth certificate and proof of address to the branch where you wish to open an account.
To open an account from abroad you must obtain an application form from an overseas branch of a French bank. You then choose the branch nearest to your French home. France´s banks allow you to open an account by post but only if the application includes:
- a reference from your current bank
- a photocopy of your passport
- a euro draft
Accounts for non-residents (complete non-resident) are available but, before opening one, it is recommended you ask the bank manager for clarification about terms and conditions. Cheque and current accounts are the most common type in France.
French currency issues can make your home in France more expensive
When you buy a home in France the actual cost will not become known until you have bought the currency to complete the purchase of your home. France is a Eurozone country and sterling can fluctuate against the euro by up to 10% in just a few months. The home in France you desire could become a good deal cheaper or more expensive.
If you have full funds available it is worth fixing the currency by means of buying it all on a spot contract. You would then hold it on deposit and send payments in euros.
Many people underestimate the importance that exchange rates have on the cost of real estate in France. Consequently, a few months later they face paying thousands of pounds more for their home. France offers some good investment opportunities but the majority of individuals do not make the most of them.
Most people, when buying real estate in France, exchange currency at their home bank and then transfer their funds abroad. This does not guarantee the best exchange rates or protect against French currency issues and risk.
A reputable UK or French currency specialist can help with these matters and to minimise the cost of buying real estate in France. Their access to exchange rates is calculated by the second and this means they can significantly undercut banks and help you save money on your home. France is a truly wonderful country but you should not pay any more than is necessary to live there.
