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Moving back - money transfers


Rob G
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Hi,

As you may have read in another post, we're planning to move back to the UK in December. We've found a buyer for our house here and are hoping to buy in the UK. We're trying to get our heads around how quickly after signing our sale at the notaire's we'll be able to complete on our UK purchase. We reckon the key factor will be how long it takes to transfer money from France to the UK.

Let's say for the sake of argument we sign at the notaire's on a Tuesday morning. The notaire will receive the funds from our buyers, pay off our outstanding French mortgage and presumably send the remainder to our French bank account. So, the first question is, will that money arrive in our account on the same day? And will we be able to initiate a payment to the UK on the same day (i.e. all on the Tuesday in our hypothetical scenario?)

When selling a house in the UK, CHAPS payments are used as they are very quick - the funds usually arrive within about an hour. But when I send money from France to the UK using a standard international payment (which I can do free over the Internet), it takes two to three days to arrive. So, next question: are international payments available that will get our money from France to the UK in the same day?

Finally, we'd like to use a foreign exchange firm to try to book a decent exchange rate in advance. This means that, when we do transfer our money to the UK, we won't be able to transfer it straight to the solicitor's for our house purchase, but will need to send it to the foreign exchange firm first. I'm wondering whether this will cause further delays - will they be able to send it on to the solicitors via CHAPS on the same day, or will there be a day's delay?

In our hypothetical scenario of signing at the notaire's for our house sale on the Tuesay morning, it would be nice to think we could complete our UK purchase on the Thursday. Is this feasible? I realise I'll need to speak to our notaire, our bank and the currency firm to check this all out, but would be very grateful if anyone who's already been through this situation could trow any light on the mechanics of all these money transfers.

Thanks in advance,

Rob
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[quote user="sweet 17"]Friends from Cognac have just done this using a foreign exchange firm.  Money got to their UK bank account in just about a fortnight.[/quote]

I don't understand how it took a fortnight! It would be quicker to draw out cash and row across the channel!

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Hi,

Thanks for both replies so far. I posted the same question on another forum and got a mixture of answers there, too. Seems like it depends very much on the notaire. I'll give the notaire a call, explain the situation and see what he says.

Rob

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Dragonrouge, you're right – I was thinking about this last night – with the £ predicted to fall I'm going to have to think carefully about whether and at what point to book a rate.

I now have another worry. Even assuming I can get the money from the notaire quickly, how quickly can I get it from my French bank account (with Société Générale) to the UK? I've done some searching on French sites and have found people referring to "virements urgents" (urgent payments), but when I search the SocGen site I can't find anything resembling an urgent (i.e. same day) international payment. Looks like I will have to phone the branch, but I'm not hopeful they will have much knowledge of international payments.

Rob

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[quote user="Rob G"]I now have another worry. Even assuming I can get the money from the notaire quickly, how quickly can I get it from my French bank account (with Société Générale) to the UK? I've done some searching on French sites and have found people referring to "virements urgents" (urgent payments), but when I search the SocGen site I can't find anything resembling an urgent (i.e. same day) international payment. Looks like I will have to phone the branch, but I'm not hopeful they will have much knowledge of international payments.[/quote]

SocGen can do same-day transfers, but they need a physical signature, so you need to go in and arrange the principle of the transfer and sort out how you are going to give them permission to execute on the actual day. Basically they charge 10 € for a transfer over 50K€ plus the charges of whatever electronic system that they use. You need to think carefully (and be VERY clear to the bank) about whether the transfer is to be denominated in € or £ - probably € would be best.

Regards

Pickles

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[quote user="dragonrouge"]It would be an interesting exercise given the current rate of exchange to see what fx guys are quoting for a December fix![/quote]

At current interest rate differentials, there is really no difference between spot (current) and forward rates. Certainly not one you should really notice. If they charge you for a forward price (apart from margin perhaps) then they shouldn't.

 

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Timescale wise your notaire should be able to send funds straight to your broker, when it hits ther account you will be able to release the Sterling same day. I know when my broker sends sterling to my UK it is cleared and ready to use same day. This should allow you to complete on you UK house in time

Rate wise the pound should have further to fall given that we have broken through 0.90.

As the previous poster said there shouldnt be too much difference oin spot and forward rates
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Hi, We've just done this. It took 2 working days. the transfer from the notaire was overnight, and we then faxed Credit Agricole (having rung first) and they did an immediate transfer to the broker we used. Note - make sure you have something official, say Attestation, as our bank wanted to see a copy of it. (And to process our cancellation of house insurance)

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Hi Baypond so what you are saying is that if today its 1.10/£ and you book say £100000 for December that it general terms is also going to be 1.10?

I ask that question in that for new windows and the like I have to transfer £ across and payment due say in December.

I know nothing about such things but wondered if I could put in on my credit card and get a better rate?

1.10 makes them very expensive windows but they have to be made to measure but then again Impot give me 20% towards my tax bill so I suppose if I put that into the equasion then the rate does not look too bad.

However my experience of matters financial and returns and such like is limited and thus beyond me.

Oh for my very old fashioned but totally reliable accountant now retired in the UK.

rdgs
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Hi draginrouge

The biggest mistake journalists make is that they believe a future price for a currency pair, such as GBP/EUR is some kind of guess about where that currency pair will trade in the future. The fact is that GBP/EUR for delivery today vs a GBP/EUR transaction for delivery in the future is purely a function of GBP/EUR for delivery today +/- the interest differential between the currencies x the number of days. It has absolutely nothing to do with forecasting.

The FT frequently gets this basic fact wrong.

Giles

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So the question remains – in terms of forecasting what is going to happen to the £/€ rate, if we are going to need to convert quite a lot of € to £ in December, should we book a rate now, wait a while or not book one at all?

(I realise this is purely a matter of subjective opinion, but I'd be very interested in the view of those who undoubtedly have a more informed view of likely currency fluctuations than I do.)

Thanks,

Rob

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[quote user="dragonrouge"]Hi baypond I now understand so a forward fix is simply a arithmetical process as to the differential be it positive or negative x 90 days forward or whatever that may be.

I think I have it (perhaps) but certainly you undoubtedly know what it is all about.

regards and sincere thanks[/quote]

That is correct. It is purely arithmetical. Don't let any broker tell you otherwise. Currently GBP and EUR rates are almost exactly the same, hence no adjustment for periods up to about 6mths. After that you get some divergence of interest rates.

Giles

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[quote user="Rob G"]So the question remains – in terms of forecasting what is going to happen to the £/€ rate, if we are going to need to convert quite a lot of € to £ in December, should we book a rate now, wait a while or not book one at all?

(I realise this is purely a matter of subjective opinion, but I'd be very interested in the view of those who undoubtedly have a more informed view of likely currency fluctuations than I do.)

Thanks,

Rob

[/quote]

I know this sounds really really crass, but I am not allowed to comment or make any forecast or recommendation about currencies without posting a full disclaimer about it not being a recommmendation blah blah blah.

Personally, I try to buy/sell at the time i make the purchase/sale decision. Because it is at this time that you have worked out affordability. I have worked in foreign exchange for more years than i care to admit, and broadly speaking, long term forecasting is a bit of a lottery, hence the reason most get it wrong!

Giles

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