In this article, we're going to explore a more financial side of things with a short guide to transferring money to France from the UK.
Sending Money to France from the UK
Besides Spain and Ireland, France comfortably remains the most popular destination for Brits to move to. With cheaper property, stronger labour laws, and marginally better weather, it’s easy to see why. And, despite the proposed rivalry between countries, the two are deceivingly similar in culture and societal makeup.
Whilst French property is popular across many different European countries, of the 300,000 foreign second-home property owners, over a quarter of them are Brits, followed by Italians, Belgians, and Dutch.
It also makes sense for strong foreign interest in French property in 2023, because of the poor domestic markets elsewhere. The UK has one of the highest base rates in Europe, and it’s put them on the brink of a mortgage crisis. Property is expected to fall in 2023, and many people are struggling to meet repayments due to fixed terms being just a couple of years in length.
France, on the other hand, has a steady and growing property market even in the face of economic headwinds and social unrest. Whilst the barriers to move abroad for Brits have increased due to Brexit, they’re more determined than ever to overcome them.
A strong Pound entices investors
Another reason behind the demand to make a move across the Channel is due to a strengthening pound. In recent years, both the pound and euro have struggled against the dollar. However, the pound even fell against the euro, and was even 90p to the euro a few times this year.
In October last year, however, parity was almost reached (~0.98). But with the constant base rate increases from the Bank of England - who are more capable than the ECB in increasing rates without risking defaults - the euro now costs only 85p, making it cheaper than its average price over the past 5 years.
However, with the UK’s bleak economic outlook with forecasts of below-EU growth, the Bank of England could quickly change their tune upon recession. If that is the case, time is of the essence for British overseas buyers, as the strong pound may not be here to stay.
Ways to transfer money overseas
When sending money from the UK to France, there are a few different options. According to Moneytransfercomparison's list, the four options are:
High street Banks
Online Money Transfer Providers
Below is an assessment of each option for a property purchase:
High Street Banks
Sending money overseas with a large bank is a familiar process; it’s been a standard way of sending money overseas for many years. Whilst SWIFT and large banks provide great security over your large transfer of money (buying a property in France will likely require anywhere between £50,000 and £1m+), it may not be as reliable as you think.
Fees will likely be high for such a transfer, along with lacklustre exchange rates. For such a large transfer, even a 2% exchange rate spread will set you back thousands of pounds. Transfers are not particularly fast either this way, and you will not receive specialist support.
Currency brokers, and in particular ones that specialise in property purchases, are potentially your best bet. Generally, currency brokers will have more competitive exchange rates than a bank. The extra effort of setting up the order with a dedicated broker will certainly be worthwhile, as they can help you navigate the complex world of overseas purchases.
This is also your only option if you’re looking to lock in the current strong pound and hedge against any fluctuations. Forward contracts and Options can mean guaranteeing your buy-price for the property in pounds, so you know exactly what you will pay. After all, a €1m French property today costs £859,000, but just three months ago in April would have cost around £40,000 more (0.90 exchange rate).
Online Money Transfer Providers
Money transfer companies like Revolut and Wise are great services, but they’re not suited to an overseas property purchase. Many money transfer companies have maximum transfer limits, and even if you find you’re under this limit, they’re generally not going to have sufficient customer service for such a delicate transfer. No phone support can make people feel uneasy when dealing with large amounts of money, not to mention the lack of brokerage expertise or hedging products.
If this still isn’t an issue and your property is cheap (or your down payment is small), they may be a viable option. However, remember that whilst they have good exchange rates for small payments, they don’t become cheaper for larger payments (unlike many brokers), they stay the same.
Remittance companies like Western Union tend to focus more on cash transfers (or pickups). These are great for those living without access to bank accounts or modern financial infrastructure, but they’re not useful for buying a property abroad. All property transactions are completed digitally.
Send Money to France: Final Word
With French property performing well at a time of a strong pound, it may be the perfect storm for British property buyers with a wandering eye. For those looking to lock in the preferable exchange rate right now for their purchase, a currency broker is the best option available. However, money transfer companies are great for expats in France for daily spending (or making small pension transfers), along with a steady French bank to secure large deposits of savings.