Monday, 30 November 2015

What can go wrong?

Last month we discussed how to successfully make an offer to buy a house in France. As promised, here are a few examples of what may go wrong.

First of all in making a “cheeky” offer, which a few clients find they cannot resist doing, in the event that they then want to make an improved offer, they will sometimes have alienated the vendors so much with their initial offer that subsequent proposals or offers are not possible. So be guided by your agent before you make that low offer.

Moving on, and assuming that your offer is accepted, and a Compromis de Vente is signed then everything normally goes to plan. But there can be problems, and here we look at a few of the most common events.

Probably the most frequent is the refusal of a lender to grant a mortgage. Too many times, lenders provide a positive “in principle” decision, and then when the full dossier is received, they turn the mortgage down. For the buyer, so long as they have had a “suspensive condition” for the loan inserted in the contract, and they are within the set time frame, the letter of refusal from the bank is sufficient for the Notaire to cancel the contract and refund your deposit. Please note, you need a refusal in writing to be lodged with the Notaire by recorded delivery (AR) by the date mentioned in the contract. If not, you are in breach of the contract and your deposit at risk.

Sometimes, it is possible that one of the parties (buyers or seller) dies between signature of the CDV and the Acte de Vente (completion). Because we have all of our contract signed via a Notaire, they always cover this eventuality. Many other agents prepare their own CDVs, and often there is no mention of what happens in such situations. Thus you have a problem, and one that can only be sorted out by going to court. For our clients, there is a clear stipulation – if a vendor dies, the survivor & or the estate of the deceased is obliged to sell; if either of the buyers dies, then on their side, they have the choice of whether to proceed with the purchase or withdraw. In this event, they would get their deposit refunded.

Another stressful situation is that involving the funds for completion. Over 95% of our clients use our dedicated team of currency experts. They always get the money to the right place and on time. But there is always one client who wants to use his own bank for the transfer, (despite the poor rates on offer), because he plays golf with the manager or they have used them for 20 odd years etc. Banks are not used to sending money Internationally. They often leave it too late, and sometimes make a mistake with the Bank details (IBAN numbers) and the money vanishes into the ether.

The best solution is to get the money sent a week or so in advance, to the Notaire, and we will check / confirm safe receipt of the funds. No stress or hassle, and a relaxed time at the étude of the Notaire. Quite the opposite, if the buyer has done their own thing and you are trying to trace the payment at literally the 11th hour …

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Friday, 20 November 2015

Sterling/Euro fails to hold above €1.43

The last week has been an interesting one for GBP/EUR exchange rates that have been range-bound between €1.42 and €1.43. We have seen the pair test the €1.43 mark several times, but each and every time it has failed to break through, so this could well be the peak:

This is the 5th time this year we’ve seen rates get to around these levels, and each and every time it’s dropped back away. In August when we hit these levels, within a week it had dropped back to €1.36 again. There is of course no way to predict which way the rate will go, however looking at past performance, any clients with Euros to buy may wish to take advantage of the current levels that are close to an 8 year high. It could go higher still of course, but fixing a rate now would allow you to budget and secure a very attractive exchange rate, and protect against a repeat of the trend we’ve seen several times this year when the rate snaps back to the mid €1.30’s. Many of our clients are choosing to make hay while the sun shines, and fix a rate on at least a portion of what they need to buy.

This morning European Central Bank Governor Mario Draghi gave a speech, in which he said that the Economy may need more aid if the recovery is not self-sustaining. This is yet another hint of loosening monetary policy or cutting interest rates next month, and the Euro has weakened further, pushing GBP/EUR to €1.43, but again the pair is hitting resistance at these levels, and failing to break through. In the UK we have Public Sector Borrowing figures, which show the UK deficit. If wider than expected Sterling could weaken.

Written by Adam Bobroff, Director, dedicated dealer for Allez-Français clients at The Foremost Currency Group

Contact Adam on +44 (0)1442 892060

Monday, 16 November 2015

Why you need a personal broker at a time like this

Regular readers of our currency market report will be aware that the currency markets are experiencing exceptionally volatile times. With discussion of interest rates, and a possible extension of the European Central Bank’s (ECB) quantitative easing program grabbing the headlines, focus on economic data, and having a personal broker to translate the jargon has rarely been so imperative.

In the space of just 7 days last week we saw GBP/EUR levels sink to below 1.40, and peak as high as 1.4196.

What caused this movement?

The positive trend for Euro buyers was attributed predominantly to a perceived weakness in the single currency, as a result of a two pronged attack. The week was under way with a speech from ECB president Mari Draghi, in which he began to indicate that the central bank might indeed be willing to cut the base rate even further than the current record low of 0.05%. This insight into the thoughts of the central bank was the cause for an initial rise in rates, and began a trend that was to continue for the remainder of the week.

Alone, you would expect news such as this to create a noticeable movement in the markets, but coupled with the inclusion of a possible extension of the ECB’s quantitative easing program, a doubling up of monetary policy changes resulted in an escalation in the severity of the fluctuations. This was demonstrated during Fridays trading when we saw session swings of over a cent, moving higher, then lower, then higher again, before dropping once more to end the week around 1.4150.


Horror in Paris

Following the atrocities the world witnessed in Paris on Friday evening, it would be expected to see a degree of reaction in the financial markets. The general consensus is, that due to the incident occurring outside of trading hours, any knee jerk reaction has been subdued as the traders and investors have had time to digest the horror. Michael Hewson at CMC Markets expects that “Against such a fragile backdrop, markets generally take the last line of least resistance and given this vulnerability, European trading looks set to follow in Asia’s footsteps and open sharply lower”. However, how long this effect may be due to last is unknown as with “Past experience with terrorist strikes in Europe……financial market impact of even the most severe attacks to be short lived,” said Olivier Adler at Credit Suisse.

Get in touch

With the currency markets being one of the most unpredictable entities known, it is always worth having as many sets of eyes and ears on your side as possible. With our partner / dealers at Foremost Currency Group you will be assigned a dedicated account manager, who will be happy to share their knowledge of the markets with you, and explain all the options and tools at your disposal to help maximise the return on your individual requirement. Ask for Tom Taylor or Adam Bobroff, and quote the Allez-Français Blog to get preferential rates and the very best in service.

Call +44 (0) 1442 892060 or email

Friday, 6 November 2015

Estate Agents Code of Conduct

Estate agents in France are now obliged to operate under a code of ethics that has been enshrined in statute law.

The code is not just about conduct, but is also relates to competences, as there is an obligation to possess the practical & theoretical knowledge necessary, to ensure agents are informed regarding legislative and regulatory developments and to know the market conditions in which they work.

The code is strongly prescriptive about conflicts of interest, requiring agents to ensure that they do not put themselves into a scenario where a conflict of interest arises. This will catch many agents out as often they commercial ties, (typically a partner who is also a builder / plumber / electrian etc. Agents are now required to inform their clients of possible conflicts of interest.

They are also required to communicate with their (vendor) clients on a regular basis about progress on their sale instructions and any problems that they may be experiencing. That will come as a new event for some agents based upon the feedback that we receive from many vendors.

Allez-Français welcomes this development, our team of agents have always upheld the conduct and skills recommended.

Tuesday, 3 November 2015

Mobile phone roaming charges in the EU to be scrapped

Roaming charges, which mean account holders incur extra fees for using their mobile phones in another country, will finally be scrapped after years of debate and negotiation.

Last Tuesday, Members of the European Parliament finally gave the green light to a ban on roaming charges within the EU.

According to the BBC website, an interim cap on charges will take effect from 30 April 2016, prior to the full ban across the EU which is not set to come into force until 15 June 2017.

Monday, 2 November 2015

Unexpected moves in the currency market

A new week brings a new month and unbelievably there are only eight weeks left until Christmas but there is still plenty for the heads of the central banks to ponder before they can look forward to their winter break.

Last week brought some unexpected moves in the currency market which saw the pound climb back over 1.40 against the single currency. The U.S Federal Reserve interest rate decision on Wednesday evening didn’t spring any major surprises but did lead to GBP/EUR receiving an unexpected boost. Then on Friday afternoon, rather unexpectedly, the pound went a run which saw the currency pair break through the €1.40 barrier for the first time since August, reaching a high of 1.4023.

With a rate hike from the U.S. central back still firmly on the cards in December, investors pulled out of riskier assets and headed into the dollar leaving the pound to take full advantage. However, the euro did manage to claw back some of the ground on Friday morning after some positive eco-stats from the euro-bloc. The unemployment rate in the Eurozone fell to 10.8% while Italian unemployment fell 0.1% to 11.8%. The releases helped the euro gain across the board which briefly saw GBP/EUR dip back below 1.39 to a low of 1.3891.

Glimmer of hope for the ECB

On top of the positive unemployment figures there was also some good news regarding the Eurozone’s inflation figure. Statistics agency Eurostat announced inflation in the euro-bloc had returned to zero in October ticking up from -0.1% in September. According to Eurostat estimates price growth in alcohol, tobacco and food increased but warned energy prices were still considerably lower than this time last year. Although the figures released by Eurostat are only an early flash estimate the inflation reading will give the European Central Bank a small boost following Mario Draghi’s comments two weeks ago. In ECB’s last statement Mario Draghi suggested the central bank could be prepared to extend their extravagant stimulus programme in December because of the Eurozone’s current inflation level. With a small rise in inflation and unemployment falling could we see the ECB hold off from implementing more quantitative easing (QE) until the New Year? Only time will tell but if the ECB don’t expand their stimulus programme in December the euro could start to claw back some of the losses it has sustained over the past few weeks.

Are you looking to purchase euros?

Friday’s gains means the pound has now recovered virtually recovered all the ground it lost last month. The currency pair has risen almost 5% from the low of 1.3387 we witnessed on the 13th October, which means converting £250,000 today will net you nearly €16,000 more than three weeks ago.

If you are looking to buy or sell euros in the coming months and want to ensure you are making the most from you transfer contact our dedicated currency brokers today for a no-obligation consultation. As experts in foreign exchange they can help you achieve a rate of exchange up to 5% better than those offered by the high-street banks, while at the same time help protect you from any potential adverse market movements.

One of the most important actions that a buyer / seller has to undertake is to use a specialist currency broker, rather than a bank when sending money to or from France.   Foremost Currency have been the dedicated and preferred brokers for Allez-Français clients for over 10 years now, and we have known Robin & Adam on a personal level for around 15 years. They secure preferential rates for our clients, and we can testify that they get the money to the right place at the right time. (Not all companies or banks manage that we can assure you). We see Foremost Currency as an integral business partner, and we share a common goal, to provide our clients with excellent levels of service.
For more information, contact : Adam Bobroff 01442 892060