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The strong pound hits overseas property investors

The UK has always been a hotbed of property investors with many looking overseas to acquire "cheap property" in emerging markets. However, as we covered last week, the UK pound has come under significant pressure due in the main to various comments from the Bank of England and the cost of assets overseas has increased for many people. So what can you do to protect yourself?

Many people are starting to look at the subject of forward contracts which allow you to fix the exchange rate at which you acquire your foreign currency thereby giving you some stability as and when you go ahead with your overseas purchase. When you consider that the exchange rate between the UK pound and the US dollar has fluctuated by 30% over the last two years, there are potentially substantial benefits to fixing your currency rate when talking about investments which could cost hundreds of thousands of pounds.

Obviously there is a risk that the exchange rate may move against you in the future if you do fix your currency rate, but at least this gives you some stability when acquiring an overseas asset, something which is ever more vital in the current marketplace.

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