Every guide to buying property abroad says the same thing about currency: fix your rate with a forward contract so you know what the place costs in pounds. That is good advice and it is where the advice stops. What almost nobody tells you is what happens when the sale funding it does not complete...
Every guide to buying property abroad says the same thing about currency: fix your rate with a forward contract so you know what the place costs in pounds. That is good advice and it is where the advice stops.
What almost nobody tells you is what happens when the sale funding it does not complete on the day it was supposed to. In England it frequently does not, and if you are selling in London the sums involved make the consequences larger than anywhere else in the country.
A forward contract is an agreement to buy currency at today's rate for delivery on a future date, usually secured with a deposit of part of the amount. Agree a rate in March for settlement in June and the June rate is the March rate, whatever has happened in between. That is the certainty people buy, and for a fixed, known payment date it works exactly as advertised.
An English property chain is not a fixed, known payment date. Exchange and completion are separate events, nothing is binding until exchange, and a buyer four links down can withdraw the week before with no penalty. The date in your forward contract came from a conveyancer's estimate. The date your money actually arrives comes from whoever is weakest in the chain.
So you have a dated obligation funded by an undated event. That is the whole problem, and it is specific to selling in England and Wales.
You do not lose the contract. You roll it, which means the expiring contract is closed out and a new one opened at the current market rate for a later date.
Here is the part that matters. Closing out the old contract crystallises whatever the rate has done since you booked it, and that difference is charged to you or refunded to you. It does not disappear because you are extending rather than walking away.
Work it through. You agree a forward at 1.17 euros to the pound to buy a house in Spain. Completion slips six weeks. By then the rate is 1.13. Rolling the contract means settling the difference on the original at the worse rate, then starting again at 1.13 for the new date. The protection you bought covered you up to the original date and no further.
If the rate has moved the other way, the difference comes back to you. It is not a penalty. It is simply that a forward contract protects a date, and you have changed the date.
The mechanism is the same everywhere. The scale is not.
A London sale funding an overseas purchase is usually a larger sum than the same transaction anywhere else in Britain, and every one of these movements is a percentage of the amount. Two per cent on a Midlands sale and two per cent on a London sale are the same percentage and very different numbers. The London chain is also frequently longer and more likely to involve a leasehold flat, where a management pack or a freeholder's response can add weeks that nobody planned for.
The result is that the people most exposed to a forward contract dating problem are exactly the people most likely to be told to use one.
Ask for a window forward rather than a fixed date one.
A window forward lets you draw the currency down at any point within a range of dates rather than on one specific day. If your completion moves from the 14th to the 28th, and the 28th is inside your window, nothing happens: no close out, no crystallised difference, no new contract. You simply settle later.
The window costs a little more than a fixed date contract, because the provider is giving you optionality and optionality has a price. Against the cost of rolling a large contract through an adverse move, it is cheap. It is also the thing to ask for before you agree anything, because converting a fixed contract into a flexible one after the fact means rolling it, which is the event you were trying to avoid.
Is this a fixed date or a window contract, and how wide is the window? If the answer is a single date, ask what the window version costs. Compare the two prices against the size of your transfer, not in the abstract.
What does it cost me to extend, and how is the difference calculated? You want to hear that the expiring contract is closed out at market and the difference settled. If you hear that extending is free, ask the question again differently, because it is not.
What deposit do you need, and can you call for more? Forward contracts are usually secured by a deposit, and a provider can ask for more if the rate moves far enough against the position. Find out the terms while you are deciding rather than when the call comes.
What happens if the sale falls through entirely? Not delayed. Collapsed. You still owe the contract, and closing it out means settling the movement. Know that number's shape before you sign, not after.
Can I part draw? Deposits abroad are often paid weeks before the balance. A contract you can draw in stages fits the actual payment schedule of a property purchase better than one settled in a single lump.
Exchange on your London sale before you fix a large forward, if you possibly can. Before exchange you have no date worth protecting, only a hope. After exchange the completion date is contractual, which is exactly the thing a forward contract is designed to sit against.
Where the purchase abroad forces your hand earlier, which happens with off plan and with reservation deposits, use a window wide enough to cover a realistic slip rather than an optimistic one. Ask your conveyancer how long the chain is and add to it. Nobody has ever regretted a window that was too wide.
The detail of how transfers are priced, and what to check before sending money to anyone, is on our currency exchange page. If you are buying in the eurozone, the countries outside it work differently again.
You extend it, which means the expiring contract is closed out and a new one opened at the current rate for a later date. Closing out settles whatever the rate has done since you booked, so the movement is crystallised rather than cancelled. If it moved against you, you pay that difference. If it moved in your favour, it comes back.
Yes, though not always as a fee. The cost is the rate movement on the contract being closed out, and on a large sum that is the number that matters rather than any charge. If a provider tells you extending is free, ask specifically how the difference on the expiring contract is settled.
A forward contract you can draw down at any point within a range of dates rather than on one fixed day. If your completion slips from the 14th to the 28th and both fall inside the window, nothing is closed out and nothing is crystallised. It costs a little more at the outset, and it has to be chosen at the start.
Where you can avoid it, yes, wait. Before exchange you have no contractual date, only an expectation, and a forward contract is designed to sit against a date. After exchange the completion date is binding, which is what makes the protection worth what you paid for it.
The contract does not fall through with it. You still hold the obligation, and closing it out means settling the rate movement. This is the case worth asking about before you sign rather than after, because it is the one nobody expects and the one where a wide window does not help you.
Rates and mechanics in this article were checked in September 2026. Nothing here is financial advice. Forward contracts are agreements with real obligations, and the terms differ between providers, so read the ones you are actually being offered.