Buying off-plan abroad means paying in instalments over one to three years, so the sterling cost of every stage moves with the exchange rate between now and completion. A forward contract lets a UK buyer fix the rate for future instalments in advance, turning an uncertain foreign-currency price into a known sterling budget.
What is off-plan property and why does currency matter more than for a resale?
Off-plan property is a home bought before it is built, paid for in stages tied to construction milestones rather than in a single completion payment. A buyer typically pays a reservation fee, then an exchange deposit, then a series of instalments as the development reaches each stage, with a final balance on handover.
For a completed resale property, a UK buyer converts sterling once or twice over a few weeks. For off-plan, the same buyer converts repeatedly across a build that can run two or three years. Each conversion happens at whatever the rate is on the day, so the total sterling cost is not known when the reservation is signed. The exchange rate, not the developer, decides how much the later stages cost in pounds.
GBP/EUR is driven largely by the interest-rate differential between the Bank of England and the European Central Bank. When that gap shifts, so does the rate, and a build long enough to span several policy meetings will almost certainly span several rate moves. You can read the current outlook on our pound to euro forecast.
How do staged instalment payments expose you to exchange-rate risk?
The risk is timing. You agree a price in euros, dirhams or another currency at reservation, but you pay for it in pieces over years. If sterling weakens against that currency between stages, every remaining instalment costs more in pounds than you first budgeted.
This is different from the risk on a resale, where the gap between agreeing a price and paying is short. On an off-plan plan, a modest currency move that would barely register on a quick purchase is applied again and again across the whole payment schedule. A buyer who ignores it is effectively taking a multi-year currency position on top of a property purchase. Our guide on whether to lock in a rate now or wait explains the trade-off in more detail.
Worked example: how much can the exchange rate change an off-plan purchase?
Consider a UK buyer purchasing an off-plan apartment priced at €500,000, paid in four stages of €125,000 over roughly two years.
- At an illustrative rate of 1.17, each €125,000 stage costs about £106,838, and the full €500k costs about £427,350.
- If sterling weakens to an illustrative 1.10 by the later stages, those instalments cost about £113,636 each — and the total climbs to roughly £454,545.
- That is a difference of about £27,000 on the same apartment, caused entirely by the rate rather than the price.
A move of that size over two years is well within normal ranges for GBP/EUR. The figures are illustrative, but the mechanism is real: on a large multi-stage purchase, a few cents on the rate is worth tens of thousands of pounds. You can check live pricing on our currency converter.
How can a forward contract fix the rate for future instalments?
A forward contract lets you agree an exchange rate today for currency you will need later, usually up to 12 months ahead, by paying a deposit and settling the balance when each payment falls due. For an off-plan buyer, it converts a schedule of uncertain future instalments into fixed sterling amounts you can budget against.
In practice, a buyer can fix the rate for the instalments due within the forward window, so the developer’s payment schedule and the currency plan line up. As stages fall outside the 12-month horizon, they can be addressed closer to the time. Our explainer on how forward contracts work and the guide to fixing an exchange rate for a future payment cover the mechanics.
Forward contract vs paying at spot vs a foreign-currency mortgage: which suits a payment plan?
| Approach | How it works | Best suited to | Trade-off |
|---|---|---|---|
| Pay each stage at spot | Convert on the day each instalment is due, at the live rate | Short builds, or buyers comfortable with the rate moving | The sterling cost is unknown until the final stage is paid |
| Forward contract | Fix today’s rate for instalments due within the forward window | Multi-stage plans where budget certainty matters | You commit to the fixed rate even if the market later moves in your favour |
| Foreign-currency mortgage | Borrow in the property’s currency, reducing the sterling sum to convert up front | Buyers financing part of the purchase locally | Repayments in a foreign currency carry their own ongoing exchange risk |
Many buyers combine approaches: a forward contract for the near-term instalments and a decision on financing for the balance. Our international mortgage and cross-border finance guide looks at the borrowing side, while the guide to transferring large amounts covers moving the money itself.
How are off-plan deposits protected in Spain, Portugal and Dubai?
Currency planning sits alongside deposit protection, and the rules differ by country. In Spain, developers must secure off-plan buyer payments through a bank guarantee or insurance policy under Law 57/1968, a protection reaffirmed and modernised by Law 20/2015. In Dubai, developer sales proceeds for off-plan units must be paid into a project escrow account regulated under Law No. 8 of 2007 and overseen by the Real Estate Regulatory Agency (RERA), with funds released against verified construction progress.
These frameworks protect the money once it reaches the developer’s regulated account, but they do not protect the exchange rate you convert at, nor the route the funds travel. Confirming where each instalment must be paid, and fixing the rate for it, are separate steps a buyer still controls. Country-specific detail sits in our guides to buying property in Dubai, buying in Portugal and buying in Turkey.
What currency mistakes do off-plan buyers make most often?
- Budgeting the whole purchase at today’s rate. The reservation-day rate rarely survives a two-year build, so a budget built on it can drift by tens of thousands of pounds.
- Converting large sums in a rush near each deadline. Leaving the currency to the last day removes any ability to plan and can force a conversion at an unfavourable moment.
- Assuming the developer’s currency is fixed for you. Some plans quote in one currency but settle in another; the settlement currency is what determines your exchange risk.
- Overlooking the AED peg. The dirham is pegged to the US dollar at 3.6725, so a GBP/AED cost effectively tracks GBP/USD — a different driver from a euro purchase.
- Ignoring the running costs to come. Service charges and taxes after handover are recurring foreign-currency payments; our guide to paying overseas property running costs covers them.
How does a specialist currency broker help with a staged payment plan?
A specialist maps the developer’s payment schedule against a currency plan, so each instalment has a known sterling cost and a clear route. That can involve fixing the rate for near-term stages with a forward contract, setting target rates for stages further out, and timing each transfer to the construction milestones.
Cambridge Currencies is a UK specialist currency broker that supports overseas property buyers with large, multi-stage payments. Funds are safeguarded by our FCA-authorised partners Currencycloud and ScioPay, and every transaction is completed by phone with a dedicated specialist who knows your purchase, rather than through an app. That personal handling matters most when the sums are large and the schedule runs for years.
Frequently asked questions
Can I fix the exchange rate for the whole off-plan payment plan at once?
You can fix instalments that fall within the forward window, which is usually up to 12 months ahead. Stages due beyond that can be planned closer to the time, so a long build is often handled as a rolling series of forward contracts rather than a single one.
What happens to my forward contract if the development is delayed?
Construction delays are common on off-plan projects. A forward contract is tied to a settlement date, so if a milestone slips, the timing can usually be discussed with your broker. Planning for possible delay when the contract is arranged is sensible, and a specialist can talk through the options.
Is currency risk on off-plan bigger than on a completed property?
Generally the exposure lasts far longer. A completed purchase converts over weeks; an off-plan plan converts over years, so there is more time for the rate to move and more separate payments affected by it.
Which currencies are most relevant for UK off-plan buyers?
The euro dominates for Spain, Portugal, Greece and Cyprus; the dirham for Dubai, which is pegged to the US dollar; and the lira for Turkey. Each has a different driver, so the right plan depends on the country. You can compare live pricing on the currency converter.
How do I actually send each instalment abroad?
Each stage is sent as an international transfer to the developer’s designated account, ideally the regulated escrow or guaranteed account for the project. Confirming the beneficiary details for every payment is important, and the process is set out in our guide to sending money from the UK to the UAE.
Does a foreign-currency mortgage remove the exchange risk?
It changes it rather than removing it. Borrowing locally reduces the sterling sum you convert up front, but the ongoing repayments are then in a foreign currency, which carries its own exchange risk over the life of the loan.
Plan the currency side of your off-plan purchase
If you are buying off-plan and want the sterling cost of each stage to be predictable, speak to a Cambridge Currencies specialist about matching a currency plan to your developer’s payment schedule. You can request a quote to start the conversation, and every transfer is arranged by phone with a specialist who follows your purchase from reservation to handover.
