Grand Designs

Pity no-one advised them to hedge against the Euro ...

Reply to
Huge
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Indeed ... given the sums involved, I'm sure that they could have arranged a forward deal based on the exchange rate at time of contract (for a fee, of course, but presumably a lot less than the £45K implied in the programme).

Apart from that, a good 1hr infomercial for Huf Haus! Given that there was none of the usual "... and, with only one week to go, the roofing timbers are still in Albania ..." problems that normally enliven Grand Designs, a little more background info would have been nice; for example, did they have any issues wrt to planning permission, building regs., etc. I've certainly had experience of planning officers and BCOs whose immediate response would have been "you can't build that foreign thing here".

Overall, I was seriously impressed by the results: not entirely to my personal tastes, but the result was infinitely preferable to the miles of "period style executive homes" that blight so much of the home counties. The efficiency of the build was something to behold -- will the construction industy in this country *ever* learn that this is possible, rather than the usual three blokes in a rusting transit who turn up 3 hours late (if you're lucky) and spend the next hour taking a tea break while reading the Racing Post ...?

Julian

Reply to
Julian Fowler

I am sure I heard Kevin say the Euro had gone down in his intro to the subject.... or was that my imagination?

Reply to
John Rumm

Yes, he got it wrong, and it didn't make sense.

Reply to
Grunff

Huge, the banks always win.

IME experience of buying currency forward it's expensive, there's a hefty premium on it, it's inflexible, and in our case ended up in us paying more in bank charges because we had an amount left over at the end of the contract so we had to make an additional payment earlier than we would have chosen to do.

DG

Reply to
derek

They have very well paid actuaries to ensure they make a profit whatever happens.

Christian.

Reply to
Christian McArdle

No, it wasn't. He got it the wrong way round.

Reply to
Huge

Since the programme said that the clients were funding the build from savings, they could simply have opened a euro bank account and deposited the money there ...

Reply to
Julian Fowler

On second thought, all they needed to do was open a euro denominated bank account at the time of placing the order and transfer the funds into it.

Quite. Not that I mind.

Agreed, on both counts.

Reply to
Huge

Not necessarily. That's why they lose money. Besides, these people could have bought a futures contract from IGIndex or Cantors.

Or even just opened a euro denominated account and done all the currency transactions at one go.

Reply to
Huge

This is untrue.

Reply to
Huge

Shame they had to pull their old house down. If this one only lasts 40 years too then it is costing £11K/year. Sounds a lot when you think about it...

Colin

Reply to
Colin

That is exactly what I thought during the program too. Especially as the total cost of the build (in Euros) was known from the start.

-- David C

Reply to
David C

All depends which direction you bet the markets are going to move. If the euro had actually lost value, this way would have been bad news.

Chris

Reply to
Chris J Dixon

Why? I thought it was a fixed price contract.

Reply to
No-one

It was but the price was fixed in euros so if sterling moves against the euro then the value they have to pay in sterling will change.

Reply to
Tony Hogarty

But if they moved the money into a Euro account at the start the value in Euros wouldn't change. So they wouldn't have been short of money when payment time came.

-- David C

Reply to
David C

But the down side of this is that they forfeit the chance of paying less.

Chris

Reply to
Chris J Dixon

And end up paying ten per cent more !!

Reply to
No-one

Exactly. They took a gamble either deliberately or through ignorance and unfortunately they lost.

Reply to
Tony Hogarty

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