A Gulf buyer who agrees to pay £1,000,000 for a London flat has agreed a sum in dirhams or riyals that is unknown until the money is converted. Between offer and completion, eight to twelve weeks on a completed flat and years off-plan, sterling can move 5 per cent against the dollar: £50,000 on the price. Moving dirhams and riyals into sterling is a dollar decision, and leaving it to completion morning is the costly one.
Finance
Moving dirhams and riyals into sterling for a London purchase: timing, forward contracts and who to use
Why Gulf buyers of London property face a dollar-sterling decision
The Gulf currencies are fixed to the US dollar, so a Gulf buyer is converting dollars into sterling and the rate that matters is GBP/USD. A buyer who has exchanged contracts should fix the rate with a forward contract, on a 5 to 10 per cent deposit, through a broker regulated by the Financial Conduct Authority. A broker quotes 0.3 to 0.6 per cent from interbank against a Gulf bank’s 1 to 2 per cent: about £12,500 saved on a £1,000,000 purchase. The catch is an unhedged 2 per cent move between exchange and completion, £22,600 for or against.
The dirham (3.6725), the Saudi riyal (3.75), the Qatari riyal (3.64), the Bahraini dinar (0.376) and the Omani rial (0.3845) are fixed to the US dollar; the Kuwaiti dinar is fixed to a basket in which the dollar dominates. A Gulf buyer therefore converts, in effect, dollars into sterling, and the rate that matters is GBP/USD.
Where sterling has traded against the dollar since 2016
Sterling has traded between about 1.07 and 1.42 against the dollar since 2016, and most of the time between 1.20 and 1.35; at 1.20 a £1,000,000 flat costs about AED 4.4 million, at 1.35 about AED 4.96 million. A Gulf buyer should think of London prices in dollars, and should notice that in dollar terms prime London has been cheap by its own history for most of the last decade, which is the argument our London or Dubai comparison makes.
Spot or forward contract: how each converts your money
A spot conversion exchanges the money at today’s rate, for settlement in two days. A forward contract fixes today’s rate for a date in the future, usually with a deposit of 5 to 10 per cent of the sum, and settles the balance on that date; the rate is today’s spot adjusted for the interest-rate difference between the two currencies, so it is not a forecast and not a bet.
Fixing the sterling price on exchange day with a forward
A buyer who exchanges contracts on a flat in October for completion in December, and who has the money in dirhams, can fix the sterling cost on exchange day with a forward and know the price in dirhams to the fil. A buyer who leaves the money in dirhams until completion is carrying the risk, and may gain or lose. The firm’s rule is that a buyer who has decided to buy has decided the price, and should fix it; the purchase is a property decision, not a currency position.
Currency forwards for off-plan purchases and staged payments
An off-plan buyer with staged payments can take a series of forwards or an option-based structure from a broker, and should, because two years is a long time in currency.
Gulf bank or currency broker: which costs less?
A Gulf bank’s retail exchange rate for a large transfer is commonly 1 to 2 per cent from the interbank rate, and the bank will charge a transfer fee on top; a specialist currency broker regulated by the Financial Conduct Authority quotes 0.3 to 0.6 per cent from interbank on a sum of this size, with no transfer fee, and offers the forward.
How the currency broker route works for a London purchase
The broker receives the dirhams or riyals into its segregated client account, converts, and pays the sterling to the solicitor’s client account; the money never sits in the buyer’s own UK account, which is why a UK account is not needed to buy, as our guide on opening a UK bank account explains.
Protections to check when choosing a currency broker
The protections to check: FCA authorisation as a payment institution with safeguarded client funds, a named dealer, a written confirmation of each trade, and payment direct to the solicitor rather than to any intermediary. The larger brokers have Dubai offices and Gulf-registered entities, which simplifies the Gulf bank’s own checks on the outgoing transfer.
What an unhedged currency move costs on a purchase
What the choice of route and the unhedged risk come to on a typical purchase:
Cost of converting on a £1,000,000 purchase
| On a £1,000,000 purchase with £130,000 of costs | Cost or saving |
|---|---|
| Bank at 1.5 per cent from interbank | about £17,000 |
| Broker at 0.4 per cent | about £4,500 |
| Difference | about £12,500, the survey and most of the solicitor |
| Sterling moves 2 per cent against the dollar between exchange and completion, unhedged | £22,600 for or against the buyer |
| Sterling moves 5 per cent over a two-year off-plan build, unhedged | £56,500 for or against |
Source: firm’s calculation at indicative bank and broker margins, October 2026.
The first two rows are certain; the last two are the risk a forward removes.
Timing the currency conversion for deposit and completion
The deposit on exchange, usually 10 per cent, must be in the solicitor’s account before exchange, so that sum is converted first, spot or by an early forward. The balance is due on completion, and a forward fixed on exchange day for the completion date settles it.
Off-plan payment schedules and avoiding conversion on completion morning
For an off-plan purchase, the reservation fee and the exchange deposit are converted at the start, and the staged payments and the completion balance are hedged with forwards dated to the developer’s schedule, with the understanding that completion dates slip and forwards can be rolled at a cost. A buyer should never leave the completion balance to be converted on completion morning; a late payment because a Gulf bank held the transfer for checks is a breach of contract with interest and, at worst, loss of the deposit.
Proving the money trail from your account to the solicitor
Whichever route the money takes, the solicitor’s anti-money-laundering obligations require it to be traceable from the buyer’s own account to the solicitor’s. A broker’s trade confirmation and settlement statement, showing the dirhams received from the buyer’s named account and the sterling paid to the solicitor, is the trail; a transfer that passes through a friend’s account, a company account not the buyer’s, or an exchange house in cash is not, and will stop the purchase.
Gulf bank checks on large outgoing transfers for property
The Gulf bank will also want the purchase contract and the solicitor’s details for its own outgoing checks, and may take days for a large sum; start the transfer of the deposit as soon as the offer is accepted, not when the solicitor asks. Our guide on anti-money-laundering checks sets out the full list, and our guide on moving money from the Gulf to buy UK property covers the mechanics of the transfer and the proof of funds.
Our view
Fix the rate when the price is fixed. Use an FCA-regulated broker with a Gulf office, pay the deposit on the forward, and have the sterling go straight to the solicitor. Treat the 1 per cent saved against the bank as the survey paid for, and the forward as the insurance that the flat costs what the family agreed it would cost. A buyer who wants to take a view on sterling should do it with money that is not the completion balance.
Sources: Financial Services Register (FCA) · Safeguarding client funds: payment and e-money institutions (FCA) · Money laundering regulations: your responsibilities (GOV.UK) Figures verified 14 October 2026.
Frequently Asked
Questions about moving dirhams and riyals into sterling
If the flat is right, no; the rate can move either way and the flat may go. Fix the price in your currency on exchange and stop watching the screen.
Views differ; a conventional forward involves a deferred exchange of currencies, which many scholars treat as impermissible, while some brokers offer structures reviewed by a Sharia board. A buyer who wants Sharia compliance should ask the broker for its board’s opinion or convert spot at exchange.
No. The contract is in sterling and completion is in sterling through the solicitors; the conversion is the buyer’s.
A forward fixes today’s rate for a date in the future, usually against a deposit of 5 to 10 per cent of the sum, with the balance settled on that date. The rate is today’s spot adjusted for the interest-rate difference between the two currencies, so it is not a forecast and not a bet. A buyer who exchanges in October for completion in December can know the price in dirhams to the fil.
A Gulf bank’s retail rate on a large transfer is commonly 1 to 2 per cent from interbank plus a transfer fee; an FCA-regulated broker quotes 0.3 to 0.6 per cent with no fee. On a £1,000,000 purchase with £130,000 of costs, a bank at 1.5 per cent costs about £17,000 and a broker at 0.4 per cent about £4,500: a difference of about £12,500.
No. The broker receives the dirhams or riyals into its segregated client account, converts, and pays the sterling direct to the solicitor’s client account; the money never sits in the buyer’s own UK account. Our guide on opening a UK bank account explains when one is useful anyway.
Check FCA authorisation as a payment institution with safeguarded client funds, a named dealer, a written confirmation of each trade, and payment direct to the solicitor rather than to any intermediary. The larger brokers have Dubai offices and Gulf-registered entities, which simplifies the Gulf bank’s own checks on the outgoing transfer.
On a £1,000,000 purchase with £130,000 of costs, a 2 per cent move in sterling between exchange and completion is £22,600 for or against the buyer, and a 5 per cent move over a two-year off-plan build is £56,500. Sterling has traded between about 1.07 and 1.42 against the dollar since 2016. A forward removes that risk.
First, and early. The deposit on exchange, usually 10 per cent, must be in the solicitor’s account before exchange, so it is converted spot or by an early forward. Start the transfer as soon as the offer is accepted, because the Gulf bank will want the purchase contract and the solicitor’s details and may take days on a large sum.
A late payment because a Gulf bank held the transfer for checks is a breach of contract, with interest and, at worst, loss of the deposit. A buyer should never leave the completion balance to be converted on completion morning; a forward fixed on exchange day for the completion date settles it in time.
