You Could Buy a Home in Bulgaria for ?5,000. But A

By Sebastian O'Kelly

May 29, 2005,The Mail on Sunday

Whenever the Turks went on one of their episodic rampages through the Balkan countryside, the bells of Bulgaria's secluded monasteries would toll in warning. These days they should sound again – not to alert the locals, but to warn the invaders: property-buying Britons eager to snap up a bargain in one of the poorest countries in Eastern Europe.

Since the beginning of the year, Bulgaria has been the star turn at property shows, heralded as "the new big thing" with prices rising by anything between 25 and 100 per cent a year. Salesmen – a few recently laid off in Spain – man the crowded stalls, and seminars held by dubious experts draw in awed "investors" – if that term isn't a misnomer.

The pitch goes something like this: first – and foremost – there was Spain, but it's now too pricey; then came the surge of interest in rural France, where property has rocketed; Croatia has been rediscovered over the past 18 months; this year a punt on Bulgaria is a one-way bet. But does this ring true?

There is one reason for the British stampede into Bulgarian property: it is cheap. Very, very cheap. But Bulgaria is also very, very poor. Take any economic index in Europe and you'll find Bulgaria at the bottom, a notch or two up from Albania, which even estate agents might find hard to describe as a neglected jewel.

But there is a fundamental weakness to the Bulgarian property market that distinguishes it from other holidayhome hotspots such as southern Spain, rural France, Portugal, Florida, South Africa or central Italy – only the British are buying there.

Buyers may not think they are spending very much for a flat by the Black Sea or in a ski resort, but they're paying far more than the locals can afford. Labourers working on building sites, or driving a horse and cart laden with cement, are lucky to earn £200 a month, while the site foreman earns about £500.

This means that there are no potential buyers for your bargain £30,000 beachside Bulgarian apartment except for other Brits like you. With UK consumer confidence in free fall and the British domestic property market heading south, it may be a very long time before that £30,000 investment in Bulgaria comes good.

The Black Sea resort of Sunny Beach – named for the grisly Communist nomenklatura who holidayed there – is where the Bulgarian property boom is most obvious. Behind the beach hotels last weekend, thousands of labourers were hurling up apartment blocks and hotels, many of dismal quality. Most holidaymakers around the hotel pools were German, but only the British are targeted by the property touts who crowd the resort's main streets.

Bob and Carol Ellis, in their 70s and from Oxford who were staying at the Rui Hotel, were unimpressed. They paid £1,000 for a fortnight's halfboard holiday at Sunny Beach, flying to Burgas from Birmingham.

It was a bargain, they liked the locals and the hotel, but they would not be buying a holiday home there. "It's too tatty, and watching this development going on reminds me of children playing with a Lego set," says Carol.

The other drawback is Bulgaria's uncompromising continental climate. Sunny Beach is certainly not sunny all year round and inland temperatures of –20C are common.

At the end of May, a strong wind whips up clouds of dust from the building sites, the beach is deserted and the sea is far too cold to swim in. "If we buy a home abroad we would want to use it all year round, so we would prefer Portugal," says Carol.

This is certainly not to deny that Bulgaria has its attractions. The rolling green countryside is stunning and almost empty compared with Western Europe. The cuisine of grilled meats and fish, with salads and yoghurt and good wines is simple and wholesome.

Modern Bulgaria emerged in the 1870s from appalling misrule by the Ottoman Empire, whose massacres were denounced by Gladstone (several streets honour his name).

It is the size of England but has only 8.9million inhabitants. Most are Orthodox Christian Slavs, with kinship to Russians and Serbs, but there is also a 13 per cent minority Turkish Muslim population and an impoverished and marginalised 500,000 "Roma" gypsies. Some Britons are investing in the country for the long term. Rupert Ferard, 38, a wealthy property developer from Stocktonon- Tees, linked up with Sofia hotelier Andrey Andreev, 49, and his Britisheducated son George, 25, to build a quality development of 547 units called Garden Of Eden, three miles from Sunny Beach at St Vlas.

On a hillside above its own beach, with a stream and gardens down to the sea, this is probably the Black Sea's most expensive development.

"Sunny Beach is a mass-market destination and pretty tacky right now, but we aim to build something of quality," says Ferard. "These are the kind of properties that are still selling on the Costa del Sol, while the cheaper stuff stays on the market."

The aim is to create a selfsufficient, carless resort, with a 70- bed hotel. Prices range from £30,000 for a studio flat to £101,000 for a penthouse which is far more than the cheaper apartments at Sunny Beach.

Since marketing began in January, 270 units have sold, but apart from a couple of Russians, all are British or Irish buyers.

The skiing resort of Bansko is Bulgaria's other property hotspot, where British buyers are piling in. On offer are flats in speculative blocks, thrown up without thoughtful planning. Simply Bulgaria, set up by Bulgarian-born but British-educated Mino Wallace, 26, and his fiancee Camilla Bryer, 21, from Kent, have sold 20 properties in the budget resort since April. Most were bought unseen at UK property shows.

"Buying off-plan is a leap of faith," says Bradley Kindell, 36, an IT sales director from Kent, who bought two one-bedroom apartments for less than £40,000 each. He plans to use them for family skiing holidays with his wife Jayne and baby daughter Mia. "We encourage people to come out before buying and we can hand-hold them with our local knowledge," says Camilla. "But some buyers are just rushing in."

The attractions of Veliko Tornavo, ancient capital of the Bulgarian kings, and surrounding countryside, are more obvious than an out-of-season ski town or brash beach resort. Le Corbusier, the architect, raved about the town's "organic architecture", and over the past three years a sizeable British community has arisen, echoing the rural idylls of Chiantishire and the Dordogne.

The pioneers here are two ex-town planners – Stephen Lambert, 39, and Andy Anderson, 40 – who came to Bulgaria seven years ago to work on the EU-funded Beautiful Bulgaria Project. After restoring Veliko Tarnovo's historic buildings, they stayed on, married Bulgarians and set up the Stara Planina estate agency. They now have 30 employees and their business is the most respected agency selling rural and village properties in Bulgaria. They sold seven properties in 2001, 20 in 2002, 100 a year later and 200 last year.

"It is a big commitment selling a house in a village to a British family and we want to make sure it all goes well," says Lambert. "The last thing I want is people knocking on my door complaining they were misled."

Prices range from £5,000 for a village hovel with an acre of land but no running water, to £100,000 for a restoration of a typical Balkan house in Veliko Tarnovo.

Retired lecturers and intellectual types have bought holiday homes, while the permanent British population are the same kind of artistically inclined slackers and dreamers who moved to Tuscany a generation ago.

But unlike the "investors" taking a punt on new-build in Sunny Beach, they are the only British homeowners who integrate into Bulgarian society and learn the language.

"There is no resentment towards the British among locals," says Irina Punova, who heads the Ruse office of Stara Planina. "They bring new life, a different culture and are well liked."

Irina, who has sold 11 rural properties since February, tries to discourage British buyers from buying homes they have seen only on the internet, thinking they are so cheap they can't go wrong. "I keep saying you must see the country first," she says.

Unlike the speculative, solely British-driven property market in the resorts, sales of existing townhouses and country properties by Stara Planina have a connection with the local economy. "Since the beginning of the year I have been gazumped twice for houses in Veliko Tarnovo – by Bulgarians," Lambert complains. It may be little comfort, but that's the best possible sign of a healthy property market.