Discover the value of the east

Now that it has joined the EU, Poland is a great prospect for canny UK buyers, says Graham Norwood
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The Independent Online

The surge of Britons buying in Eastern Europe has so far been concentrated on Bulgaria and Croatia, but the area's largest country, Poland, is about to enter the arena.

The surge of Britons buying in Eastern Europe has so far been concentrated on Bulgaria and Croatia, but the area's largest country, Poland, is about to enter the arena.

It has a rich variety of architecture, from Gothic 17th- and 18th-century buildings in the historic university city of Krakow, to reconstructed classical edifices in Warsaw; Communist monoliths; and ski lodges and modern flats in the Tatra mountains.

There have been close ties between Poland and Britain since the 18th century, when Polish Protestants arrived here as religious refugees. During the Second World War, some 20,000 Polish soldiers and airmen were based in London and the Home Counties. Many remained, and their descendants have established firm roots.

Now, the Polish property market believes that it can attract British buyers in return. Until EU membership last summer, it was almost impossible to win government approval to buy, but in theory, any EU citizen can purchase a home. "It's still bureaucratic, so you need to know what you're doing," advises Wlodek Laskowski, a Krakow-based property consultant. "Non-Polish EU citizens can buy an apartment without complication, but if you buy a house with land you need permits from the interior ministry.

"These are issued quickly to buyers with Polish ancestors, but aren't always granted to foreigners with no connection to the country. If you just want a holiday home or an investment property, it's less complicated to buy a flat," he says.

One other rare but real problem for buyers of pre-1939 homes is establishing exact ownership. Some Jewish families and relatives of Holocaust victims can lay claim to a property if they can provide evidence that it was in their ancestors' possession and confiscated by Nazi occupiers. This rarely affects apartments but several instances of families reclaiming townhouses still occur each year.

"The apartments that foreign investors buy, mainly in city centres, tend to be much more expensive per square metre than same-size properties elsewhere. Even so, they are still cheap by western-European standards," says Laskowski.

Main property hotspots include Warsaw, where it is still possible to get a studio for €70,000, although prices escalate steeply for larger flats in central areas such as the Old Town. The northern port of Gdansk is also popular, although agents say that prices fell back there in 2004, after a surge of investment buyers created artificially high values.

The southern medieval city of Krakow - which, unlike much of urban Poland, escaped substantial damage during the Second World War - is considered by many to be the best-value location in the country, with prices less than 50 per cent those is Warsaw. A six-bedroom 1980s house in the town of Nowy Wisnicz, about 35km from Krakow, is €83,000 (through Polish Property Brokers on 0048 756 464 050). In central Krakow, a three-bedroom apartment in a period block in the west of the city will set you back €157,500 (through www.homesonsale.co.uk/poland).

Poland's national parks offer particularly lovely homes. For example, 40km from Wroclaw, a six-bedroom manor house, renovated and with mountain views, is €300,000 (Property Krakow, 0048 696 376 349; www.property-krakow.com). For those wanting a harder-nosed investment, Letterstone, a British firm specialising in Eastern European buy-to-let, is marketing new apartments from €40,000 in the skiing and summer resort of Zakopane, part of the Tatra National Park (020-7384 7488; www.letterstone.com).

Zakopane has been a tourist destination for Poles since the mid-19th century, and now gets over two million international visitors a year. Like much of Eastern Europe, the infrastructure is less sophisticated than the west, but is catching up fast - half of the 100km road from Krakow airport to Zakopane is motorway, and the EU is expected to fund the upgrade of the rest of the road within the next two years. "It's where Poles holiday and buy second homes. As wealth spreads, Zakopane should benefit more than almost anywhere. That's why it's a good investment," claims Letterstone's James Black.

Like all emerging Eastern European nations, Poland still has problems - unemployment is high and street crime is a major issue. But EU membership is predicted to bring an influx of western Europeans to work and holiday there. So don't expect Polish property to remain cheap for long.

The pros and cons

* Few Polish estate agents market properties on the internet, so house-hunting from afar is still difficult

* Buyers typically pay 3 per cent of a property's purchase price in estate-agent fees; 2 per cent stamp duty; up to 1.6 per cent for title registration; 1.5 per cent legal fees, and some translation costs

* There are no licensed surveyors in Poland, but many builders do inspections and produce reports for buyers for a small fee

* Poland has a double taxation treaty with the UK, so you won't be taxed twice on property purchase, sale or rent income

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