Overview: Buying in the new Europe has a hint of the Wild West

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The Independent Online

In an idle moment, there can be nothing better than browsing on the ever-growing list of websites advertising properties in corners of the world where we might never have set foot. They also pop up regularly in print, carrying price tags that we associate with terraced houses in the North-east of England. On that straight comparison, it is not too difficult to come down on the side of a stone house in rural Romania, even if we can't pinpoint the exact location on a map.

In an idle moment, there can be nothing better than browsing on the ever-growing list of websites advertising properties in corners of the world where we might never have set foot. They also pop up regularly in print, carrying price tags that we associate with terraced houses in the North-east of England. On that straight comparison, it is not too difficult to come down on the side of a stone house in rural Romania, even if we can't pinpoint the exact location on a map.

The performance of the UK market over the past few years has rather given the impression that it is only ever a matter of time before the cheapest property starts to soar in value. Unfortunately, this is an impression that some estate agents selling abroad only encourage, much to the concern of one international lawyer.

John Howell, whose London firm specialises in property and European law, has seen agents promising off-plan purchasers that values will rise by 60 per cent in two years and that as soon as the property is completed it will sell instantly. "The reality is that the property may be valued at 10 per cent more, which, after costs, makes it barely worth it, and that there are no buyers. So many people investing in property abroad have unrealistic expectations."

While he reckons agents making such outrageous claims should answer for them legally, the safest course is for purchasers to get informed. If buyers are still being hoodwinked in Spain, then even more caution is called for in "new Europe".

One hot spot is Bulgaria, where nine out of 10 buyers are investors only, according to Howell. He describes the country as attracting a feeding frenzy, with buyers doing little, and making judgements purely on price. "If it wasn't the price, would you choose to go there?" is a question he puts to clients. The herd instinct, which sees buyers piling in without thought, benefits the early birds but is unlikely to bring much reward to the latecomers.

This is not to say that Bulgaria, along with other places just beginning to touch the radar of the UK investor, does not offer opportunities. The answer would seem to be: consult a specialist before being seduced.

"It is not like buying in the UK. There is a Wild West element to it," says Howell. He gives the example of an agent who added an extra £20,000 to the price of a house he was selling in Turkey for his own pocket. Nor are buyers aware of how common defective titles are, how difficult it might be to get planning permission in some places, or how easily they can be sucked into ridiculous schemes.

That said, Howell sees long-term strategic investment in European properties as attractive, with the emphasis very much on quality - even if it means taking on board the fact that something that looks too good to be true usually is.

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For Christmas, shoppers who have property closer to home on their lists, is it too late to make the most of a sluggish market? Not according to a few agents. James Hyman, of Cluttons' Tower Bridge office, says "the mirror image of a two-bed flat in a warehouse conversion that sold at £430,000 in August is now on the market in the same building at £400,000, but the vendor has found another property and is likely to accept £380,000 to sell quickly".

Ed Mead, of Douglas & Gordon's Chelsea office, adds: "Now is the best time to buy since the beginning of 1999. Vendors appreciate that the market has changed and prices are hugely negotiable. There are prime central London properties on the market at about £1.1 million with vendors who are open to offers in the region of £920,000. It is now that the clever buyers should buy."

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