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New kids on the Eastern Bloc

(Filed: 11/01/2003)

One Briton voted Man of the Year; scores of others hot on his trail. What's going on in Bulgaria? Andrew Eames reports from the rising star of the second homes market

Stephane Lambert, 36, from Oxford, is the proud owner of a village in Bulgaria. This sounds a bit grander than it is because Sera Livada is an abandoned settlement of just 12 houses, many of which are barely more than ruins covered in vines, nettles and overgrown fruit trees. Nobody lives here any longer; no dogs howl from behind the village gates; there are no chickens rootling around the well and the handful of properties that do have roofs are still likely to need rebuilding from the ground up.

Bulgarian Properties
Bulgaria on a postcard: already west Europeans have snapped up villas on the Black Sea coast

But skilled labour comes pretty cheap in Bulgaria and, as for the cost of purchase, half-timbered rural houses like these can sell for as little as £1,000. At this rate, it doesn't take much to become lord of all you survey, however decrepit it may be.

Currently, the tall, laconic Englishman and his business partner Andy Anderson, old college friends and town planners by profession, are unsure what to do with Sera Livada. Create a small eco-village resort, perhaps, or possibly leave the houses as they are and sell them on individually. For Stephane and Andy have slipped, almost by accident, into the international estate agency business and, after a year in operation, they have a bulging database of Brits who are interested in Bulgarian bricks and mortar.

Described by Stephane as an "undiscovered gem" and once the playground of the Eastern bloc, Bulgaria has been going through difficult times in recent years. Since the fall of the Berlin Wall, its currency has devalued, its economy has struggled to find a new direction, and many of its rural communities have abandoned their self-sufficient lifestyles and gone to seek work in the towns.

With EU membership looming, the laws on property ownership are changing and already a substantial number of west Europeans have snapped up villas on the Black Sea coast. Now, they are beginning to penetrate inland too, with the help of the likes of Stephane and Andy.

The two friends are not typical estate agents, and selling property was far from their minds when they first arrived here four years ago as regional managers for a United Nations project called Beautiful Bulgaria. Their task was to restore the country's better-looking architecture, using a workforce of the long-term unemployed, during which they got to know several architects, engineers and builders.

The project was to prove the beginning of new lives for both men - Andy has since married a Bulgarian, and Stephane is just emerging from a long-term relationship with another Bulgarian woman - and they were on the lookout for ways of staying on when an unforeseen opportunity came along in the shape of Channel 4's A Place in the Sun, which wanted to do a slot on Bulgaria. Stephane and Andy helped with some of the logistics and duly appeared in the programme's credits. The result was 3,000 emails from potential clients.

With such clear evidence of pent-up demand, it was an easy enough decision to hand over the reins of Beautiful Bulgaria and set up Stara Planina, with offices in the medieval city of Veliko Turnovo - which is like a hilltop town in Tuscany or the Dordogne - and in the Black Sea resort city of Varna.

So far, most of their clients have been looking for holiday villas and retirement homes on the coast, where the properties are large and recently built. A few already knew of Bulgaria from previous holidays in the local resorts of Sunny Beach and Golden Sands, which are the bargain basement of summer sun, but most are newcomers to the country who admit that if they'd had more money, they might well have headed for Spain.

Rock-bottom prices are undoubtedly Bulgaria's most compelling attraction. You can get a Black Sea villa for about £15,000, while the Spanish equivalent is likely to be several times as much. And the value of Bulgarian property should increase steadily once the country is admitted to full membership of the European Community, possibly as early as 2005.

"We're assuming property prices in Bulgaria are going to go up in much the same way as they have in Spain and France," says Patrick Godfrey, 37, a social worker from Trowbridge, in Wiltshire, who this summer bought a new-build villa on the northern coast for just £16,500, and is having a pool installed for £2,000.

Such low costs were crucial in making the decision, says Patrick. "We don't earn vast amounts, and our summer holidays have always cost us several thousand every year, so even if we only use the house for four years we will have got our money back." In fact, so convinced is he of the Bulgarian bargain that Patrick is looking to buy another, cheaper, property further inland.

Dave Walton, 60, a retired civil servant from Sunderland, has different motives. "Our plan is to live here permanently, renting out the house back home," he says. He and his wife Sheila have seen their "dream house", and now they are trying to raise the £30,000 required.

The Waltons badly want a change of scene, feeling that England is plagued by yobbish behaviour, too many cars, miserable weather etc, and they have been more than impressed by the friendliness of the locals.

Less typical of Stara Planina's mainstream clients are twentysomethings Martin Ellis and Pamela Jordan from Belfast. He is an architect and she's a writer. The couple, who have travelled extensively in Eastern Europe and who are enthusiasts for traditional architecture, are hunting for a rural property of timber and stone in a couple of acres of land for about £5,000. When I met them, they had already seen a strong contender, and it was only their first day.

Most potential purchasers fly in to Varna on summer holiday charters direct from the UK. They have to pay a nominal registration fee with Stara Planina to ensure they are serious, and then Stephane arranges for them to view a series of properties - it could be as many as 10 in three days - from which to choose.

The agency takes no cut on the purchase price, which, on the whole, is the same to foreigners as it would be to locals, but it adds a 10 per cent fee for doing all the legal work, accounting, translating and logistics. They also have all the right contacts should the clients want to make alterations - most commonly adding a swimming pool and enlarging the kitchen.

Stara Planina has emerged from its first year with 12 finalised sales, and another 10 pending, but Stephane has discovered that being an estate agent has its down side. "Clients can be surprisingly rude, and they don't seem to be able to make allowances for the fact that this is Bulgaria." His mobile phone bill is the equivalent of the salaries of two extra members of staff, and a lot of his time is spent placating, hand-holding and re-arranging. "It seems," he says, "that people are used to treating estate agents badly."

The locals, on the other hand, hold him in high esteem. He and Andy top the guest list for local social events and they are regularly asked to open exhibitions and judge beauty competitions, which the Bulgarians love. Their work with Beautiful Bulgaria helped create this profile, but selling properties has made them popular, too, because it is perceived as producing revenue where previously there was none, and restoring some value to rural areas which had effectively been abandoned.

In fact, Stephane has become so much of a celebrity that the people of Veliko Turnovo recently voted him their Man of the Year, and he was even asked to consider taking on the role of mayor - which he declined. These are honours which are not often bestowed on novice property dealers, especially foreign ones, but it seems that the locals in these parts still have a refreshingly uncynical view of the world.

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