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Best investment in Britain not Bulgaria

Thursday, 26 October 2006 12:00 AM

A leading group of international property investment companies is advising that buying British will offer property buyers a much higher yielding and lower risk investment in comparison to the overseas investment hotspot Bulgaria.

Assetz International says only Brits committed to having a holiday home and who see their overseas property as a long-term investment are better off buying in Bulgaria than in the UK.

The group said: "Bulgaria has suffered a dramatic change of fortunes in recent months, with the annual rate of capital growth plummeting from a remarkable 36 per cent in 2005 to 13.9 per cent in September 2006, and possibly set to fall further.

"Some areas, such as the Blagoevgrad district including the Bansko ski region, actually experienced price falls in the second quarter although these recovered in the third quarter. The oversupply of apartments has created fierce competition for rentals, even in the face of quickly-growing tourist demand, which is being aggravated by reported poor management from local agencies.

"Overall the return on cash invested has dropped from 116 per cent in 2005 to just 35 per cent for the year up to the end of September 2006"

The group says that by contrast, the housing market in the UK is enjoying a period of strong and sustainable growth with the six major house price indices reporting an average of 8.1 per cent annualised growth from September 2005 to 2006.

Stuart Law, Assetz managing director, commented: "With the UK offering a 50 per cent return on cash invested compared to 35 per cent in Bulgaria, you would need to be a committed Bulgarian investor who is convinced of long term returns, when it is possible to enjoy much greater gains on home soil.

"The UK offers a ready resale market, strong rental demand, lower mortgage rates and a simple and reliable legal system, so in terms of a balanced investment decision taking into account both growth and potential risk, the UK wins hands down at present. The risk return ratio in 2003-2005 was in favour of Bulgaria but that has now reversed.

"While Bulgaria still has value as a holiday home destination and is likely to be a reasonable investment for the long-term, the days of instant gains appear to be over for the time being," Mr Law concluded.

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