Features

Rural retreat

1 Dec 2005 by business traveller

It's a warm, late summer's evening and the grapevine-covered corner terrace of the pub is already pretty full. Regulars prop up the bar inside, surrounded by the usual paraphernalia – Guinness beer mats, Tetleys bar cloths, and a picture of Her Majesty.

Outside, Ian and Louise arrive, carrying the plans for their cottage conversion. Meanwhile, Sylvia introduces everyone to her daughter who is visiting for a few days, and Derek, pint in hand, is holding court with a few newcomers to the neighbourhood.

It's a scene like any other pub in England, but this isn't England or Wales, or anywhere in the UK. Nor is it in one of the Spanish costas, or any other part of the Mediterranean favoured by the British expat crowd.
This pub is called Na Kuklja and it's in the suburbs of a town called Murska Sobota, in the rural northwest corner of a country that a good deal of people wouldn't even be able to locate on a map. But these savvy Brits have had the foresight to buy property in Slovenia, the tiny former Yugoslav Republic nestled between Italy, Hungary, Austria and Croatia, and this "pub" has become their unofficial meeting place.

Since joining the European Union in May 2004, Slovenia's real estate market has become free of legal restrictions for EU citizens, and discerning Britons have been snapping up homes for prices that are considerably lower than back home. According to the latest figures from the Office for National Statistics, over a quarter of a million British families owned a second home abroad in 2003/2004, a 20 per cent increase on the year before.

In the same period, the ONS estimated that British people owned property abroad worth just over £23 billion; this figure has doubled in four years.

Of the 257,000 foreign homes owned, 69,000 were in Spain, 51,000 in France and 15,000 in the US. Saturated with buyers, these countries have seen their property prices rise and bargains become far less common than they once were. Figures from the Royal Institution of Chartered Surveyors show that house prices rose by about 15 per cent in 2004 in both France and Spain, after similar double-digit rises the year before.
Attracted to new, undiscovered markets, and encouraged by the launch of low-cost airlines and the increasing number of TV programmes on the theme, discerning buyers are now turning to alternative destinations. According to Matt Havercroft, editor of A Place in the Sun, the specialist overseas property magazine linked to the Channel Four TV show, more and more people are now snapping up value-for-money homes in emerging markets like Slovenia, Bulgaria, Montenegro, Romania, Estonia, Croatia and Turkey.

He says: "Some of these emerging markets have come to the fore because people are becoming more adventurous and are looking for new places to buy, and because they have been priced out of other markets. There's the lure of cheap prices where buyers can make a quick profit.

"Maybe a decade ago, owning a second home overseas was for the privileged few, but now it's not just wealthy retirees. It's appealing to people of all age groups, including first-time buyers who have been priced out of the market in the UK."

Derek Smith, a Yorkshireman who runs property agent Slovenian Cottages (and is a regular in the Na Kuklja pub) says many people have been scared away from the more popular Mediterranean destinations because of much publicised problems with planning laws and development. "You hear a lot of horror stories of people getting ripped off in Spain and in the Balkans," he says. "We are attracting sensible buyers who want a stable market and a straightforward buying process."

Slovenia is regarded as one of the most stable of the 10 new EU members. It is also one of Europe's most beautiful and unspoiled countries with a fast-growing tourism industry. Its tiny but cosmopolitan capital, Ljubljana, is becoming a popular city break destination, and its alpine and rural regions are known for their first-rate hiking, skiing, riding, cycling, climbing, golf and other outdoor activities.

Since May 2004, Derek has helped sell 132 Slovenian properties to overseas buyers – 80 per cent of them British. Most are holiday homes but some buyers have made the decision to relocate. He focuses on Prekmurje, a picturesque wine-growing and thermal spa region in the northwest, which is only 12 minutes by car to Austria, 20 minutes to Hungary, two and a half hours to Vienna and three hours to Budapest.

"It's unchartered territory and one of the cheapest. The areas around Lake Bled or Ljubljana are triple the price," he explains.

Since May 2004, Derek says overseas property buyers have brought E4 million into the local economy, providing employment to thousands of builders and tradesmen and prompting renovation and improvement of many derelict properties. "There are lots of old cottages built 100-150 years ago that need renovating and that's what the British love. The locals think we're crazy because they only want the new properties, and the local councils are happy as it means that all of the rundown, empty properties are renovated and properly looked after.

  "I'd say 90 per cent of the locals welcome the Brits. There aren't enough of us to worry them and we don't attract the same crowd as the Spanish costas. Recently, a member of the National party here stood up in parliament to complain about the influx of overseas buyers and he got shouted down by the rest of the politicians, including the Minister of Internal Affairs. I think that says it all."

Many of the country cottages or farms attracting buyers have been passed down through generations to younger family members who then decide to sell up and move to the city.

Inevitably, prices have risen and are set to rise further when Slovenia takes on the euro in 2007. "Three years ago, most people were coming and looking for property of around £12,000. Then it became £20,000-35,000, and now I'm getting people coming with £100,000-200,000," says Derek.

The few properties for under £40,000 usually sell within a week of going on his books, and potential buyers book their visits three months ahead. "I won't sell to anyone who just wants to buy and won't do anything with the property. They must either renovate and live in the property or rent it out."

Derek's Slovenian wife Suzanna handles all the paperwork. "Most of the properties we handle are in a national park and it usually takes no more than 10 weeks to go through the buying process," she says. "If you're buying outside of the national park, not on agricultural land, a sale can be completed in just a week. But if you don't know the rules, or you can't speak the language, it can take months."

For more information on Slovenia, contact the UK Slovenia Tourist Office, tel +44 (0)870 2255 305; slovenia.info

The buying process

Frances Sargent of Slovenian Properties offers some advice for would-be property owners in Slovenia.

"Once you have found a property, get your lawyer to submit an offer in euros based on what you can really afford, taking into account all the extras such as tax (varies from 8-20 per cent depending on the type of property), translation costs, bank costs, currency transfer costs, furnishings and equipment. Generally speaking, fittings in Slovenia are of a comparable cost to the UK but labour is cheaper.

If the offer is accepted, you must make an application for an EMSO number (a number that Slovene citizens are given at birth) and perform land searches. Land Registry searches in Slovenia can usually be provided within two working days (where else in the world can they be done at such speed?).

Next, talk to your bank in the UK about the different possibilities for moving money across to Slovenia, including using forward contracts in euros.

Translate all documents including the contract, the details from the Land Registry, any management contracts and all insurance policies. Read through them with the guidance of a lawyer. Unusually, the same lawyer often acts for both parties.

You will need to open a bank account in Slovenia for all those standing orders (utilities, management charges, cable TV and so on). A good relationship with a Slovene bank will make all this very simple. Once you and your lawyer are satisfied, sign the contract in both languages and you're ready to move in."

More buying tips

Costs

  • Legal fees and stamp duty are a maximum of £400
  • The cost of keeping a property is around £5 a week
  • Rates cost around £36 a year
  • You don't have to have a Slovenian bank account, but it does help

Property agents

Slovenianproperties.com; sloveniacottages.com

Getting there

Ljubljana is served by Easyjet (easyjet.com) from Stansted and Adria Airways (adria-airways.com) from Gatwick.  Return fares with Easyjet start at £51 and with Adria £141. For other routes into Slovenia, Ryanair (ryanair.com) flies from Stansted to Klagenfurt in Austria with a connecting train to Ljubljana via Villach. It also flies to Trieste and is considering launching flights to Maribor in Slovenia.

A Slovenian getaway

Sylvia Mooney and her husband Martin from Preston, both aged 48, bought an old two-bedroom cottage and barn with 2.5 acres close to Murska Sobota for £43,000 and spent around £15,000 on renovations. They first viewed it on August 13, 2004 and completed on October 1. Sylvia and their pet dog, Deiter, moved in three months later when renovation was complete. Martin works in Saudi Arabia but visits regularly. Sylvia explains the appeal of her new home.

"We always wanted to live somewhere in Europe eventually, but we didn't want to live in a place like Spain that's too built up and commercialised. I didn't want to be part of a clique of British expats. Here, if you want to see people you can but you don't feel like you have to.

We went to Bulgaria last March but itdidn't feel right. The infrastructure was poor, the roads were dreadful, and we weren't sure about some of the people we met. And it's not in the EU so it's more difficult. You have to set up a company to buy.

When we came here we just knew it was right. We saw the house and by midday we had bought it. The whole process was painless. We had to do some renovations: central heating, new boiler, take a wall down, general decorating, a new chimney and balcony. We will convert the barn into a house in 2006 and maybe my mother-in-law will move in.

I guess it's like an early retirement for us. I was a cash administrator for Tesco and Martin works for Aerospace in Riyadh. He has another five or six years to go before he can retire but he keeps doing the lottery hoping he can move here earlier!

It's been much easier than I thought. The neighbours (a few English but mostly Slovenian) quickly came round to introduce themselves and invited me for coffee and dinner, or brought me fruit and veg from their gardens. I went to the local health centre the other day and got seen straight away. Can you imagine that happening at home?

There's a little bar at the end of the road and by the time I went in there, word had already got around that I'd moved in and everyone was so welcoming.

I feel safe walking Deiter at night, even though there are no streetlights. Everyday shopping is a lot cheaper. Nectarines and strawberries are about 50p a kilo. You can eat a three-course meal with wine out in a good restaurant for just over £10 a head.

It helps if you can speak some German, but the people are very patient and friendly and will help you learn.

The pace of life is so much slower here, so you don't feel under pressure when you don't know how to ask for something. They want to learn English too, so they love speaking to you.

My 22-year-old daughter Sara comes out regularly and uses it as a base to explore — Ljubljana, Budapest, it's all so near.

Me, I have my veggie patch and my walnut tree, and I might even get some chickens. I do the gardening, go for lovely walks, go to the gym. It hasn't been a problem being on my own here. I absolutely love it, and I know Martin will too."

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