Banks in Bulgaria start to offer loans for foreign property buyers, but with conditions attached

Foreign property investors who have largely deserted the Bulgarian real estate market are set to be lured as more loans are made available for overseas buyers.

The real estate market in the country has been in a bit of a slump since a large chunk of overseas buyers from Britain and Ireland deserted the country at the height of the global economic crisis and have not yet returned.

As a result of lack of demand many banks withdrew products specifically aimed at foreign property buyers but now they are keen to lend again, according to Tihomir Toshev, executive director of credit consultant Credit Center.

The banks are understood to be targeting potential borrowers from specific countries, especially Russians who are starting to buy again in the Black Sea coast resorts.

UniCredit Bulbank is one of the first to publically launch new mortgage products aimed at foreigners and Bulgarians working abroad. But there are conditions, most importantly that they loans will only be available for development projects financed by the bank.

About 100 000 Russians have purchased property along the Bulgarian coast, according to Yuri Salovyov, Russian general secretary to the Russian embassy in Varna.

Russians generally tend to choose property along large resorts on the coast, or the Bulgarian mountains, but they also settle occasionally for a quiet, rural way of life in small villages, the report said.

‘The great demand for real estate, which initially came from the UK and other English speaking countries, is being steadily replaced by Russian speakers,’ said municipal mayor Avren Todorov.

‘Many Russians are seeking to buy single family homes facing the seafront or flats in the cities, as many of them have decided to outsource their business to Bulgaria and move here permanently,’ said real estate agent Stefan Atanassov.

Meanwhile it has been revealed that hundreds of Brits who own property in the Buglarian ski resort of Pamporovo have failed to pay their real estate taxes for two years running.

The town mayor is trying to defuse a row with some officials believing that the owners are with holding the money while others think it is a misunderstanding.

Letters have been sent to about 600 British property owners with addresses in the UK, according to deputy mayor Georgi Pepelanov. ‘The letter kindly requests that they pay their taxes,’ he confirmed.

Russian and Spanish property owners have paid their taxes on time but the council is owed around 600,000 leva by British owners of a hotel in the resort.

Pepelanov said he believes it is not a deliberate evasion but merely a misunderstanding between the British owners and the companies managing their properties in Bulgaria.