Property Secrets Europe ABRIDGED

If you want to invest in France - but don't know want to wait for me to complete my France Uncovered series before making decisions - here are four destinations I believe you would ignore at your peril. Look out for next month's newsletter - I'll have a preview of three more locations that will have you licking your lips in anticipation!

1. Biarritz

Situated on the Basque coast of south west France, Biarritz is very nearly in Spain. In fact, it is only a 20-minute drive - across the Pyrenees - from the Iberian Peninsula.

At one time, it was seen as the most upmarket resort of the Atlantic coast and had recently been rediscovered by the water sports fraternity - most notably the surfers. Golf and horse riding enthusiasts will also find much to attract them to the town.

Among its attractions are an art deco casino, which has been returned to its 1930s appearance, and some lively nightlife.

The sandy coastline around it is frequented by beautiful people and surfers alike, and the airport is only 10 minutes' drive from the town centre.

The town's architecture is Basque, with half-timbered whitewashed houses. Properties available to buy include renovated flats in mansion houses, and detached villas with gardens in residential areas.

Any new houses must complement the Basque architecture of the town.

Studio flats in new blocks cost about 100,000 euros and a one-bedroom flat in upmarket St Charles 200,000 euros plus, but better value can be found around the covered market area of Les Halles only minutes from the beach. Here you can pick up similar properties for as little as 95,000 euros.

Renovation projects are available. A four-bedroom flat in the St Martin area, in need of a serious makeover, can be bought for around 250,000 euros, for example.

Ryanair (which also flies to nearby Pau), flies direct to Biarritz and Bordeaux and Toulouse airports are both a couple of hours away.

Motorail operates to Biarritz, and Rail Europe runs services to Biarritz from London via Paris. You can even sail with P&O from Portsmouth to Bilbao - in northern Spain – which is only an hour's drive away.

2. Bordeaux

The university town of Bordeaux is the department's major cultural centre, with its top museums and a grand theatre, but its prosperity stems mainly from wine, you won't be surprised to find.

Bordeaux has a great deal going for it. Glorious wines, outstanding cuisine and a wealth of fabulous restaurants, and that's just for starters! It also has a buzzing nightlife, live music and art-house cinema.

Its main airport - Merignac - is in the centre of the department, so  most places can be accessed within 45 minutes.

On the edges of town there are many modern apartment blocks, where basic, one-bedroom flats start from 45,000 euros and three-bedroom apartments in older buildings costs around 195,000 euros.

More centrally impressive neo-classic stone buildings are split into flats, where studios cost from 30,000 euros.

Small, well located town houses fetch around 250,000 euros.

Property prices in Gironde have risen faster than the France-wide average rate of 10.6 per cent over the year - and the fashionable, central, Bouscat area has seen rises of 20 per cent.

Property here is much sought after and prices will, experts believe, continue to rise, though perhaps not at the heady rates we have seen over the past decade.

Bordeaux is served by direct British Airways and Air France flights and by TGV service. The journey from Paris takes three hours.

3. Lyon

France's second largest city and a renowned centre of gastronomy, Lyon, with its two TGV stations, efficient tramway and high-tech industrial parks housing many international companies, is certainly a modern business centre.

However, it does not lack charm. Tourist attractions include fine restaurants and an amazing 27 museums.

Its large student population also ensures contemporary culture abounds.

It has many excellent examples of Gothic and Renaissance architecture, but the jewel in its crown, many believe, is its stunning neoclassical opera house.

Central Lyon consists mainly of apartments - houses are more common in the suburbs.

A good investment option here is to buy a pied-a-terre to use periodically, renting it out for the remainder of the year to generate income, and - in all probability - selling it on at a profit later.

Studios in the city centre range in price from 40,000 euros to 80,000 euros and one-bedroom apartments in modern blocks start from around 60,000 euros - and 150,000 - 200,000 euros will buy a superb loft-style apartment.

However, expect to pay up to 450,000 euros for a three-bedroom flat.

British Airways and Air France fly to Lyon from Heathrow, Gatwick, Manchester and Birmingham.

Paris is two hours plus away by train. Lyon is 769 kilometres from Calais, if you're tempted to drive!

4. Marseille

The port of Marseille was heavily bombed during the Second World War, hence it has many post-1945 buildings.

The city is very multi-cultural and, for some, rather gritty. But that may be part of its appeal.

The old port boasts superb seafood restaurants and harbour views, but Marseille's main attractions for the property investor is its proximity to the Côte d'Azur and inland Provence.

For though the coastline on which the town sits is undoubtedly less glamorous than the Riviera to the east, prices there are, for that reason, much lower.

Marseille has literally hundreds of apartment blocks. Many of them are sit happily at the bottom end of the scale, but others are positively luxurious.

Studio flats sell from 90,000 euros and basic one-bedroom flats for about 100,000 euros, while at the other end of the scale, overseas buyers are piling in to buy luxury villas for 400,000 euros plus in the smarter suburbs.

Also look out for competitively-priced new developments being built on golf courses near town. They provide security, year-round letting potential and club houses, restaurants or bars - hence a ready-made social life.

British Airways flies direct to Marseille from Gatwick and or Air France flies to the city from Paris Charles de Gaulle. The TGV journey from Lille or Paris takes 3 hours.

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If you fancy a French holiday home/investment property but don't want to miss out on quintessential English pleasures, this new development could be just for you.

It’s in the Dordogne - an area being dubbed Little Britain because of the large numbers of Britons relocating there.

In fact, in some areas, garden fetes and ex-pat cricket matches are the norm among resident Brits who have flocked to the area for its extremely agreeable climate, hearty peasant food and country wines.

This is a region that has become synonymous with everything that is good about life in la Belle France, and I can personally vouch for its appeal as it is an area I visit at least every couple of years.

As a regular visitor I have seen its appeal go from strength to strength and I expect house price inflation there - currently 10-15 per cent per annum - to continue.

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Is Lithuania - the Baltic Tiger - set to spring? Or is it more limping
pussycat than sharp-clawed investment opportunity?

The hyped-headlines tell us that Vilnius is the new Prague when it comes to property investment.

But here at Property Secrets we always like to get a clear view behind the headlines to see what is really going on.

ooo HOTSPOT

After hearing talk that rents in Lithuania’s prime property hotspot -
Vilnius - are softening, we felt we had to take closer look at this market.

Certainly, Lithuania’s gorgeous capital of Vilnius has its charms.

The country’s population is around 3.5 million and 500,000 of them live in this wonderful Baroque city, which boasts the largest old town in the Baltic.

As well as the historic city castle, now being renovated, there is a huge development being built on the right-hand bank of the Neris River as part of a massive 800 million euro investment project.

Vilnius also has the biggest shopping centre in the Baltic - the Acropolis with its 215 shops, ice-rink, cinema complex and bowling alley. In this former Communist/Soviet-ruled country, capitalism and consumerism now rules.

Alongside the retail development, the old town housing stock is being
renovated with modern, high-quality apartments being built while retaining carefully maintained neo-classical or Baroque facades.

The residential property market is accelerating.

Last year just under 3,000 newly-constructed apartments came to market with almost all of them either sold or pre-sold on deposit. This year it is expected that 3,000 more apartments will be built.

OOO OVER-SUPPLY?

The concern then is whether the market is being flooded?

Will the supply of rentable properties outstrip demand?

What are the prospects for rental levels, for the investor’s return on the investment, and will it mean that investors will need to subsidise their investments if rent does not cover loan repayments?

In Vilnius, high quality apartments start at around 2,000 euros per square metre, rising to 2,600 euros in a new development in a prime area. A typical two-bedroom apartment of around 90 square metres usually sells for about 234,000 euros (all property in Lithuania is priced in euros).

Gedomino Avenue is the city's most popular shopping street where the Grand Duke Palace is being converted into 51 apartments, with prices up to 2,400 euros a square metre.

OOO PRICES FIRM

Top prices though are being charged in the large glass tower complex in the city called Vilnius Gates where prices exceed 3,700 euros per square metre.

There are, though, cheaper properties still to be had away from the city centre where property typically costs less than 1,000 euros per square metre.

Driving the property building boom is Lithuania’s buoyant economy and a change in the nation’s financial habits. Plus it has become easier for locals to buy property. In 2000, mortgage rates stood at around 14 per cent, and two-thirds of property purchases were for cash.

Now interest rates are just under four per cent and buyers can easily get loans of up to 95 per cent of the property value.  British and Irish investors are busy in Vilnius, and the Germans too are interested.

OOO NOT VERY TAXING

Many are drawn by the lenient tax regime, which means there is no real estate tax, no stamp duty, and no capital gains tax provided you keep the property for at least three years after buying it. Sell before the three year minimum and CGT stands at 15 per cent.

Local estate agents report that capital appreciation is more than healthy. Sales volumes in Vilnius soared more than 50 per cent last year.

So the message is to pile in – and quickly?

No – well not just yet, at least. While properties are being built and
bought, a note of caution is being sounded.

OOO DEMAND FOR LOW RENT PROPERTIES

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Anyone thinking of investing in Croatia should be aware that accession talks with the European Union have stalled.

According to EU sources, the Luxembourg-led EU presidency has concluded there is as yet no agreement on the start of negotiations. This has been put down to "Croatia’s lack of cooperation with the EU".

The talks should have started back in March.

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