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It may lack the romance of Paris or the glamour of Milan, but there is more to Brussels than chips, beer and the European Commission. Now only 1 hour 55 minutes from King's Cross, Brussels has become an increasingly popular destination for buy-to-let investors who see London and Paris as overpriced but are wary of risky East European markets. “Brussels is a natural choice for investors looking for a good rental opportunity,” says Eoghan Quinn, commercial manager for Thornsett Belgium, which is selling flats in two developments in the city.

Relative to many European capitals, property in Brussels is good value. “It is cheap by comparison with London and Paris,” says Lucy Russell, managing director of Quintessentially Estates, the property arm of Quintessentially private members' club and concierge service. “You can get a beautiful four-bedroom house for about €1.5 million (£1.18 million) - in Paris, you'd be looking at about €2.5 million for a similar property. Really top-end two or three-bedroom apartments in Uccle, Brussels' equivalent of Chelsea, start at about €750,000.” Prices in Belgium are rising, although not as quickly as in many European countries, according to the latest figures from Knight Frank.

However, new-build prices are growing rapidly, as a result of the rising value of land in the Belgian capital. Data from King Sturge suggests that prices in Brussels will have risen by as much as 30 per cent in the two years from late 2006. End sale prices have not risen at the same rate, but it is likely that developers will be forced to pass on costs to maintain their profit margins. “Our latest survey shows that land prices grew by between 5 and 17 per cent across the 19 Brussels communes over the past year,” says Ralph Schellen, head of development at King Sturge in Brussels.

Relatively low prices are not the only attraction for investors. A prosperous, transient population boosts demand for rented homes. Quinn says: “The rental pool is excellent, with a huge number of diplomats, non-government organisations and members of the various European institutions all looking for good rental properties.”

Excellent transport links are another draw. The new Eurostar terminal at St Pancras brings Brussels within commutable reach. Paris is less than two hours away, and a new high-speed rail line is scheduled to open soon, cutting travel time to Amsterdam to 1 hour 45 minutes and to Düsseldorf and Cologne to 1 hour 30 minutes.

Belgium is also a good place to be a landlord. “The typical lease period is a minimum of three years and rental contracts are consumer index-linked, which gives protection against rising interest rates,” Quinn says. “As a landlord in Brussels, the legislation is very much in your favour: there is no tax payable on private residential rental income, for example.”

There are drawbacks. Property taxes are high at the front end - transfer tax is 12.5 per cent - but there is no capital gains tax to pay if the investment is held for five years or more. “Yields range from about 4.5 to 5.5 per cent,” Schellen says. “Low, but stable.”

While Brussels has experienced double-digit house price growth for the past few years, growth is slowing. “If you are looking to make money quickly, Brussels is not the place for you,” Russell says. “However, over the longer term it is a great place to invest.” The most sought-after properties for families are mostly in the southern districts of Uccle and Boitsfort, home to excellent international schools. Woluwe, a quiet district in the east of the city, is also popular with families. Younger tenants may prefer Ixelles, packed with bars and restaurants, or Etterbeek. Turn-of-the-century townhouses sell for upwards of €1million. New-build apartments are available for much less: the Irish developer Thornsett group is selling two developments, the mixed-use Boniface Square in Ixelles and Leopold Village in the European quarter. Fourteen apartments are still available in the 28-unit Boniface Square development; prices for two-beds start at €377,250. Three-bed townhouses are from €426,250, four-bedroom penthouses from €583,500. Most properties have terraces of up 50sq m to 70sqm (538sqft to 753sq ft), access to secure underground parking and basement storage. Leopold Village, due for completion in autumn 2009, is 250m (820ft) from the European Commission building. Leopold is a luxury development; prices range from €222,000 for a studio to just over €1 million for a four-bedroom penthouse.

Deidre Danaher, an interior designer based in Dublin, bought a two-bedroom, two-bathroom flat with a terrace in the Boniface Square development in July 2006 for €280,000. She says: “Boniface Square is right in the heart of the town, in an up-and-coming part of the centre, an area which is becoming trendy.”

But the main attraction was price. “I paid €280,000 for 1,100 sq ft,” Danaher says. “If I bought a similar property in Dublin, I would have paid €750,000 to €800,000. The property has already risen in value by about 10per cent, and I can see prices going up further. The European Commission is not about to move anywhere.”

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