EASTERN Europeans are here in a big way, we all know, but what is less apparent is that they are part of a two-way traffic: Britons are heading east for holidays and to find holiday homes — and also to work. We hop on a cheap flight to Tallinn, Warsaw or Budapest and scour the emerging property markets, buying homes just about anywhere we can place on a map. But is there money to be made? Are holiday lets in Poland ever going to be all the rage? (Paula Hawkins investigates those on page 20). Or might letting to expats on overseas assignments in Russia be a good bet? Britons are becoming more itinerant and there is growing demand for rentals in areas where blue-chip companies have set up shop. For buy-to-let investors who want to invest in Central and Eastern Europe, but who do not want to get involved in holiday lets, focusing on the corporate market can be a good proposition. According to a PriceWaterhouseCoopers study of trends in 2004-05, 42 per cent of 203 companies surveyed forecast growth in short-term assignments in Central and Eastern Europe. In a separate report by Pricoa Relocation in 2005, more than 40 per cent of companies questioned expected to send their staff on short-term assignments to the Czech Republic, Hungary, Poland, and Russia (see the above chart). For those on assignment, finding good-quality rentals in cities often still full of soulless, Soviet-style workers’ housing blocks can be a challenge.

Darren Dyer, who moved to Moscow as a merchandising manager with the Kingfisher DIY retail chain Castorama, says: “There are a lot of big companies coming to Moscow who want to look after the welfare of their people. But there just aren’t the places available; there is more demand than supply of properties that Westerners would be prepared to live in.”

Having relocated with his wife, Michelle, and son Cameron, 8, the family were keen to live in a gated expat community near the Anglo-American school. They were told that there was a year-long waiting list, and the minimum $7,000 (£3,750) monthly rent was higher than Darren’s accommodation allowance.

They settled instead for a three-bedroom apartment in a secure block that they rented for $5,000 a month. It was a far cry from the rural Dorset home that they left behind. Darren says: “We had never lived in an apartment — for the first six months there were no children for Cameron to play with.” Noisy building work in the block and a rent increase to $6,500 after a year prompted the family to start hunting again. This time they found a three-bedroom townhouse in the much-desired location of Pokrovsky Hills. But it wasn’t cheap. Darren says: “Rent is $8,500 month. We had to put up a $10,000 deposit and pay six months in advance.”

Liam Bailey, of Knight Frank, says that Moscow’s popularity among big European and American companies has created competition for topnotch homes, although many investors are frightened of buying there.

Other hot spots in Central and Eastern Europe include Slovakia, Bulgaria and Romania, which are on course to join the European Union next year, and the Baltic states, according to Savills. Agents in those countries say that house prices are rising by 30 per cent or more a year. In larger and more developed residential markets such as the Czech Republic, Poland and Hungary, price rises, though substantial, have been more moderate. But the demand for top-quality homes can be just as keen.

Campbell and Kirsteen Macfarlane moved from Scotland to Budapest in January for a two-year assignment with BT Global Services — Kirsteen as a bid manager, and Campbell as a sales director for Eastern Europe and Russia. Although they enlisted the help of the relocation company Inter Relocation (00361 2785680, www.interrelo.com) they had to view 35 properties before finding the right home.

They now rent a three-bedroom detached house with a swimming pool in District 2, a 20-minute drive from their office, for €2,400 (£1,630) a month (negotiated down from €3,200). Kirsteen says: “There is a massive variety in quality. Expats tend to live in certain districts — people tend to clump together either near the centre or near English-speaking schools. Americans and the French have reinvigorated this area and made it more popular.”

For the intrepid investor hoping to let to corporate employees, Charles Weston-Baker, of Savills, points to the expanding business communities in Sofia, Prague and Cracow. He says, however, that returns vary considerably, and that the quality of property must be exemplary in specification and location. “Gross yields are 5 to 10 per cent and occasionally more. With capital appreciation, we always say: be realistic. Say 5 per cent but often it can be 10 or 15 per cent. Prices can go up as well as down in value.”

• We have 20 pairs of seminar tickets to give away for the Property Investor Show, www.propertyinvestor.co.uk, at Excel on September 22-24. E-mail your name and address to competitions@wriglesworth.com, putting TIMES in the subject box, by next Monday (September 18). Seats for the seminars are subject to availability.

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