When Britons dream of living abroad it’s usually somewhere hot that has a more relaxed way of life, or a place where day-to-day costs are much lower than at home. Luxembourg isn’t generally the first place that springs to mind.

However, favourable tax laws have created in its capital city — also called Luxembourg — a thriving European banking centre which, together with a host of EU institutional buildings and a surprisingly robust film and TV industry, fills a sizeable chunk of the economy. According to Statec, the Grand Duchy’s statistics office, 43 per cent of the country’s population come from outside its borders — 4,510 expatriate Britons live and work there. And Luxembourg, with a population of less than half a million people in an area the size of Dorset, boasts the third highest GDP per capita in the world.

Despite this, Luxembourg is a mystery to most people. That was certainly the case for Sheila Nash: when her husband, Harold, a fund manager for J P Morgan, told her that he had been offered a job there she admits: “I had to look it up on the map.”

The couple rented a converted farm building just outside the city after spending their first six weeks in an apartment hotel; with plenty of office workers coming and going, Luxembourg has a lively rental market both in and around the city, with rents comparable to neighbouring European cities. But towards the end of their rental period Harold and Sheila had made up their minds and decided not only to buy, but to settle there.

“It was a quality-of-life issue,” says Harold. In Britain he had a long commute to the City of London from their house in Andover, Hampshire. “Here, if I have to be at the office until 7.30 at night I can still be home for dinner at 8,” he adds. Sheila also found a new lease of life, becoming chairwoman of the British Ladies Club, which has some 740 members who meet at baby groups, book clubs, tennis mornings and numerous other social gatherings.

The Nashes bought a three-bedroom house in May 2004 for €425,000 (about £290,000) in Remich, a town on the banks of the Moselle River close to the border with Germany. With a microclimate that makes it warmer than the surrounding area, Remich, in the heart of the Moselle wine region, is sometimes called Luxembourg’s Riviera. “The house was in a pretty sorry state. The interior had been ripped out, with the old wooden floors replaced by a tiled concrete floor,” says Sheila. “The garden was completely overgrown. We found two shopping trolleys in it when we cut it back.” There was also the problem of the previous owner’s cats, which had shredded all the wallpaper in claw reach on the ground floor.

Nevertheless, Harold and Sheila were not discouraged; they knew that family houses are in huge demand. The average tenure of property is very high in Luxembourg. Or, put another way, houses change hands much less often than elsewhere in Europe, so Harold and Sheila did not delay. Steve Federspiel, of the estate agents ISK, says that two-bedroom apartments can cost from €2,500 to €6,000 a square metre, though property prices are pretty stable in Luxembourg.

Earlier Luxembourg relocators were Val and Ed Ellis, who works for the European Commission. They bought their first home in the capital in 1989. “It was a very pretty house with a little turret, in a very pretty area,” says Val. It sits on a steep slope in one of the valley gorges that dissect the city centre. To expand the floor area of the house to accommodate their three children they had to buy a large rock behind the house and apply for the necessary planning permission, but their ideas for renovation fell foul of new planning guidelines. Time slipped by and while their plans went back to the drawing board they needed somewhere to live, so in 1991 for about £100,000 they bought a five-bed terraced house at auction. “Auctions are always held in local cafés and the winning bid is confirmed by the auctioneer banging a shepherd’s crook on the floor three times,” Ed said.

Like many others who have settled in Luxembourg, they have a deep affection for life in the Grand Duchy. What began as a temporary adventure ended as a permanent passion. The Luxembourg Government is committed to a five-year expansion in population numbers, so expect more to be moving in and adding to the numbers.

ISK, 00352 429429, www.isk.lu
www.athome.lu

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