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Mortgage News Update

Chris Downham, Managing Director of Bulgarian Home Loans reports on recent changes in mortgages for foreigners purchasing property in Bulgaria. This is urgent and up to date information from a company who are specialists in Bulgarian mortgages. Bulgarian Home Loans report: We have recently seen dramatically decreasing valuations on properties in tourist resorts, with a number of lenders even going as far as to refuse lending in specific tourist areas. We believe that lenders are being quite reactive to the general concerns regarding


Global Credit Crunch

I expect you are aware of the “Global Credit Crunch”. As the name suggests, this has had an impact on finance markets across the globe (again often exaggerated by the press).

Lenders have quickly become more risk averse as well as making their products more expensive, many lenders have completely pulled out of certain markets and others have hugely tightened their lending criteria.



Bulgaria’s property market for foreigners grew at an enormous pace (both in terms of supply and prices) and in some areas this has resulted in an oversupply of relatively expensive properties. Many developers believed that if they planned to build it then a UK buyer would purchase it. This had led to some areas becoming over supplied and in turn has led to a decrease in property prices. This is a short term phenomena and one that we expect to be corrected in the medium term. If you purchased a property in Bulgaria on the basis of huge rents and massive capital appreciation then no doubt you will have been disappointed, you would have been disappointed if you had purchased anywhere in the world. However, we are certain that Bansko will become a world class ski resort (in several years) and the Bulgarian coast will provide long term capital appreciation as well as a superb holiday destination. The short term gold rush approach adopted by many UK buyers and sales agents as well as Bulgarian developers has knocked the market back a pace or two and has altered the attitude of the lending banks.


UK Press

No doubt you have seen many of the ridiculous headlines in the UK press that are heavily criticizing the Bulgarian property investment market. Only months earlier these same news papers were stating that it was the best market in the world. My advice is to not pay attention to newspaper articles written by people with very little knowledge and whose sole aim is to sell papers rather than provide accurate advice, however, these headlines do create a reality, which has been to massively reduce the number of UK buyers willing to invest in Bulgaria as well as making the Bulgarian banks very nervous about the properties that UK clients have purchased.


How does this affect clients?

Clients can now only expect a maximum loan of between 350 - 500 Euros per square meter in many tourist areas. This is massively short of the amount that a majority of clients require.
We do not believe that this in anyway represents a true valuation of a majority of developments in these areas and indeed we are confident about the future for tourism and associated property in Bulgaria, however, banks are positioning themselves defensively in the short term. This is something that is being witnessed globally.

We entirely understand that this will leave clients in a very difficult situation and will explore and exhaust all UK solutions to raise finance for our clients. If you need any assistance or advice please contact us on This email address is being protected from spambots. You need JavaScript enabled to view it.