Have you ever thought about retiring to Bulgaria?
By Basil Preuveneers, London
Have you ever thought about a lifestyle change by moving your whole family out to Bulgaria to start a new life? An increasing number of people are thinking just that. There are many reasons for this and the first consideration is a very low cost of living: Bulgaria is known to have the lowest cost of living almost anywhere in Europe. In Britain, older people who have worked all their lives are now finding that their savings and pensions are not going to give them a lifestyle sufficient for their expectations. But it is not just older people who are making the change to Bulgaria: It is young couples with children who want to bring them up in a more crime free environment with a better standard of living and a strict school discipline. The education standards in Bulgaria are very high.
I first came to Bulgaria in 2005 having heard of the business opportunities and money to be made in property dealing. I wasn’t even aware where Bulgaria was. It is in fact a very large rectangular block of land of about 400 miles long and 300 miles from north to south with the Black Sea on its eastern border. To the north is Romania and to the South is Greece. Its size is about 43,000 square miles so it is quite a small country. When you hear about the problem of Bulgarians coming to England to settle in their thousands, this is complete newspaper fabrication. To start with, few have any particular desire to leave their own country and secondly there are only about eight million Bulgarians in total – roughly the population of Greater London. Surprisingly, statistics show that there are roughly an equal number of young males to females. The impression on the streets is much different – there are literally thousands of absolutely beautiful young women most stylishly dressed in the latest fashions. Men seem to be in a minority. Actually, Bulgaria’s population is declining, despite there being 10 births per 1000 population each year which is roughly the same as in the UK. By comparison, Poland is more than twice the size with a population of 38 million. Romania is also twice the size of Bulgaria and has a population of 21 million people.
Bulgaria has suffered a lot over the 20th century having been under the communist rule since 1949. The economy of Bulgaria declined dramatically in the 1990s when communism collapsed and this was made worse during the 1990s when the government mismanaged the economy to such an extent that there was hyper-inflation: a staggering 311 per cent! The Bulgarian people had to cope with the new capitalist regime and found it hard to adjust to what they call “the Changes”, meaning the chaotic transfer from a communist country to a free market economy. Many have still not adjusted and prefer the way it was under communism – in fact, in free elections in 1990, the communists were voted back into power! Since 1997, however, there has been an ambitious reform package and economy has improved ever since. The country’s fortunes stabilised still further when, in 2001, the King of Bulgaria was asked by the President to become Prime Minister! Political parties put aside their differences to ensure that Bulgaria would qualify to become a member of the European Community, which it finally joined in January 2008. The attraction of Bulgaria as a member of the EC is that it is a growing nation in every respect – it has a young upwardly-mobile population – very ambitious well educated and keen to get on in life. People tend to marry younger in Bulgaria and have larger families so this is good for Europe because one thing we lack in established western European countries is babies – a declining ageing population is a disadvantage for western economies.
In the last year or so, foreign property investors have almost completely stopped investing in Bulgaria. For one thing, the credit crunch has put an end to second mortgages. Also you may have been put off considering Bulgaria as a property investment location for the following reasons: Back in England during the 1990s there was a tremendous boom in the economy and many older people were seeking ways to augment their pension by purchasing “buy-to-let” properties. This market quickly became saturated and it was necessary for people to start looking further afield and were lured to Bulgaria by lavish promises and examples of how people made their fortunes very quickly. Over-optimistic estate agents extolled the virtues of the rental market in coastal resorts such as Sunny Beach and Golden Sands and also skiing resorts like Bansko and Borovets. The estimates of rental potential were widely over-hyped; estate agents claimed that it was possible to rent holiday apartments for 12 weeks during the summer. This is extremely difficult to achieve because of the over supply of apartments, the fairly short summer season and the logistical difficulty of preparing the apartments for the next tenant arriving on the same day as the outgoing tenant. There has also been over-development in the skiing resorts and people are now finding that these properties are not only empty all the summer but most of the winter as well. The skiing season can be about 15 weeks long and it is difficult to attract sufficient visitors to mountainous regions during the summer. This problem has been addressed by building spa hotels, golf courses and mountain climbing centres in these mountain areas but these have only been partially successful at the present time although more centres are planned.
However if you are thinking of retiring or immigrating to Bulgaria the considerations are totally different. First there is the very low cost of living. You can buy a house in a country village for as little as €20000 and you could heat this with a log burning stove; this will cost you about 200 pounds per annum which is roughly the amount of the U.K. fuel allowance you will get as a pensioner.
Now that Bulgaria is in the European Community, you can have your pension – currently £95.25 per week – sent out to Bulgaria and if the British government increases the rate of your pension, then even if you are living in Bulgaria you will get this increase as Bulgaria is now an EC member. Try living on £95 a week – it will go three times further in Bulgaria! Your private pensions can of course be paid to you wherever you are living. Council taxes or rates can sometimes be as low as £20.00 a year. A loaf of bread is about 50 pence and a pint of beer 80 pence. Winters in Bulgaria are roughly the same as in Britain although sometimes slightly colder. The Bulgarian summers are generally hotter and longer than in Britain. The country is very under populated – only 20 people to every square mile. Bear in mind that, geographically, Britain is a small country and has 61 million people. In Bulgaria, there are thousands of square miles of open countryside to enjoy.
It will be essential, in my view, for you to learn the Bulgarian language if you are going to get fully involved in the country and its people. Many Brits are very bad about learning foreign languages and if they don’t even try, they will get by, as many Bulgarians speak good English. But Brits remain very isolated in the community if they make no efforts to learn the language. This can be tricky to start with as it involves learning the Cyrillic alphabet, but with practice, this can be mastered quickly.
If you are coming to Bulgaria to retire, you would need to be sure that health facilities are nearby and available. You would need to take out private medical insurance but this would not be very expensive – around £200 a year – as medical fees are very low and of first class quality. For young families, they will need to consider schooling arrangements and they will have to arrange some private tuition beforehand because schools will not take foreign schoolchildren unless they have a basic understanding of the Bulgarian language.
Bulgarians have strong family relationships and look after each other in their families. This is just as well because the pension for old people is around 60 Euros a month. It may be due to the strong family ties that, considering the general level of poverty, street crime is extremely low and there is little yobbish behaviour and disorderly conduct on the streets. British people moving to Bulgaria report that they feel much happier and safer on the streets than they did at home. Many Brits have come to Bulgaria for the summer and end up staying for much longer. It is a good idea to rent before you buy so that you can be sure that the area is the right one for you. It is best to stay a whole season, winter and summer, so that you can see what it is like in the quiet off-season.
There are many good business opportunities for people who are keen and willing to work. The economy in Bulgaria is good. This is measured in gross domestic product (GDP) and this is set to grow by five per cent this year. This compares favourably with Britain where the GDP growth is estimated to fall by nearly two per cent in 2009. Property prices in Britain are still falling, but Bulgarian property prices may still rise by 5% this year. The global recession has hit all countries and Bulgaria is no exception. However, their banks are now in a stronger position that many British and American banks because they have not been exposed to toxic debt (bad mortgage loans which have turned out to be under-secured by overvalued real estate). In Bulgaria, there is a strong tradition of home ownership, but banks have been very cautious about loan-to-value calculations when granting mortgages. Also, most British buyers bought for cash, using money raised in the United Kingdom by means of second mortgages. There is great shortage of labour in Bulgaria and out of the entire population of nearly eight million, only 3.4 million are in the labour force. Since joining the EU, Bulgaria can now enjoy a sustained period of growth and can take advantage of many EU grants available to build up its infrastructure, in particular the roads and transport systems.
During the four years I have regularly been going out to Bulgaria I have noticed continual improvements in the road and transport system. The towns are now much cleaner, more bustling and appear to be getting more prosperous. I have noticed some slight rise in prices especially on imported goods but shops and restaurants with local produce continue to be extremely cheap. I have noticed many beautiful buildings being erected, many super shopping malls and car showrooms have opened up. There are now many shops selling extremely high quality expensive luxury goods indicating that there must be many people who can afford them.
The long term prospects for Bulgaria are extremely good and it is a location well worth considering if you’re planning to move from Britain.