A tale of two cities
When we heard that we had no choice but to "sell" the Manchester house we were faced with a choice. We were managing the cost of the additional equity release on the London property and the amount of cash we were getting back could be pretty accurately described as a pittance. £30k in the UK market could maybe buy us an outhouse in the Outer Hebridies but that was about it and putting the money in the bank was just boring. So what do we do?
Living in Japan meant that popping to the estate agents wasn't quite as easy as it was in the UK and so we decided to exploit the genius that is the internet.
There are a plethora of websites devoted to finding your perfect home abroad and for someone like me who just likes looking at property it's tantamount to porn.
For some reason over the previous few years Estonia had been calling to me. In my previous job I had spent hours looking at plots of land, houses and even islands for sale for less than what my credit card balance was. The only problem was that as all I had ever bought at that point was my own home buying an island in a country I had never visited, in a language that I didn't speak and where the sea froze over enough to a thickness enough to drive on was a little beyond my means. But oh it was nice to look.
But then Estonia joined the EU. Borders came down and all of a sudden a swarm of property investors from throughout the world were hammering down the doors of every property in the former Soviet Bloc.
So as the money (that we hadn't actually got at that point) was burning a hole in our pocket it seemed logical to look once again at Estonia. The prices had shot up. In Tallinn, the capital city, prices were now over £65,000. Outside of our £30k budget and then some. But in Parnuu the second city prices were still accessible.
I contacted the agents and was disappointed by the seemingly ubiquitous answer of "Oh that one's gone but we do have something similar at £20k more" - except for an off plan development in Parnuu. Just 14km from the beach this development was also in one of the key skiing areas so you had the benefit of year round demand. It was 2 bedroom and due for completion 18 months later. But above all it was affordable. £25k per unit. Hell at that price we could buy 2!
It turned out that the £25k ones had gone (what a surprise), apparently a Japanese investor had bought 10 in one go. There were only 4 units left and so we spoke with the agent and he agreed to take a holding deposit on 2 units but most importantly the deposit would be refundable. I didn't know you could even do that. I double checked and triple checked that we could get our money back and transferred the £2000 to the agent.
With our fate sealed we booked flights to Estonia and arranged multiple viewings of pretty much anything that was in our price range. It was strange how our price range had suddenly grown. From £30k we were now looking at 2 units at £34k each. And under the expert tutelage of the estate agents all of a sudden we were looking at pretty much anything under £100k.
Tallinn is gorgeous. In the bright spring sunshine everything was shiny and happy there. All the people were 7 foot tall with shiny blond hair and healthy glows. Everyone looked liked they'd stepped out of the pages of Glamour or Men's Health magazine. Apparently Estonia had always considered itself more part of Scandinavia than the USSR and although I'm not a scientist the genetic family tree appeared to be obvious - and even better as we walked through the indoor market people spoke to me in native tongue, for a nanosecond people thought I might be part of the shiny happy people clan!
We had booked a full day with the estate agent the following day. She picked us up at 9 in the morning and we spent most of the day viewing property. I had made a point of us both bringing a suit so that we would project the image of serious property investors instead of scummy layabouts which is the image we normally project.
We went to the first property but were not allowed in. The building was bright pink. Not cerise or anything interesting but just sort of blamange pink. It was about 8 minutes from the old town/town centre but next to a hospital and in all honesty looked like a 1970s tower block from a council estate in Slough and didn't really do anything to excite us. We then went to the next one and had a similar sinking feeling. Again we weren't allowed in the building, there was no show flat despite being very near completion.
In fact it was only when we got to property 4 we were actually allowed in. Only it turned out this wasn't property 4. The estate agent had taken a wrong turn and had taken us to a house which wasn't on her books. The thing is it was the first one to actually excite us. For the first time we felt like we were actually doing a positive thing and the fact that we had paid over £2000 to even get to Estonia didn't seem like an incredibly stupid idea.
We were taken to the real property 4 and it was a house. A little bright yellow cottage. It was only one bedroom, with an open plan bathroom/bedroom. But it was lovely. Bright and airy with lots of windows and a homely feel. It was £87,000 but you actually got the feeling that it was worth it.
It was somewhere you could come home from work and enjoy being there, although having said that it was blooming small. Our house in London had only cost £86,000 and it was three times the size of this one.
The last property we saw was right in the centre of town. A 2nd floor apartment in the heart of the town, walking distance from the Old Town. It was a studio apartment with a balcony, gorgeous wooden floors and floor to ceiling windows along the whole one wall. This was an impressive apartment, and there was the possibility of creating a separate living space turning a studio into a one bed.
On the downside, the balcony wasn't big enough to put a chair out there let alone a table set. There was no kitchen and no bathroom installed. Apparently this is the norm when buying in Estonia. Kitchens and Bathrooms are not included in new build purchases. It's considered a personal choice. The developer will put you in touch with recommended kitchen and bathroom fitters but it's nothing to really do with the developer. The apartment was 94 sq foot and cost £94,000.
Our plan had been to move to Estonia and teach there for a couple of years and then rent out the property when we once again got itchy feet.
We asked the agent about the rental market as we had read that the average Estonian wage was £1 an hour. The agent laughed at us and said the Estonian's don't rent property. They live at home until they are married and then they move into a house together if they can afford it. So who would rent something like this? Apparently you would either rent to Finnish businessmen who were over for 3 or 4 days at a time or to property investors mainly over from the UK and Ireland who were looking for property.
Can you say "Bubble market?"
The next day we visited Estonia's second city. Despite it being April there were large chunks of ice, which with our East London, low expectations we assumed were slabs of Styrofoam, littering the sea. In winter the whole sea freezes over enough for cars to drive on.
Although the area was a lot more affordable when we saw our off plan plots we realised why. 14kms from the sea is not a lot unless there is nothing except wasteland between you and the sea.
It didn't take a genius to work out that if building was as rife here as in Tallinn that 14km would soon be filled with a million different developments, all of which would have a better selling point than us. Equally 14kms in another direction lay the nearest shop so our holiday makers would have to drive about 15 minutes in order to get a packet of cigarettes.
Good job we had that refundable deposit.
So all in all Estonia was a bit of a wash out. We'd seen 16 properties in 2 days and still had another 7 days to go but as we grew more and more disillusioned we found ourselves at a bus stop. The journey was just beginning.