Attention crystal ball gazers! OK, if anyone knew for a fact what the answer is to the question below, they'd obviously be a millionaire ... but I thought I'd ask for folks predictions. (Neil actually made a prediction a short time ago that 2007 looks good for Prague). I intend to sell a rented flat in Edinburgh either in the summer of 2007 or 2008 in order to buy one in Prague for myself to live in. I am trying to decide when. Do folk think that the market in Prague over the next 18 months will out-, or under-, perform the market in Edinburgh, which, apparently, is going up quite sharply in certain areas? My Edinburgh one (2 beds, Newington) is worth cc165K; the one I will buy in Prague will cost only 100K, so a smaller rise in the Edinburgh market may still beat gains in Prague. Cheers.

Dear Richard Sorry i cant help you on your question but: I am interested in the Edinburgh market for a number of years but have never been experienced enought to buy there. 1) Do you know what sort of percentages are predicited over how many years. 2) What areas would you recommend as rising, streets etc if you know so i can start talking to local agents That would be brillient and a very great help Thank you Angelo

Hi Ricahrd - there is no reason not to invest all your £165k in Prague... ... so £100k on your home and £65k on a 1 bed buy-to-let. If so, then it comes down to Edin vs Prague property price performance. I think Prague will will hansomely. And, of course, you'll pay less tax on your gain (nothing on your home of course) - but nothing (if held for 5 years under current rules) on your buy to let property either. Cheers Neil

Neil Whilst no tax is payable in Czech Rep (after 5 years ownership) surely a UK tax payer will still get stung for the full 40% (minus any taper) over here. Won't they? Nick

Of course they will - local tax levies make no difference to the overall tax paid by the UK resident investor. The touting of local tax rates is real estate agent hype.

Hi, Thanks for thoughts Neil. Depends of course, Nic, where you are resident; I won't be a UK resident and so will miss the 40% UK cap gains tax. Edinburgh had been fairly static recently I had thought but my Edinburgh friend has recently bought there again. He bought a one bed place off the middle of Leith walk for 118K! That would have cost about 90 about 3 years ago, when the market peaked (and of course about 50 3 years before that). So not a huge increase perhaps but not insignificant. And now things are still rising so I was wondering if in fact a 7% increase in Edinburgh (=11.5K on 165K) might not beat a 10% rise in Prague (10K on 100K). [Unfortunatley Neil part of the value of the Edinburgh flat is in a mortgage!] I can't recommend particular streets Angelo since I don't know what is happening to the various districts price wise. I bought in Newington, a student area and have been very happy. I have had about three weeks void in 6 years for both flats together; both looked after well (even by all guy rents), a bit of dream let really. I would definitely favour student flats - their parents sign an unlimited warranty on damage so you have more pretection than for normal tenants. I'd recommend you go there and set up a series of meetings with agents (as I did) and get the low down. Your rental return will be not be as good as when I bought but they are going up a bit now.

Richard You can mortgage in Czech (You know that already, I'm sure). I have found it no more difficult than mortgaging in UK.

If you are not domicile in the UK or set up an offshore company/trust/accoun - it matters! Colin

Hello Richard, Since you have Scontland investment, i presume you have some good knowledge as to the buy-to-let market and capital growth. Can you please point us to where one can buy good properties with good rental yeilds, potential capital growth, good social amenities, etc. I will also appreciate it if you could indicate some post codes or town names to facilitate our research of the areas. I live in London but looking to rellocate if any good informtion about Scotland can persuade me to move. I will not hesistate rellocating. Thank you very much.

Well, I hestitate to prognosticate on the future - that's what I was asking about! As I said, Edinburgh appeared to me ot have flatened somewhat in the summer of 2003 but has since picked up (like the UK as a whole). In fact I was astonished to see some of the recent rises in particular areas - small flats in Leith Walk and Easter Road (18% in the last year), as well as larger family dwellings in Midloathian (Musselburgh, Portobello, as folk go further out to get gardens for their kids). Nowhere is cheap. If you look at the Edinburgh Solicitors Property Centre website (espc.com) at the Media Room section, they have reports about what prices have been doing. As for specific places and postcodes, I suggest taking a break up there and doing some legwork. Walk some of the areas and make appointments with agents who will be happy to sit with you and point you in some directions. They will also help you work out the rental returns. You'll also need to decide on your tenants - when I did my research 6 years ago, I was very wisely advised to go for students and young workers, not high-end professionals .... but that was 6 years ago. Check out: 1. Marchmont / Bruntsfield (classic student / posh flats) 2. Leith Walk (cheaper, still grungyish)3. Newington (my area, student, slightly less posh and cheaper than 1 - a tip!) 4. City Centre (working folk who want to get home in a tick after shopping at Harvey Nics)New Town very expensive indeed. Ditto West End. It's unclear if you are looking to live in your property (in which case you are less interested in the rental returns) or rent. My guess is that returns would not be great in many flats (3.5 % - 5%) because they are quite expensive. But that's what you get with areas of high capital appreciation.....). One thing I do know is that if you have oodles of cash, get into the large townhouse / upmarket suburban house market, where prices have just gone astronomical: folk with money and families from London relocating and wanting million quid up houses over three floors. But that would be a development game, rather than a rental one.