Thanks for that Carl.

Sorry it's too big to post here. Basically it raises fears of a crash in Lithuania. I would be interested in your views.

I believe Lithuania has 92% home ownership. That doesn't sound great for rental yields. It may be impossible to let out a house.

Has anyone done research on this?

Whats the link to that article Roland, I wud b intersted in reading it?

The reason for the 92% home ownership relates to the last actions of the russians. basically they gifted all the state property to the tenants. As everywhere purchase comes down to location. The locals wants apartments in the new build areas where there are not existing soviet blocks. They want to able to say I live in xxx and everyone will know they live in the new build areas and therefore must be doing well. status etc. Personnaly I have not purchased there. I was so badly treated my the local estate agents, that I felt if that was how they treat me when I buy - who knows what it would be like when I try to sell. There are so many fees and pitfulls I felt it was just not worth the risk. I will carry on buying UK stock. My liverpool portfolio is up 20% in the last year so more of the same, easier to buy, easier to rent, no sisidising the property and easy to sell.

I can't give you a link as it is subscription only. I can email it to friends tho'

Hi Roland, Are we allowed exchange email addresses on this forum?

Property secrets do not allow sharing of email addreses If you add your email address to a post, PS will delete it. Frankly this is daft. I sent a email requesting my email address be forwarded to another member and was told this was against dat protection rules. What cobblers. It is against PS own rules.

Hi Ken I'm afraid that posting any personal contact details (tel no/email etc) is against the forum Terms & Conditions. However, Roland is free to post the link and leave it up to individuals to subscribe or not to the FT. Sorry about that.

NEVER before has eastern Europe enjoyed such good fortune. Most of the region is anchored in NATO and the European Union; it is prosperous, stable, democratic and secure. GDP growth is surprising everyone. Even a supposed sluggard such as Macedonia is growing at 4%, much faster than “old Europe”. In most other countries growth is above 5%; in the Baltic stars of Estonia and Latvia it is over 10%. Yet the mood is surprisingly gloomy. Across the region, millions have left to work abroad, sending wages soaring, threatening competitiveness and worrying investors. Countries not yet in the EU fear that even rapid reforms may not help them join. In the ten ex-communist countries already in the club, reform has largely stalled. In Romania the political discipline that preceded accession has ended spectacularly. In Slovakia reforms may be reversing. As for the euro, nowhere in the region looks likely to follow Slovenia's example and join soon. The immediate fear, stoked by choppy markets and memories of financial crises in East Asia in 1997 and in Latin America more often, is of an economic crash. It might start in the Baltics. This week Fitch, a rating agency, warned Latvia that it faced downgrades if it did not get its economy under control. In 2006 Latvia's current-account deficit was 20% of GDP, the highest in the EU. That reflects a ballooning in foreign banks' mortgage lending to locals, denominated mostly in euros, which has fuelled a property boom. The story in Estonia and Lithuania is similar—and looks equally unsustainable. For all their gorgeous architecture, it is hard to see why the Baltic capitals should be pricier than Berlin, Vienna or Frankfurt. It is also easy to imagine how the property bubbles might pop. Construction firms are finding it hard to hire the workers they need to finish the apartments that the property companies have already paid for, using money their customers have already borrowed from abroad. In a bizarre sign of overheating, some Estonian firms are even importing workers from Finland. A harder question is what might happen next. The Baltic banks are largely foreign-owned by solid Scandinavian banks. They can afford to bail out their local subsidiaries if they need to. Only Latvia has a big locally owned bank, Parex, but it has been a relatively cautious lender. All three countries have fixed exchange rates (currency boards in Estonia and Lithuania, a currency peg in Latvia) fully backed by foreign-currency reserves. It is reassuring that none of them has much foreign debt, and that their currencies and securities are only lightly traded, creating little scope for a speculative attack. Less reassuring, however, their exchange-rate regimes leave little room for monetary tightening. And weak coalition politics undermine hopes of a tight fiscal policy or of structural economic reforms that would maintain competitiveness as costs rise. Edward Parker of Fitch says that a Baltic crash might mean that some countries have to follow the example of Portugal, which has been stuck with high costs and low growth after an unsustainable boom. That would be sad for the Balts. But need it spread to other east European countries? On the face of it, no. Only Slovakia has Baltic-style growth (an annual rate of 9.6% in the fourth quarter of 2006, with industrial production up by 17.4% year-on-year in January). It is more flexible (with a floating exchange rate) and its central bank is still soundly run. The government insists that it wants to join the euro in 2009. But some in the euro area mutter that Slovakia's low inflation will be deemed “unsustainable” when the time comes. A bigger worry is Hungary. The government is trying to regain control of public finances after a splurge to win last year's election. Hungarians have borrowed hugely in foreign currency, assuming the euro is a certainty. That creates all the conditions for a nasty crunch, with devaluation, possible default and recession. After some perilous wobbles last year, the government's austerity programme has won plaudits from bankers. But planned reforms of public spending have yet to bite, and the government has been timid in conceding higher public-sector pay. The underlying failing is weak and indecisive government across the region, which needs years of good government if it is to catch up. Romania, the second-largest east European EU member, is paralysed by a political feud between the prime minister and president. As a by-product, the upper house of parliament has voted to dismiss the justice minister, Monica Macovei. In sunny economic weather, such political shenanigans would be mere details. In a chillier climate, they make east Europe's future more worrying.