Estonia

Mention Tallinn and the chances are that people will immediately think of stag weekends. Every Friday evening the streets of Europe’s newest party capital fill with crowds of young British men - and a few women - drawn not so much by the glorious medieval architecture as by the more predictable pleasures of cheap booze and the wild nightlife. Yet there is far more to the Estonian capital, which makes it of considerable potential interest to the foreign investor.The northernmost of the three Baltic states, Estonia is one of the most dynamic and investor-friendly of the 10 countries that joined the European Union in May 2004, with the economy averaging annual growth of 6% in recent years. The country's property market has been one of the most dynamic in the world, with prices in Tallinn rising last year by more than 20%. Add in the easy availability and cheapness of mortgages offered by local banks and a very advantageous tax system and it is not difficult to understand why Estonia is one of the best places in Europe to invest in property right now. The only downside is that rental yields are relatively low.

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