Think of emerging European property markets and your thoughts are likely to turn towards the eastern corner of the continent, and in particularly destinations such as Croatia, Bulgaria and Romania. Cyprus, on the other hand, is likely to be viewed by many as having been an established market for many years now, with locations such as Pafos and Limassol well and truly etched into the minds of those looking for a home abroad. However, both of these destinations, it is important to remember, are located in the southern half of the Mediterranean's third-largest island. Head north and you'll find a market which, up until the last five years or so, was largely ignored by British purchasers. Not that the reason for this is that North Cyprus is not as aesthetically pleasing as the south. Far from it, in fact. The North undoubtedly boasts some of the island's best beaches, especially around Famagusta Bay on the east coast, while the mountain range which runs along the entire northern coastline creates a picturesque backdrop to Kyrenia, the resort which is the main focus for a majority of the British property purchasers who buy in North Cyprus. Instead, the reason for the relative lack of overseas interest that has been paid to the north of the island over the years has been down to an ongoing complex political situation which divides Cyprus in two – Greek Cypriots live in the southern two-thirds of the island, Turkish Cypriots in the northern third. It is currently only the southern reaches of the island which are recognised as being part of the European Union, and there are trade embargoes placed on the north, which mean direct flights from the UK are currently not allowed to North Cyprus. Those who wish to enter this part of the island must do so either from Turkey or Azerbaijan.

But in spite of all these prevailing circumstances, in recent times British purchasers' attitudes towards North Cyprus have, thankfully, started to change. "Despite some of the negative press which Northern Cyprus receives due to the political situation on the island it is perfectly safe to purchase and own property here", says Peter Harrell of Unwin Estates. "As long as you follow the correct guidelines and procedures you will have no problems." Steve Fawcett of Cyprus Bay Properties is in complete agreement with Harrell. "The market in North Cyprus has opened up considerably over the last two to three years, mainly as a result of political change during that period", he says. "While North Cyprus has always had a fairly strong British expat community, even more British people are now choosing it as a second home destination instead of other more expensive, less attractive Mediterranean countries."

One issue it is essential to be aware of, however, is the land registration of a property. As Fawcett explains: "A legal issue in Cyprus which has been well trailed in the British press is the issue of land which was formerly Greek owned. "This is a complex subject and it is important that anyone purchasing in North Cyprus understands the issues before committing. There are a number of different classes of title to land in North Cyprus, some of which are higher risk than others." Fawcett continues: "However, all land and property in North Cyprus is registered (as in most parts of the UK) and with the proper legal advice a purchaser can be sure of what they are buying before they make a commitment."

A Brit haven
Unlike most of the other 'new' European property markets which have opened up in recent years, North Cyprus is currently only attracting buyers from the UK in any great numbers. Fawcett says that this is mainly due to the close links Brits have traditionally had with the island, dating back to when the island was a British colony. "Additionally", says Fawcett, "most property purchases are conducted in sterling and the purchasing arrangements follow closely those adopted in the UK. "Those who have visited North Cyprus also comment on the warmth and friendliness of the local people, which is another factor that has swayed purchasers' views", he adds.
 
By far the most popular destination for Brits currently interested in North Cyprus property is Kyrenia – a historic harbour town dominated by churches, abbeys and castles, some of which date back to when Richard the Lionheart conquered Cyprus in the 1100s. "Kyrenia's back-drop of the five-fingered mountain range, coupled with a perfect mix of modern living as well as the laid-back lifestyle the Mediterranean is renowned for, creates the perfect environment for either permanent living or a place to holiday", enthuses Harrell. "The town is steeped in natural beauty. From the various modern castles that surround it [the most impressive of which is arguably the imposing St Hilarion] to its famous old harbour, it really does have it all."

East of Kyrenia, the small village of Esentepe is currently experiencing substantial British interest due to the development of an 18-hole golf course there. According to Harrell, this development is really starting to propel investment buyers to the northern third of the island, alongside those looking for a permanent, retirement or a holiday home. "The areas close to the new Esentepe Golf and Country Club are definitely attracting more investment-minded buyers", he says. "The area has really opened up over the last 18 months, since a new coastal road was opened. Prices are more attractive in this area as the land costs are lower and the infrastructure is still being laid out, meaning capital growth could soon exceed the more established areas." At present the only other main purchasing resort in North Cyprus is Famagusta – the north's largest city. "Although this area does not have the same picturesque views as the Kyrenia area, there are some beautiful beaches which are relatively unspoilt and perfectly safe for bathing", says Fawcett.

Emerging prices
While North Cyprus may differ from some eastern European markets in the type of clientele it is attracting, one area where it does not differ in is in the low property prices and investment potential associated with buying there. "You really are spoilt for choice when it comes to the selection of properties you can get for your money", claims Harrell. "For as little as £30,000 you can purchase a two-bedroom apartment with a communal pool. Three-bedroom villas, with roughly 105 square metres of living space and a private pool, start from as low as £70,000, with the average price for a good sized three-bedroom villa being between £80,000 and £120,000."

If your budget is even more extendable, say in excess of £200,000, then you could realistically be looking at obtaining the type of property that would only be available to the most wealthy purchasers in other Mediterranean locations. "For between £200,000 and £300,000 you can buy very large properties with a high standard finish, lots of extras, situated in the most exclusive locations", says Fawcett. "Above £300,000 purchasers would, in the main, be looking at one-off individual properties designed to their personal taste in very expensive landscaped grounds with luxury features which would be associated with million-pound-plus properties in more established European markets."

As far as investment potential goes, rental returns of around 8 per cent should be achievable for most properties in and around the Kyrenia area, and there is a real chance of year-round letting due to Cyprus's 340 days of sunshine a year and the opening of the Esentepe golf course.

In terms of capital appreciation prices have been rising by more than 20 per cent in most areas over the last two years, and many experts forecast greater increases over the coming years. "Nobody can predict how the overseas market will go in the future, whether it's North Cyprus, the UK, or indeed any destination", says Fawcett. "However, I believe that the market in North Cyprus will experience further capital growth in the years to come, as the attractions of the north as a holiday destination will become more widely known, which will in turn increase the strength of the rental market." North Cyprus may still have some way to go before it catches up with the south and other European destinations in terms of its popularity among British purchasers, but for those seeking a bargain in a destination which promises guaranteed sun, a low cost of living and stunning scenery, you could do worse than look north.

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Article first published in March 2006