Schloss Bärenklau, a 1920s castle in Brandenburg
Schloss Bärenklau, a 1920s castle in Brandenburg, an hour and a half’s drive from Berlin, €3.9m

While gongs are traditionally reserved for the great, the good and the prime minister’s wife’s hairdresser, for the rest of us there is a shortcut to the lifestyle of the nobility.

For €200,000, the price of a studio apartment in London’s zone 3, you can now live the fairytale dream, in your very own medieval castle with keep.

The catch? It is in eastern Germany. And while the purchase price will secure you the dinner party bragging rights to a fortified complex with circular watch tower near Weimar, the buyer is required by the local authority to invest at least €1m in restoration and upkeep over the next five years.

After the Berlin Wall came down in 1989, many stately homes appropriated by the state under communist rule were auctioned off at rock-bottom prices. Pre-Soviet era owners had no right to contest ownership. The reunification contract between East and West Germany stated that all property confiscated under the Soviet and GDR regimes would remain the property of the state, although previous owners were allowed to buy land back at reduced prices.

Today, a property boom in Berlin is driving a market for manor houses and castles in the region, agents say. Apartment prices in Berlin rose 14.5 per cent in 2015, according to Empirica, a research institute.

Price increases are now spreading to the country house market, says Christoph von Schenck, castles expert at Engel & Völkers. The price of castles and stately homes within 90 minutes of Berlin has increased 10 to 20 per cent a year for the past three years, says von Schenck. And he predicts prices will continue to rise 10 per cent a year for the next three years. “As the capital of the strongest economy in Europe, Berlin is attracting talent. Wealthy entrepreneurs are first buying an apartment in the city, then afterwards, they look for a country property.”

Despite the demand, many former aristocratic homes within easy reach of Berlin are still “ridiculously cheap”, says von Schenck.

Castle in Saxon Switzerland, near Dresden, €435,000
Castle in Saxon Switzerland, near Dresden, €435,000

There are about 1,000 castles, palaces and historic manor houses in the former German Democratic Republic, according to Daniel Ritter of the agency Von Poll, of which between 50 and 100 are up for sale at present.

Germany was divided into small dukedoms before it became one nation state, the Kaiserreich, in 1871, explains Wolfgang Illert, of the German Landmarks Foundation. “While nobles around Vienna and Prague lived in palaces in the city, in Brandenberg and the eastern states, each village had its own gentry with their own small castle. They were farmers, self-starters.”

With the introduction of the communist land reform laws in 1945, most private castles and manor houses in the GDR were confiscated and many were turned into schools, administrative offices, hospitals or even cinemas.

After the Wall came down, a lot of castles were sold off by the state, and the market was flooded with cheap property. Owners received subsidies from the government to renovate them. Some castles have now been modernised and the original buyers want to capitalise on their investment, Ritter says. “Other estates are derelict and uninhabited. The communities have no funds to maintain them, and they are offered at a very cheap price.”

Stephen Ferrada, a British car designer, bought a manor house in Saxony at auction in 1996 for the equivalent of €25,000.

“There were hundreds of fantastic properties — I couldn’t believe my eyes. One castle after another,” he remembers. Most of them were falling down or had been converted to “horrible socialist tastes”.

Ferrada immediately sold the land that came with the property, making a profit, and rented out rooms as holiday lets to help pay for the upkeep of the house, which is now for sale. The project has been “a great passion and a great challenge”, he says. He had to adjust to the harsh winters and faced resentment because he was a foreign buyer, once ending up in court over an access row. “But mostly they said ‘better an Englishman than a West German’,” he adds.

One of two private lakes in the grounds of Schloss Golchen, near Brüel, close to Germany’s Baltic coast, €1.85m
One of two private lakes in the grounds of Schloss Golchen, near Brüel, close to Germany’s Baltic coast, €1.85m
Exterior view of Schloss Golchen
Exterior view of Schloss Golchen

The most desirable area is Uckermark in Brandenburg, a hilly region with numerous lakes and where Angela Merkel, Germany’s chancellor, has a second home. “Some people call it the Hamptons of Berlin,” says von Schenck.

The countryside within an hour’s drive of cities such as Leipzig, Potsdam and Dresden, which has a large international airport, is also popular with buyers, Ritter says.

The German agency Vermittlung historischer Immobilien is offering a 32-room neo-renaissance castle with a lake just outside Dresden for €435,000.

Farther west, just outside Leipzig, Sotheby’s International Real Estate is marketing Dölkau Castle, a 22-bedroom stately home, for €6.25m. The early 19th-century property is set within its own park and has frescoed interiors and a wine cellar.

Dölkau Castle, Leipzig, €6.25m
Dölkau Castle, Leipzig, €6.25m

Another area where prices are predicted to rise is east of Hamburg on the Baltic coast. Engel & Völkers is selling a 19th-century castle with fairytale spires near Brüel for €1.85m. The 17-room property, which is divided into eight apartments was renovated in 1998 and has two private lakes, a gym and sauna.

The agency is also marketing a 1920s castle an hour-and-a-half by car from Berlin for €3.9m. Schloss Bärenklau has marble floors, a service wing, a pool and four hectares of land.

Sitting room at Schloss Bärenklau
Sitting room at Schloss Bärenklau

While the majority of interest comes from German citizens, according to Ritter, there is growing interest from Middle Eastern and US buyers.

Helga van Horn, a travel agent from Reno, Nevada, who bought a “fixer-upper”, 13th-century castle near Leipzig for a symbolic €1 in 2014, now runs small tours for Americans who are thinking of buying a castle. The two acres of land surrounding her own property cost van Horn and her partners in the venture €119,000. They expect the cost of restoration to reach several million euros.

Despite the rising prices, buyers should be aware it can take five to 10 years to sell a castle. Even when a sale is achieved, buyers should not expect to make a profit on the investment.

“It’s about working out how you can minimise your losses,” says Bernd Neuhäuser of the agency Neuhäuser Immobilien. Castles are “for people who can afford anything”, he says. “Banks do not finance castles.”

Neuhäuser estimates that the upkeep costs of a restored castle can be as much as €200,000 a year. “But the very wealthy don’t care. They know this — they accept it.”

Some may feel it is a steep price to pay for an entrée to aristocratic circles — and of course it doesn’t come with a title.

Buying guide

● Restoration work carried out on historic properties is usually tax deductible for German residents

● Buyers must comply with state regulations on restoration work, although in eastern Germany they may apply only to the exterior of the property

● You may qualify for EU subsidies if the property has a cultural use; charitable funds may also be available in some cases

● A land tax is payable every three months

What you can buy for . . .

€500,000 A partially restored 17th-century castle near Dresden

€3m A fully renovated 16th-century castle in southern Saxony

€6m A restored castle in the north-west region of Uckermark

More listings at propertylistings.ft.com

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