The dream of owning a holiday home abroad is a difficult one to shake. British buyers have helped fuel a global property boom - from Tuscany and Tangier to Burgundy and Bulgaria - which has, of late, come to a stuttering halt. Even in the popular hotspots of the south of France and central Italy, prices are falling and following the same downward trend as the UK.
Almost half a million Britons own a second home overseas; for a lucky few, it may still be an affordable luxury, but for many more, a second home, wherever it is in the world, has become a financial - and emotional - drain. Lured by promises of capital appreciation and rental yields, buyers piled into the fly-to-let market, investing in off-plan properties, only to find themselves trapped in negative equity, sometimes without a house to show for it.
However, sterling has rallied from its lows and owners are cutting their prices. So could someone else's misfortune be your chance to buy a holiday home in the sun?
SPAIN More than a third of all foreign holiday homes bought by Britons are in Spain, according to research by Savills. But it may take another decade for the Costas to recover from overdevelopment of the 1990s. So those rows of empty flats are probably worth avoiding, however low their price. Even so, there are some great bargains in prime locations. New-build on the beachfront is unheard of these days, due to the new coastal laws, but some Malibu-style three-bedroom houses, right on the sand, remain unsold at Playa Marques in Almeria, Andalucia, and are now discounted by 25% to £393,000 through the Almanzora Group (01242 680116, almanzora.com). The British-based developer will even throw in a pool and £5,200 for garden landscaping.
In the nearby resort of Desert Springs, Europe's only desert golf course, two-bedroom flats have been reduced by as much as 30%. Prices start at £155,000 for a two-bedroom flat; three-bedroom villas (with private pool and gardens) are from £523,000, also through the Almanzora Group.
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For those seeking old-town charm, Jerez, with its historic streets of sherry bodegas and shady squares, is perfect, and a good base for exploring the Costa de la Luz. Many of the properties that Mercers (0845 017 7805, spanishproperty.co.uk) has on its books are nearly half price. Among them are a three-bedroom flat in a converted bodega in the centre of town, on sale at £166,000, down from £284,000, and a large, high-ceilinged two-bedroom flat, carved out of Jerez's ancient fortress walls, that has been reduced by £70,000 to £131,000.
"I have a vast database of British buyers asking to be kept updated on new property coming onto the market around Jerez," says Jason Baez Sulsona, a property consultant for Mercers. "They are anxious to flex their buying power and take advantage of a depressed Spanish market, which will probably be one of the last in Europe to recover." For rural fincas at knock-down prices, Sulsona suggests Mazarron on the Costa Calida, a region that has attracted a lot of British buyers, many of whom are now prepared to sell at big discounts. "You can expect discounts of 45% now. You can buy two-bedroom villas in Camposol for as little as £47,000," says Gerard Rees, director of Mercers' Mazarron office.
The Balearics, too, are throwing up the odd bargain. David Ponsford, a property developer from Bath, has knocked £87,000 off the asking price of his holiday home, a clifftop four-bed villa in Minorca, on sale through Engel & Völkers for £432,000 (0800 917 6095, engelvoelkers.es/menorca).
FRANCE British vendors across the Channel are presenting potential buyers with some original properties at discount prices. Since Wendy Hindmarch put her converted 14th-century chateau in the Lot on the market a year ago, her children have left home and she and husband, John, who run a property renovation business, have bought a nearby barn conversion to downsize to.
"We're ready to move on," she says, so they have knocked 26% off the asking price of the house, now on sale for £568,000 through Winkworth France (020 8576 5582, www.winkworth.fr). Set on various terraces, with views across the Dordogne valley, the property has five bedrooms, including two in a tower. "At that price, it will fly," predicts Roddy Aris, the selling agent.
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There is also great value to be found in Brittany, spurring "an unusually high number of buyers and viewers from a financial/banking background", says Mary Hawkins from Leggett Immobilier (08700 115151, frenchestateagents.com), which is selling an idyllic pair of renovated stone cottages, with four bedrooms in total, near Rohan, on the Nantes-Brest canal, reduced by 30% to £234,000 for a quick sale. An entire hamlet, also in the Morbihan area of Brittany, with three two/three-bedroom furnished cottages, each with a pool, has been cut in price by 20% to £601,000.
"Bretons are selling their traditional houses and opting instead for newly built bungalows, so there are a number of stone cottages that are competing for potential buyers," says Hawkins. "We are also seeing long-term English residents in Brittany now wishing to return to the UK and selling their French homes at less than current market value to secure their foothold on the UK property ladder once again."
Britons in the southwest of the country appear to be following suit. Nicholas Barnes, a partner at Knight Frank's international desk, says prices in popular second-home spots have dropped by 20% from their peak. "The weak pound has cushioned the blow for sellers, and in that part of France we've noticed that British vendors were willing to drop the price substantially if they are taking their money back to the UK," he says.
ITALY Italy has avoided a Spanish-style collapse in prices, but it is still possible to get big discounts on properties owned by Britons selling up.
Edward Mayhew and his wife, Sonia, ran their 10-acre Tuscan estate in the Florentine hills - with a 15th-century, six-bedroom house and three cottages - as a wedding venue. Following Sonia's death last year, Mayhew has reduced the price by nearly 50% to £2.040m, as he hopes to move to nearby Florence. It is for sale with Aylesford (020 7349 5100, www.aylesford.com).
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"Most properties have fallen in value by about 20% locally, although it is hard to tell, as most Italians are trying not to sell until the market recovers," says Mayhew. "I'm philosophical about having to drop the price so much. It's simply a necessity if I want to sell."
Also substantially discounted is a new-build five-bedroom house near the market town of Bassano Romano, 45 minutes from Rome. Down by 39% to £804,000, it is on sale through Cluttons (00 39 075 845 0100, cluttons.com).
PORTUGAL Prices on the Algarve, a perennial favourite with British buyers, have held up fairly well, especially in established resorts such as Vale do Lobo. But there are discounts: newly completed flats in the Lagos Panoramo development, on a hilltop overlooking the marina, are priced from £242,000, 20% below bank valuation, through Property Frontiers (01865 202700, propertyfrontiers.com). Buyers also receive 7% cash back, which will cover purchase taxes.