Still-sunny prospects in cooling market

First, the bad news: most analysts expect the slowdown on these shores to be reflected on the Continent, so there won't be any massive short-term gains to be had.

"Around 150,000 UK residents bought property abroad last year, and the forecast for 2008 is a rise to around 165,000, so that's pretty buoyant," said Richard Exton, director of Barclays Buying Abroad, the bank's division dedicated to buying property overseas. "In recent years we've seen growth of as much as 25% in prices in traditional markets like southern Spain, but there's an acceptance that that will slow down."

However, Exton is upbeat. There is, he believes, an opportunity for buyers in a cooling market. "Relative value and growth potential in the medium term are still there," he points out. "The average UK detached house price is around £350,000, and you will get far more for that in the mature markets like Spain.

"While there is that difference between what you get for your money here versus abroad, there are still acceptable returns for investors. It's the same with any market that is cooling down: for the prudent buyer there's an opportunity. People focus on quality and it becomes a buyer's market."

There is no doubt that things have improved for those looking to buy in Spain. The Costa del Sol had begun to gain a reputation for hurriedly (and sometimes badly) built apartment blocks, sold by unscrupulous and unlicensed estate agents and developers and, unfortunately, snapped up by buyers who seemed to take leave of their senses.

And, frankly, the Costa del Sol suffered from an overdevelopment which has seen prices in some areas (the developments for the super-rich in Marbella and Puerto Banus were largely protected from this) fall sharply by comparison to other traditional markets.

So the overdevelopment of certain traditional, areas allied to a cooling in the market, have moved the goalposts for the discerning buyer. "What we are seeing is a change in the traditional locations," says Exton. "That's why the focus has shifted to quality in regions like Murcia in the south and the Basque country in the north. Discerning buyers are looking for quality and amenities, and also looking for a flavour of the local lifestyle."

Murcia is a good example. Relatively undeveloped while the Costa del Sol to the west was overrun by concrete, it has recently been the focus for big developments on arable land. The La Manga Club resort was the dominant force in the region, a luxury proposition with stunning golf courses, and for a long time had the Costa Calida (warm coast) to itself.

But other players have entered the market, and in one case in a big way, over the past three years. Polaris World is that player. You've probably seen the advertisements featuring Jack Nicklaus.

The most startling thing about Polaris World's development is the sheer scale of its operations. There are three luxury developments complete and four under construction. Polaris World has sold, so far, some 7000 homes.

The idea is a little different to other developments in Spain. Polaris World owns pretty much everything to do with their resorts: the building company, the petrol stations, the shops, the furniture suppliers, a hospital, an international school, a huge garden centre and nursery, a winery and olive groves. The list goes on. In fact, Polaris World is made up of 63 companies with nearly 6000 employees.

Jack Dunn, based in Scotland, is an authorised agent for the company in the UK. He said: "The Costa del Sol was overdeveloped over the years, so buying off-plan with Polaris World offers some affordable luxury in new homes. Two-bedroom apartments start from £80,000, although you can buy big villas for up to £1 million. Polaris World offers all the services a buyer could conceivably want. They'll service your home, rent it for you, even sell it on for you. We can also advise on buying a property key-ready - that is, one that is already complete. And there's a level of comfort and reassurance that comes with dealing with a major company."

Dunn also offers free viewing trips for prospective clients, and buyers can visit Polaris World's futuristic head office to view scale models of each development and see exactly where their property will be sited in relation to other properties and the communal amenities.

Polaris World's rapid development of farmland in Murcia has not been without controversy. There has been a severe shortage of water in the region, but the company is committed to recycling as much water as possible and installing desalination plants. And that water will be needed for the nine golf courses across the resorts, grouped under the Nicklaus Golf Trail brand. Six of the courses are designed by Nicklaus Design and three are Jack Nicklaus Signature courses, designed by the world's greatest golfer.

As far as making a return on your investment goes, Dunn identifies some key points. "Firstly, your home should be on a golf course. Golfers extend the rental period greatly if you are buying to let. But there are so many courses in southern Spain that the course itself must be recognised. That's why having the Nicklaus Golf Trail is a big plus for Polaris World.

"The resort has to be big enough in terms of amenities. Polaris World has shops, bars, restaurants and pools, and there are five-star InterContinental hotels on three of the developments. And, if you are looking to rent your property out regularly, it should be within 20 minutes of an airport. That applies to all Polaris World's developments."

Exton agrees when it comes to amenities. "The facilities and amenities, particularly if you are buying as an investment to let, are really important. Your needs for using a property as a holiday home will quite often differ from the needs of your prospective tenants, so make sure you know why you are buying the property."

As an example, an hour's drive from the airport and infrequent flights may not deter you from visiting your dream home, but those are two factors that can put off prospective tenants.

The help on offer for buyers from the UK is far more sophisticated than in the past. Abbey, for example, is owned by Spanish banking giant Santander, and is therefore in a position to offer specialist mortgages for buying in Spain.

Barclays Buying Abroad offer a range of services. They can put together a range of mortgage products, and also help guide you through the local laws, which can differ hugely from the UK's. As an example, in some cases debts can transfer with a property. So without the right advice, you could buy your dream home and discover that you are liable for a previous owner's debts.

Another aspect to which many buyers don't pay enough attention is currency fluctuation. "We can manage exposure to this through our overseas payment service," says Exton. "But you must include in your budget the chance that the difference between the pound and the euro can change quickly. In fact, over the past 12 months, there have been times when the pound has weakened against the euro by as much as 14%."

Finding a home in Spain that is guaranteed to be sold by a licensed estate agent is also much easier for Britons than before. The National Association of Estate Agents has a foreign property website where you can search by country and be guaranteed that the vendor is a licensed estate agent.

Barclays have joined forces with Grupo Facilisimo, one of Spain's largest property portals, to create Pearl Overseas. It offers buyers new and off-plan properties. It also offers all services in English, price commitments, deposit guarantees. Crucially, the Pearl Overseas alliance also includes DLA Piper, a global law firm which completes due diligence on every property before it is offered for sale.

Despite an expected slowdown, however, property in Spain, and particularly in the non-traditional markets, can represent a sound investment. Off-plan properties such as those in Polaris World's developments also represent good value for money.

But with 50% of overseas buyers last year purchasing purely for lifestyle reasons alone and not looking for rental income or resale value in the short term, perhaps the average 330 days of sunshine is all the reason you need to buy in Spain.

Barclays Buying Abroad www.barclaysbuyingabroad.co.uk Jack Dunn can be contacted at info@polarisworlduk.net, on 07712 888779 or through the website at www.polarisworlduk.net. For more general information on Polaris World visit www.polarisworld.com