There is enormous pleasure to be gained from buying a holiday home abroad but you need to avoid some of the pitfalls…

A range of factors in recent years has made buying a holiday home very attractive to Britons. The biggest factor of course is the ever-growing value of homes in the UK. Comparisons with property prices abroad generate interest and with stories about equity release in the media almost every day, more people realise that a home aboard can be financed easily. There is a feel-good factor in the economy too, as more people are earning a good enough salary that they feel they can afford a few extra luxuries.

The abundance of TV programmes devoted to buying homes abroad has also had its impact, titillating our otherwise dismissive day-dreams and making everyone aware just what can be brought and the value of properties in almost every European country.

Cheap no-frills air flights have made travel to overseas destinations much less expensive and more convenient. And the communications explosion with mobile phones and e-mail has made working abroad feasible both for extended holidays and permanently.

Britons now like the idea of living in the sun, many are buying holiday homes with dreams of retiring to the property later. Once the domain of the middle-aged, younger people can now afford to buy abroad and see the advantage of owning a second property. But here the emphasis is more on sport, often leading to them buying mountain apartments in ski resorts.

Apart from the pleasure and satisfaction of owning your own holiday retreat there will be pleasure in spending time there with friends and relatives. Every trip will supply fresh moments of joy and there should be plenty of opportunities to make new friends if you pick the right location. For the stressed out, the idea of a bolt-hole can lend years to an ailing relationship with a difficult employer. Just knowing you can throw the towel in at any time does wonders for reducing the stress level!

Talking about stress, Alliance & Leicester International (ALIL), the offshore savings bank recently conducted research in conjunction with think tank, The Centre of Future Studies and says reducing stress will be the key trigger leading Britons to contemplate emigration. Not holiday home buying, but full-scale change of life. They say it will be an even stronger motivation for people working long hours in pressurised, highly paid, occupations such as those working in the City. And it will be those destinations that place a greater value on leisure and lifestyle that will become more attractive such as Australia, Canada…and Scandinavia!

The study shows that one third of Britons are considering moving abroad to work or live. The reasons given for considering moving overseas include:

• 39 per cent searching for a better quality of life
• 38 per cent hankering after new experiences
• 25 per cent relishing a new challenge

Viewing trips are a vital part of buying a home overseas. The main reason, of course, is to allow viewing of available properties, enabling you to compare properties in their settings and to make an educated and considered decision on the type of property that will suit you best. Secondly, it is crucial to know where you are buying, and to explore the different regions.

This should all be pleasurable too, but there are a number of simple rules to follow if you want to get the maximum pleasure and value out of your purchase. Here are some recommendations:

Avoid timeshares - the extra charges tend to be high, they can be difficult to sell, you can't borrow against the asset, and they mostly represent poor value. Timeshare people are very pushy and can ruin a good afternoon, if not a holiday. This may give you the idea that viewing property abroad is all pushy, but nothing could be further from the truth.

But do your homework – don’t act on a holiday whim. Speak to people who currently live in the area, visit out of season and investigate the travel options of getting to your chosen location.

If you plan to view holiday properties from a sales talk in the UK, by all means take advantage of viewing trips but make it clear at the start that you want time to view other properties by yourself. Better, given the low cost of flights, to arrange to meet with the agent while you are there.

Always allow yourself a cooling off period. Never sign a contract on the spot, especially one you don’t understand.

Pick a location first, or several, if you can, but not too many. This will eliminate some of the choices, making a comparison between properties easier. It’s better to choose somewhere close to convenient transport links - fairly near an airport or port serviced from the UK - and make sure it's a facility that will not be suddenly abandoned or restricted out of season. Some obscure French airports were dumped unceremoniously by Ryanair recently.

No matter where you are thinking of buying, think carefully about the surroundings - not just how pretty or smart it is, but how it meets your particular needs. Children need things to keep them occupied, adults need bars and good restaurants. And what about neighbours, clubs, shopping - you won't want to get the car out every day just for a newspaper, but holiday guests might.

As for getting a good deal it is better to buy through a local estate agent rather than through a British firm – many speak English but even if you have to get advice to help speak the language, you are less likely to be charged marked-up prices.

Always use qualified professionals who are proficient in your chosen country’s laws and processes. Find a good solicitor and surveyor fluent in both English and the native tongue.

If you get a mortgage, borrow in the local currency - that way you match your assets and liabilities. Otherwise you risk seeing your debt increase and your property value fall, thanks to adverse currency movements.

Research all legal issues and costs involved up front. Consider opening a native bank account to ease payment transfers. Check out the tax laws of the country you are buying in as there may be strict rules if you rent or sell the house

Seek specialist advice from independent solicitors and architects (whose offices should not be close to the intended purchase, so as to ensure impartiality), who should be both proficient in their chosen country's laws and processes and also know the specifics involved in buying a property there.

Get an independent valuation. Do this before proceeding with the purchase so problems such as subsidence, damp, wiring defects or boundary disputes are revealed.

Try to avoid the purpose-built developments aimed at tourists - the charm of buying abroad is the opportunity to experience life like the locals. So choose somewhere among them, not stuck in an ex-pat community.

Buy somewhere that your friends and family will want to visit - unless you emigrate, you won't be there all the time, and letting others use it is a great way to get a better return from your asset.

The running and repair costs of property are material, and for the adventure to succeed you must enjoy your property. Apart from unforeseen costs in the buying and furnishing there may always be other items. Make sure you have proper second home insurance for real accidents, but also make sure you can afford to maintain the property. Research the cost of weekly swimming pool cleaning and potential costs of a new pump or filter for example. Peace of mind is worth it’s weight in gold.

Be prepared for a drawn-out buying and selling process. Ask locally how long things will take and ask too what things could make it take longer. Conveyancing seems to take ages in Britain, but in many countries it's even slower.

Protect your deposit. If a purchaser is arranging finance on the property this should be stated in any contract. This is because if an 'opt-out clause' is given and the loan is not agreed, this will ensure any deposit previously paid is refunded. You should also try and arrange the mortgage finance 'in principle', before agreeing to purchase, or before signing any contracts and paying a deposit.

Don't tackle a renovation project unless you can devote yourself to it full-time. Building works can be a nightmare even if you're in the UK and living on site - a job carried out in a foreign country is bound to go over budget and time.

Ensure you don’t inherit a debt on the property before you purchase – unlike in the UK, you could well be liable for the full amount

Finally be aware that properties values are inflating abroad too. Recent research by Barclays showed that Britons are contributing to high foreign house inflation by spending our equity release money on homes abroard.

In 2003 alone, 40 per cent of all dwellings built on the Spanish Costas were bought by the British and of those 63 per cent were bought for holidays or retirement, helping increase prices on the Spanish Costas and in the Balearic islands by 21 per cent year on year – this is triple traditional house price growth of around six to seven per cent.

A similar story is seen in France where in the past 12 months second home hot spots have seen property prices increase significantly, for example by up to 28 per cent in Languedoc Roussillon, which is almost triple the national average house price inflation in 2003 (11.3 per cent).

Not all regions listed for Spain. The historical average house price inflation in Spain is 6-7 per cent.
Source: Aguirre Newman and Barclays Spain.

Note not all regions are listed for France. Average house price inflation for all of France is 11.3 per cent.
Source: FNAIM and Barclays France