Portugal - A magnet for British Buyers

Still no4 on the hot spots list!

There are many reasons why Portugal is increasingly popular with overseas property buyers. It has weathered the global downturn better than Spain thanks to tighter lending conditions and stricter planning laws which have helped to prevent over-development. Tourism in Portugal is strong too (the country welcomed 11 million tourists in 2009), particularly in the Algarve and increasingly along the likes of the Silver Coast, so property rental opportunities are abundant. Low interest rates and the falling value of the euro have also made it more affordable.

Another easy draw is Portugal's great climate, but accessibility is also contributing to its popularity, with a wide choice of flights to Lisbon, Oporto and Faro from the UK. It's perhaps no surprise therefore, that A Place In The Sun magazine named the country as the fourth top place to buy a holiday home in 2010.

As one of the world's most established overseas property markets, Portugal is not dependent on the British - buyers from Europe and Russia have also helped the market to remain very buoyant. Even so, there are still bargains to be had, particularly where developers are struggling to sell new properties. When it comes to distressed property, you may be able to do some further haggling, but these are reducing in number and the bargains won't last forever. The highest prices are found along the highly sought-after central coastline, but are lower along the less-developed western Algarve, especially if the property is inland from the coast.

The outlook for the country's economy is positive as well - figures from the first quarter of this year show that Portugal had one of the strongest recoveries in Europe, and it's predicted to have a three-percent growth each year until 2017.

Clare Nessling, operations director at Conti, the overseas mortgage specialist, says: "Portugal is a big hit with British buyers right now, and with mortgage rates starting at just 3.39 per cent, it's a good time to invest. It moved up to fourth place in our hot spots table last year, and has firmly held on to that place ever since."