Viva Estates had 15 offices across southern Spain and was selling 2,000 properties a year.

Viva is down to one office and sells 200 homes a year if it is lucky. “It’s as if we’ve been hit by a tsunami,” says McCarthy, who is focusing on Hot Properties, a magazine he has set up to help people sell privately. “The property boom was over by 2004. Chris McCarthy, a Briton living in Marbella, set up Viva Estates, an estate agency aimed at selling property to the hordes of his fellow countrymen keen to buy on the Costa del Sol. At its peak, the company had 15 offices across southern Spain and was selling 2,000 properties a year. Last year, it was oversupplied, overpriced and illegal, then came the Spanish property market collapse, the US sub-prime crisis, Northern Rock, followed by UK house prices falling, rate increases, the mortgage freeze and the stock market collapse. It’s been like wave after wave hitting us.” Spain – and especially the south coast – consistently tops the list of the most popular overseas buying destinations for Britons, with an estimated 65% of the properties sold each year on the Costas going to UK buyers. With the British market in trouble, the Costa del Sol is feeling the draught. While the value of their own houses in Guildford and Birmingham is at a standstill or even falling, people are less willing to invest in a holiday home abroad. Other places popular with Brits, such as Florida and the Caribbean, are also beginning to hurt. Even in the south of France and Italy, markets are taking a knock, thanks to the strength of the euro, which has risen 15% against the pound since September, adding to the cost of buying. Couple this with tighter mortgage conditions for borrowers at home and abroad, and the picture is far from rosy. “There has definitely been a slowdown in the normal sales rates that one might expect,” says James Price, head of international residential development at Knight Frank. “It’s taking longer to get people to commit. There needs to be a compelling reason for them to buy abroad.”
“Super-prime property appears to be relatively unaffected by the tightening of lending conditions,” says Price, although he thinks even the top end of the market in most countries will begin to slow as turmoil in the financial world hits confidence. He warns: “The next 12 months will see a gradual slowing of price growth in the main international buying destinations, especially France, Italy and the Caribbean.” So what is really happening in the six most popular overseas destinations, and what should you do?