Spain is sometimes accused of being over-developed due to its status as a country that is both a popular holiday destination and theatre of investment...

While that may be fair to say of some of the more intensive investment areas - such as the Costa del Sol - it is an unfair generalisation to make of a country that has so much more to it.

Consider, for example, the verdant countryside that surrounds Barcelona, Spain's second city. Protected by legislation that ensures it will not be harmed by over-development, it can be found "about five minutes outside Barcelona in the countryside and mountains", according to property adviser Off-Plan International.

Best of both worlds

A spokesman remarked that "since you are near a major city, you've got the best of both worlds". He advised investors that they can tap into the local rentals market as well as the holidaymakers market.

"You should be looking somewhere like Barcelona - you can look into the local market, people working in the city that want to live in the countryside," he said.

According to Off-Plan International, Spain is "still a popular place for Brits to invest", but the pure investment market has somewhat given way to holiday or second home investment.

However, there are areas which are just approaching the peak of development and are in competition with other similar areas, which means that the professional investor can still find plenty of pure investment opportunities.

The spokesman said that investors have switched from looking to make short-term gains to "looking at capital gains over a longer period of time - rather than people investing and wanting their return back quickly, a lot of people are buying in a more educated way".

UK buyers ‘know the country’

A report on the 2006 property market from the Association of International Property Professionals (AIPP) shows that Spain and France are still the top two markets for Britons buying abroad.

Just under a third of all overseas properties bought by British buyers last year were in Spain. Considering that France took second place - with a fifth of overseas property purchases - it shows the overwhelming popularity of an Iberian investment with Britons.

"This report confirms that, despite the massive increase in emerging markets, half (50.5 per cent) of overseas property purchases by UK buyers are in a country they know, one in which they have spent many holidays and, possibly, learnt the language at school," said an AIPP spokesman.

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