Gross income yields vary between 2.7 per cent and 8.6 per cent with an average 4.6 per cent (based on average occupancy rates of 18 weeks in Europe and 23 weeks elsewhere), with highest rents being achieved in the established holiday destinations such as Italy, France and Greece.

Increasingly, Brits are choosing to self manage the rental of their holiday home online, dealing direct with travellers to cut out the middleman and save on commission and fees, said the report. Holiday-Rentals.co.uk estimates at least 25 per cent of British holiday home owners are currently renting out their homes directly online.

Savills estimates there are up to 400,000 overseas properties are owned by the British investors. Over half of second homes abroad are in Spain and France, although there is increasing investment is new and emerging areas including Croatia and Bulgaria.

Owners of second homes are typically aged between 45 and 75 with purchases often being funded out of personal capital or out of the equity built up in the owner's primary UK residence.

A seaside or scenic location is a key consideration for purchasers and affects both prospective investment return and enjoyments of the property by owners who have acquired property predominately for their own use.

Price premiums for properties in locations served by low cost airlines can be as high as 37 per cent.

‘Our survey suggests that investment motives are driving the majority of overseas second home purchases with the owners’ use of the property (whether that be for use as a holiday home or in retirement) often a secondary consideration’, said the report.

‘Of the financial considerations, the rental potential of the property is the single biggest consideration, although in aggregate, factors that determine capital growth tend to dominate.

‘The most important physical attributes of a property relate to its ability to service the tourist market in that location. Attributes such as proximity to the sea and whether a property is in a scenic location are key considerations for buyers. These attributes also reflect the requirements of those who are buying for leisure and retirement who will have a greater personal use of the property’.

Properties located within ‘emerging tourist destinations’ have seen the biggest increase in value, said the report.

Emerging areas such as the Dalmatian Coast in Croatia have experienced an average annual price increase of over 20 per cent per annum over the past five years’.

• Traditional ‘second home in the sun’ holiday destinations faced stiff competition from popular emigration destinations such as Canada, Australia and New Zealand in this month’s HIFX Global Property Hotpots report.

‘We often see an uplift in the number of emigration enquiries around this time of year as people emerge from the British winter and are keen to realise their dreams of a new life abroad before the year is out’, said HIFX’s Mark Bodega. ‘This month we have seen an increasing number of enquires for the ever popular emigration destinations of Canada, Australia and New Zealand’.

The percentage of enquiries relating to buying in Australia have doubled since the beginning of the year and more than doubled for New Zealand.

‘With a typical three bedroom detached property in New Zealand costing £100,000, no stamp duty or capital gains tax and year on year capital appreciation of between 10 and 15 per cent, it’s easy to see why so many of us are upping sticks and moving out there for good. A paradise for lovers of the great outdoors, the lifestyle on offer is healthy, fun, and affordable’, says Bodega.

However, most March enquiries to HIFX concerned France and Spain.

• With sterling at its highest level against the US Dollar since September 1992, now is a good time to complete planned purchases of properties in the US and and other countries where the dollar is the currency of choice, said HIFX.

'Speculation that the US will be forced to cut interest rates to stimulate the economy has weighed heavily on the dollar’, said Bodega. ‘There has been a lot in the news about the benefits of shopping stateside, but people looking to buy property in the USA, Caribbean, China Malaysia, Belize and a whole host of other emerging markets, should also look at financing their purchase now. It’s worth remembering that the last time the pound traded consistently above $2 was in 1975’.