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Over a million of us are interested in a holiday home in Spain. But how do you go about buying a property there - and what do you have to watch out for? Sarah Jagger dons her sombrero and heads for the sun to find out.

Buying a property in Spain is proving more popular than ever, thanks to the urge to escape to the sun and the arrival of low-cost, no-frills airlines. But what should you be aware of before you break open the sangria?

Espana Por Favor

Now is a good time to buy in Spain as European interest rates are low and there is a wide selection of properties available, from apartments on developed plots, farmhouse (fincas) and village locations, through to villas and townhouses.

Most Spanish property is bought off-plan, where you can put down a deposit on an incomplete home in a new development. Many of these provide common areas such as gardens, swimming pools, tennis courts and gyms, all for an annual fee.

Coastal areas, such as the Costa del Sol, are also favourites with Brits but prices there are on the up - official figures say that property prices will increase this year from 12pc to 15pc. An average villa in Marbella currently costs around GBP 250,000. If you want a bargain, look a little further inland where prices are lower. Flexible mortgages originated in Australia in the 1980s. But they didnt appear in the UK until the mid-90s when Yorkshire Bank rolled out the first flexible home loan scheme. As a result, flexible mortgages are often referred to as Australian mortgages.

In fact, they are simply mortgages which recalculate the outstanding capital and interest due on a daily basis. This allows you to make overpayments when you have money to spare, and see an immediate reduction in your loan. Some also allow you to make underpayments when finances are tight, which will increase the interest you have to pay. They may even allow you to take repayment holidays - a complete break from making payments as long as a reserve amount of money is in your account.