In the months of July and August, the number of mortgages issued in Spain continued to drop as domestic buyers struggle to get on the housing ladder.

Research conducted by the Spanish mortgage association AHE revealed that just over 760,000 mortgages were approved in the first half of 2008 compared with 861,000 in the same period last year, reports HomesOverseas.co.uk.

The difficulties faced by buyers in the Spanish property market and the glut of new-build homes in the country could mean investors from the UK could find a property at a bargain price.

Buyers at the higher end of the market are in a particularly strong position if they can pay for homes outright as agents and homeowners in the European nation may well be clamouring for their custom.

According to recent statistics published by the government in the UK, over 400,000 people in the country left to move abroad in 2006.