An expert in the sector has stated that the property market in Spain is likely to receive help through a number of tax reforms.

Steve Laird, head of Carrington Wealth Management, told CityWire that overseas buyers were likely to find the country’s property more appealing due to plans to end inheritance tax.

He said that while the weakness of the pound against the euro had led to a decreased interest from British buyers, this could be set to change with the upcoming reforms.

Mr Laird commented: "Spain has been hit by the credit crunch the same as the rest of Europe, particularly in housing because around 30 per cent of the country’s GDP is from construction."

Despite this, recent figures released by AXA revealed that it had seen a rise of 15 per cent in the number of people looking for international medical insurance in the first half of 2008.

AXA believes that if the trend continues, the UK could lose the equivalent of the entire population of Leeds within the year.