As first-time buyers find themselves increasingly unable to get a foot on the British property ladder, many are looking to the overseas market.
This is according to independent market analyst Datamonitor, who found young people are being forced to invest in property in Spain and France in the hope that they will eventually make enough gains there for a deposit to buy at home.
Over the past five years, the number of first-time buyers in the UK has fallen. In 1999 they accounted for 47 per cent of the market, with that figure decreasing to 29 per cent by 2003.
A financial analyst with Datamonitor, Karina Purang, says: "First-time buyers are attracted by the possibility of realising profits by buying at relatively low prices in less popular regions and selling when property prices start rising due to an increase in demand."
She backed the scheme, saying: "Such speculation, if successful, can lead to significant profits, which can then be used towards the deposit for buying a property in the UK."
According to industry estimates, two million Britons currently own a second home abroad. Most have bought retirement homes, but an increasing number of purchases are being made by young people.
Ms Purang added: "House prices in the UK have rocketed during the last few years and many average-income earners have been able to enter the overseas property market by withdrawing equity in their UK property for a deposit."
The most popular locations to buy are still France and Spain, but Florida, the Caribbean and Eastern Europe are all experiencing increased demand.
© DeHavilland Information Services plc