Smart Money Overseas (SMO) now offers mortgages on property on Sal and Santiago, two of Cape Verde's most popular islands for British purchasers, which will offer interest-only or repayment mortgages of up to 80 per cent Loan To Value (LTV) in euros at a variable rate of 5.35 per cent for up to 30 years. Investors would have to borrow at least 50,000 euros but there is no ceiling and they can be aged up to 75 years.

This is not the first mortgage product to made available for Cape Verde property. Since the latter months of 2006, investors of property in Cape Verde have been able to take advantage of Euro mortgages, enabling them to pay deposits in the region of 25–30 per cent and therefore enjoy higher returns on their investment.

The introductions of mortgages in Cape Verde is said to be one of the main factors behind the country's increasingly popular property market, allowing investors the potential to achieve higher returns on their investment.

According to investment specialists Assetz, people who choose to invest in property in Cape Verde can realistically achieve total returns of 40 per cent on cash invested, based on gross yields of 9 per cent and capital growth of 11 per cent, on an average two-bedroom property bought with a mortgage of 75 per cent (LTV).

"We have watched Cape Verde develop as an investment property destination with interest over the last 12 months, during which time it has shifted from high-risk into the medium-risk category of investment," says Martin Sadler, sales manager of Assetz. "As major infrastructure is developed and influential holiday companies such as Thompson Holidays and RIU Hotels are attracted to the islands, Cape Verde is fast becoming an attractive medium-risk emerging market for overseas property investors."

Kevin Fleury, managing director of SMO, also believes property in Cape Verde represents good investment potential at the moment, although also points out that buyers should not expect guaranteed income from purchasing a home in the African nation.

"Cape Verde is a great opportunity for property investment, but as always, investors should tread carefully. When you invest overseas, do your homework. Investigate key indictors of a region's economic stability and prosperity, such as whether new companies are moving into the area, new airlines are operating into the local airport, and whether property is being sold as well as available for sale," he says.

Cape Verde is just one of many African countries to be currently attracting increased attention from British property seekers. Egypt and Morocco, along with less established resorts including Gambia, Ghana and Senegal, are all tipped to become more popular with Brits looking for properties outside Europe.

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Article first published 7 August 2007