Cape Verde has been one of the big stories for investors in property overseas in the last couple of years, with rising property prices, a plethora of new developments, new airports and new air routes including direct flights from Britain for the first time.

Such events as these have given the market momentum and built up attention and awareness of the archipelago sited off the west coast of Africa. Last week property firm Olive Tree international listed the country as one of the hottest spots for investors in 2008 for all the above reasons. 

New developments lying ahead include more infrastructure development and the prospect of Cape Verde joining the World Trade Organisation. But in line with this, those involved in the property market in the country have been keen to develop the mortgage packages available on their properties.

Assetz Ltd, one of the major estate agents offering properties in Cape Verde, has been working closely with a number of local and Portuguese lenders to ensure that smarter financial solutions are available. 

When mortgages first became available to non Cape Verde residents purchasing on the islands via the local lenders the typical interest rate offered exceeded 11%, the loan to value offered was no more than 70% and the arrangement fees were extremely high in most cases. Katy Hepworth, Overseas Mortgage Manager of the finance arm of Assetz, explains that this has significantly improved with the introduction of Portuguese lenders to the market offering 80-85% loan to value and interest rates of between 7 and 8%. 

In addition, Ms Hepworth points out that these lenders use European valuation techniques which ensure that the true valuation price is established and the mortgage is based on this real figure. Whereas previously, the primitive valuation techniques used by the local lenders led to significant under-valuations of many properties that resulted in the amount of mortgage available to purchasers being reduced dramatically.

Assetz is now working with all of the key players in the Cape Verde mortgage market to ensure that the terms and conditions available continue to be improved upon. Although the market is still young they expect to see more stage payment financing introduced in 2008 by these lenders coupled with reduced margins and fees making new developments such as Palm View on the idyllic island of Boa Vista much more attractive to investors who have been considering the islands for sometime.

With mortgages available and the number of products growing, investors should be able to find more ways to obtain the investment finance they need to tap in to the growing market. Although the new connections from Britain - such as the direct service from Stansted which Cape Verde Air began in October - have made access easier, the most up-to-date statistics available show that the tourism market is highly varied. Official government figures released this month for the first half of 2007 revealed that 18.6 per cent of visitors came from former colonial power Portugal, Macauhub reports.

Of the overall tourist numbers, 88 per cent was from overseas, with Italians the second largest group with 16.8 per cent of the market, Britain third on 14.1 per cent and Germany fourth on 10.9 per cent. These figures demonstrate that the islands have a wide appeal across different countries. One particularly exciting thought for British investors may be that this 14.1 per cent came before the start of services such as the one from Gatwick, opening up the possibility that British tourist numbers will increase significantly, helping further enlarge the buy-to-let market on the islands.