Where to buy your fantasy island

Sad news for those still convinced that property prices in the UK have long since bottomed. According to Zoopla, the value of the average property fell by 1.7% in the first quarter of 2012 alone. That means that average prices are now 2.8% lower than they were a year ago.

Add in inflation, and in real terms prices are down around 7% over the year. That's even the case in London where, despite the endless talk of the unstoppable boom, prices have fallen 2.1% in the last year (so around 6% in real terms).

Still, while it is satisfying to see prices in the UK continuing down the slow march to affordability, these aren't the kind of price falls that might make you feel you want to nip in and grab a long-term bargain.

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For that, you need to look across the water. One of the most common property fantasies of all is owning your own island. Do this in the UK and you won't get much in the way of value. You could, for example, pick up the Out Skerries off Shetland today for £400,000.

They are utterly stunning. But you get almost nothing but the view for your money: the islands are crofted; they offer no house for their technical owners; and the estate's total income comes to about £170 a year. Over all, you'd get little more from owning the island than from taking a boat trip out to it once a year. And you can probably do that for around £399,950 less than it will cost you to buy the estate itself.

On the plus side, look towards Europe and you will see that you can also now pick up islands off the coast of mainland Greece for significantly less than a few years ago. According to Stavros Stellas, an estate agent quoted in The Telegraph, some island prices are down over 25% in the last two years alone and that's despite the nation's rich doing all they can to get out of cash and into hard assets.

You can pick up the "tiny island" of St Athanasios (1.5 acres) for a mere €1.5m, although I note that its current owners aren't exactly with the programme. It's been for sale since at least 2010 and they haven't yet cut the price.

Personally, I like the sound of the 1,235 acre Nafsika Island, "one of the last undeveloped spots in the Ionian Sea". Yours for €6,900,000.

If I was after an island however, I wouldn't go for any of those. I'd note that, unlike in most other markets, house prices in the US have more or less bottomed (see our cover story of three weeks ago) and I'd buy the 17 acre Crystal River Island in Florida.

It has no long-term tenants; it comes with a sweet if minute cottage and fresh water supply on tap, and it is yours for a mere $549,000. It also comes with a degree of security. The US is unlikely to dramatically increase property taxes. Greece has already and is very likely to do so again. The same goes for the UK.