When Michael Begg dreamt of a holiday home in Grenada, the usual clichés sprang to mind: a luxurious pad on a Bounty-bar beach, friendly locals and lashings of rum cocktails – plus a terrific investment in the sun with guaranteed, year-round rental returns.

So, after spending some time holidaying there, hanging out in “a cracking location” in the southeast of the Caribbean island, in April last year, Begg, 62, whose main home is near Loch Ness, decided to invest. Through the Oxford-based consultancy Property Frontiers, he chose an off-plan £175,000 studio-cottage, with its own terrace and pool, at the 40-acre, five-star Bacolet Bay resort and spa, and paid a deposit of about £50,000.

Begg’s tropical hideaway is due to be completed in December next year – but he isn’t planning to escape the Scottish winters there. He has decided he just can’t afford the luxury of a second home abroad and wants to get out.

“I am completely credit-crunched,” says Begg, a retired television producer. “And I just thought, if times are going to get tough, Brits aren’t going to be spending money going on holiday to hot and steamy Grenada and renting my place. They’ll be going to Skegness.”

He is offering to sell on the contract for £30,000, with the new owner liable to pay the final £125,000 on completion. The developer is now selling similar properties for £263,000. “It’s a bargain, in a completely unspoilt place,” says Begg, who was producing Miss World when Miss Grenada won in 1970. “The following year, when she returned to hand over the crown, I wrote a music link for her. To my shame, I rhymed ‘Grenada’ with ‘serenade her’. No wonder I’m skint. Now I’m looking for cash to invest in other things, such as a bottle of whisky and a revolver.”

Such a Hunter S Thompson-style finale may seem excessive, but Begg is just one of thousands of Brits who, in the past few years, have bought holiday homes abroad off plan and are now desperate to offload them – in some cases before the foundations have even been laid. They are finding themselves “crunched” abroad for a number of reasons.

First and foremost is the gloomy economic climate that makes a home overseas seem an increasingly dispensable luxury. Add in the difficulties of obtaining mortgage finance, falling property prices in Spain, Florida and other overseas markets, and the pound’s recent slide against the euro and the dollar – which can mean the sterling cost of a property being 25% or so more than was originally bargained for – and that villa by the sea is suddenly looking more like a millstone than an asset.

John Howell, senior partner in The International Law Partnership and a veteran of the foreign property scene, says he is receiving a growing number of inquiries from people keen to extricate themselves from contracts to buy second homes in destinations all over the world.

“More and more people are needing to pull out of their contracts,” he says, especially for properties in Bulgaria, Turkey and America. “Some are finding they are unable to complete, as their financial circumstances have changed; others have found the mortgage deal they had counted on when they first found the property has been withdrawn by the bank. Whatever stage you are at, you should always get individual legal advice.”

Each situation is, of course, different: some investors who put down an initial deposit of, say, between 10% and 30%, are now choosing to walk away, out of pocket, leaving the developer with the property. Others, who have already paid for a larger proportion of their home abroad, find themselves with more to lose.

Mark Stucklin, the Sunday Times columnist and head of www. spanish propertyinsight.com, has been deluged with calls from buyers in Spain in tricky predicaments. “This morning, I had a call from a man who had bought three off-plan flats in Mur-cia and needed to sell as soon as possible,” he says. “People want to know, ‘Can I back out?’ You can, but expect to lose your deposit. That is probably the worst that can happen, though it depends on what you have signed. Years ago, a good developer would sometimes have agreed to give the deposit back, but so many now are cash-strapped.”

Selling on the contract is, of course, the preferred option – even at a greatly reduced price, as Begg wants to do – provided there is nothing in the small print forbidding it. “Always make sure you can sell on when you sign,” says Fiona Frost, a property consultant at Property Frontiers. “But we advise people to think long-term. These days, people who want to flip property just aren’t living in the real world.”

However, advice sites and specialist agencies on the internet are proliferating. Sites such as www.sellmyholiday home.com charge about £175 for a six-month listing and will market your property all over the world to individuals, developers and estate agents.

As always, one person’s loss can be another’s gain. “Where there is distress, there is real opportunity,” says Stucklin. “If possible, see the long term. Real deals are beginning to emerge, but you have to be constantly looking around to see what comes up. If you are looking to make a purchase, alert estate agents and bank managers. If you are a cash buyer, let them know you are ready. Stalk the bargains.”

Michael Begg can be contacted on 01456 450193, or 0770 802 2621

Snap up an off-plan bargain

Spain A nearly completed two-bedroom flat with mountain views at El Chorrillo, near La Manga, is for sale for £105,000; a mortgage offer is in place. Call Adam Reeves on 01273 387256

Morocco At Colina Smir, near Tetouan, a recently completed two-bedroom, two-bathroom flat, with terrace and sea views, is for sale for £85,000. Call Maryline Esteves on 07944 609930

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