So it’s not just the British housing market that is in trouble. According to some of the direr predictions of doom and gloom that have been circulating in recent days, the prices of the second homes we have been so avidly buying across Europe – and beyond – could be heading for a fall too.

Recent drops in the market in Spain and Florida – traditionally the two most popular spots for Britons looking for holiday properties – are warning signs, even if the problems in both countries have been looming for some time, and long predate the current market turbulence.

For some, such as Michael Ball, an expert on property economics at the University of Reading Business School, there is a broader malaise. In a recent speech to a property forum in London, Ball, who is a housing adviser to the government, warned of falls in prices not only in the kind of Mediterranean resorts popular with British buyers, but in the “emerging” markets of central and eastern Europe, where they have gone as “fly to let” investors.

The explanation, according to Ball, lies not just in the surplus of identical blocks along the Mediterranean and Black Sea coasts, but in the global credit crunch that has driven up mortgage rates across much of the world. “People have been very optimistic about long-term values,” he said. “There has been a boom, the market has been driven by foreign investors, and now that is beginning to turn.”

As an example, he cited the Estonian capital, Tallinn, where, he said, prices had dropped 10% over the past 12 months, after several years of high double-digit growth. He might also have pointed to neighbouring Latvia, where Latio, a local estate agency, reported recently that prices began to fall in May and are already more than 8% down on the year – even though this leaves them 30% higher than 12 months ago. A slowdown is also under way in Lithuania, the third of the trio of Baltic states.

This correction is hardly surprising: property prices in all three countries, which remain among the poorest in the European Union, are about five times higher than they were in 2002 – suggesting they were long since ripe for a fall.

Such corrections repeated across the board, however, would be of more than academic interest to many Britons. Several hundred thousand people are estimated to own property overseas; Savills, the estate agency, has estimated that the value of British-owned homes abroad has surged from £67m in 1994 to more than £50 billion today.

The heat has certainly gone out of the market in much of Europe – and not just in Spain, according to the latest Knight Frank Global House Price index. After several years of strong growth, the agency found prices in France were up just 3.2% in the second quarter of this year – against a 14.3% rise 12 months earlier. Growth was also modest in Greece and Portugal, while Ireland’s spectacular housing boom is coming to an end.

The picture is not all gloom, though – at least not yet. Elsewhere in the former communist world, prices are rising in Poland, Slovakia and the Czech Republic – sustained more by pent-up demand for decent living space from locals keen to escape their communist-era tower blocks than by foreign buyers. British investors are also piling into the Romanian capital, Bucharest, and even into Tirana, the Albanian capital.

The markets in many places outside Europe are also still surging. Prices in Singapore, for example, were 21% higher than a year earlier, according to the Knight Frank figures. Those in South Africa rose 15.3%, those in New Zealand by 10.8%.

Quite how much credence should be given to such global indices is not clear; few countries, even in western Europe, analyse their housing markets with anything approaching the enthusiasm of the British – needless to say, the statistical base in, say, Bulgaria or Romania is even shakier. Despite the gloom on the ground, Knight Frank had prices in Latvia and Estonia, for example, rising by 37.7% and 20.2% respectively. In addition, such general national indices may not reflect the particular type of high-end property in which British and other foreign buyers tend to be interested.

While some speculative investors may have their fingers burnt by the slowdown, it might not be all bad news for traditional second-home buyers. “Many people are purchasing for lifestyle, not in order to make a quick profit,” says Rebecca Brown, a director of the agency Chesterton International. “If the global market sees a price correction, those who have bought a property simply for the lifestyle that it offers are unlikely to lose out.”

Feeling the crunch?

Spain:The overall market is still rising, but the prices of flats and villas in some of the less attractive developments on the Costas have dropped over the past few years.

USA:The US property market is in deep crisis; prices in Miami and other parts of Florida have been especially badly hit.

France:The rate of price growth across the country is slowing for the third year in a row, but prime locations in central Paris are holding up well.

Baltic states: With prices up 500% since 2002, these have been the star performers of the former communist world, but the markets in Estonia and Latvia started to fall back earlier in the year, while Lithuania is cooling down.

Poland: Warsaw and Cracow may be nearing their peak, but experts see potential for growth in cities such as Lodz, Poznan and Wroclaw.

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