THE CARIBBEAN island of St Lucia is having a property-building spree. Apartments, villas and bungalows are sprouting from the ground alongside the hibiscus at astonishing rates to satisfy the growing demand for bolt holes with year-round sun.

Previously overlooked by second-home buyers in favour of Barbados and Antigua, St Lucia is embracing development with gusto. Property prices have risen by up to 40 per cent in some schemes in the past two years.

One of the reasons behind the building frenzy is the Cricket World Cup next March. There are not enough hotel rooms on the island to accommodate cricket fans and developers are working flat out to change that. But the island will offer investors relatively good value for money well after the final ball is bowled and the departure of the Barmy Army. Homes here cost about 65 per cent of what you would pay in Barbados, but the gap is closing fast. Developers predict annual price rises of 15 per cent over the next five years.

Most new homes are concentrated in the north of St Lucia, around the capital, Castries. This is by far the most populated part of the island and where returning St Lucians, flush from the sale of their UK homes, are choosing to buy. Yet it is not their sterling that is making the biggest difference to house prices in St Lucia but US dollars from American investors.

Although the island was British-owned until 1979 and was swapped several times between the British and the French for 300 years before that, many more Americans than Britons holiday on this island and end up buying property. A home here can cost anything between a few hundred thousand pounds and several million, depending on whether you buy a shack in a sleepy fishing village or a villa on the Cap Estates in the north of the island.

Owned by Dennis Nardoni, of Chicago, the Cap Estates is the St Lucian equivalent of Esher and the blingiest part of the island. This is where the high-maintenance crowd come to pose and play golf. It is also where Sunswept Estates is building 33 new villas on a hill above the popular Le Sport hotel and spa.

In common with many other new schemes on the island, the villas at Le Sport are not stand-alone homes but part of the hotel’s rental pool. You pay between $838,500 (£456,000) and $1.6 million for the right to use the villa for six weeks a year. The rest of the time the property is let out by the hotel and the owner shares the profit. Americans would call it a “condo hotel”. The British do not have a name for it yet but deals of this kind are becoming an increasingly common way for hoteliers to raise money for expansion and refurbishment.

For second-home owners, the advantage is that you do not have to worry about maintaining and letting the property — the hotel does all that. The downside, however, is that your returns will only be as good as the hotel.

In terms of the island’s future, however, condo hotels are good news. Unlike ordinary second homes, villas, which are part of a hotel pool, do not stay empty for long if the hotel is successful. What you get are more beds for tourists on an island that needs them, rather than ghost towns in low season.

There has been some attempt by the St Lucian authorities to curb excessive construction by stipulating that developers cannot build on more than 50 per cent of a site or higher than a coconut tree. Although some developers are clearly finding ways around these restrictions, it is unlikely that St Lucia will ever become as built-up as some other Caribbean islands.

St Lucia is three times as big as Barbados but has a third of the population. And unlike Barbados, which is flat, dry and easy to build on, 32 per cent of this island is mountainous rainforest — the bulk of which is a protected nature reserve. The area around the two Pitons, a pair of volcanic cones in the south of the island, is a Unesco World Heritage site. To build anything here you not only have to satisfy the local planners but Unesco too.

Nature remains the biggest adversary for developers: jungle-clad hills are difficult and costly to build on. There was at least one recent case of a digger sliding on the mud and falling into the sea. Nobody was hurt, but there is nothing like a soggy excavator to hold up construction.
Sunswept Estates: 001 758 452 0274

www.timesonline.co.uk/overseasproperty

FACTFILE

Virgin Atlantic flies direct from Gatwick three times a week and will offer services from Manchester from November. www.virgin-atlantic.com

Times recommends

• Second homes: credit crunch casualty or money-spinner?
• How I built my own sliding house
• Top 10 incentives for house buyers