Fifteen years ago, it would have been unthinkable — a British couple downshifting to set up an adventure holiday firm in Slobodan Milosevic’s pariah state of rump Yugoslavia. But since Jack Delf and his fiancée, Hayley Wright, bought three ruined stone houses and 50 olive trees from the Nakicenovic family in February this year, Montenegro has become home.

“It is incredible how welcoming people have been and how they’ve helped us to settle into this beautiful place,” says Wright, 32, a former oil trader.

Like many other British buyers, they visited the Montenegrin coast in search of lower prices than in Croatia, which long ago emerged from the Balkan wars to become a popular choice for investors.

Delf, 38, who sold advertising space in London, says buying in the little town of Herceg Novi, near the Croatian border, was sometimes a nail-biting experience.

“Because of this country’s complicated inheritance laws, the property had seven registered owners, and two of them were dead. On the day we were due to complete the purchase, everyone turned up in the estate agent’s office, along with lawyers and a local maths professor, who had come to work out who got what.

“The professor kept getting his sums wrong. Everyone started arguing and shouting, and I was worried it might turn into a fight. Then, suddenly, everyone broke into smiles and it was obvious they had all agreed, so we trooped up to the courthouse to sign the papers. Then as we were leaving, the maths professor said, ‘Wait a minute ’” Delf says he and Wright ended up best friends with some of the sellers. “One evening we went round to one of their houses, had much too much to drink, and as we stumbled home, I proposed.”

The number of British buyers who may eventually join Delf and Wright in Montenegro could hinge on events this weekend. Today, the country’s 650,000 inhabitants are due to vote in a critical referendum, choosing between full independence or continued membership of a loose union with Serbia. Montenegro’s president, Milo Djukanovic, has been a strong advocate of independence.

Most estate agents believe that if the country cuts itself loose from Serbia, local property prices will be boosted. In the short term, however, a “yes” vote may help buyers rather than sellers, as thousands of Serbs sell off their holiday homes on the coast. Nor may full independence put Montenegro on the road to EU membership, as its government has claimed.

David Webb, first secretary at the British embassy in Belgrade, says: “If people think they are buying into the EU, probably they are very much mistaken. If anything, independent Montenegro is further from the EU than ‘Serbia and Montenegro’. Is the EU really the place for a country with a lot of Russian connections and only tourism to keep it up?” Whichever way the vote goes, the Balkan wars of the 1990s are receding into history. It has become easy, once again, to appreciate the charms of Montenegro’s Adriatic coastline, where Roman Abramovich, owner of Chelsea football club, holidayed with an entire flotilla last summer, and where many of his Russian compatriots have already bought homes.

Kotor, an old Venetian port tucked into a corner of Boka-Kotorska Bay, a turquoise, butterfly-shaped “fjord”, is a particularly vibrant town. Its cafes, set on stone alleys and squares, are the hub of a growing British property bazaar, as home-hunters and investors take advantage of prices a third lower than Croatia’s.

Foreign investors have found the property-buying process surprisingly quick — 30 days is the norm — with a smattering of efficient estate agencies, many of them British-owned, offering a mix of old stone houses and newly built apartments. Prices rose by 50% in 2005, with a jump of 25% forecast this year.

Tom Hensman, 39, who owns a graphic design company in Dorchester, paid £120,000 last year for two flats in a new development with his business partner, Lisa Rossiter. He bought south of Kotor, near the picture-postcard island hotel-village of Sveti Stefan, a five-star destination that has lured celebrities from actress Sophia Loren to model Claudia Schiffer; Prince Charles and Princess Diana planned to honeymoon there before they were rumbled by the press.

“Buying was incredibly simple,” says Hensman. “It took two weeks from start to finish, and the flats are great. They are finished beautifully. We thought of Croatia, but found prices there were quite high, so we went down to Montenegro.” Hensman avoided local agents, but admits he took a risk. “We’d made arrangements to meet a few UK-based estate agents at a hotel in Kotor, but it was like a cattle market. The reps herded us round their properties but they didn’t show us many nice places.

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