Until the 1970s, the name of the town of Peniche sent shivers down Portuguese spines. The place was home to one of the most notorious jails for political prisoners during the Salazar regime. Thirty years later, this fishing town in the Costa de Prata has ditched its grim heritage to become the shopping centre of choice for the many people who are snapping up properties along the Costa.

Although the Portuguese property market has been affected by the economic slowdown that gripped the country in 2004, it remains buoyant in tourist areas, where it is driven by foreign demand, according to research by the BBVA bank. Unsurprisingly, the Algarve continues to be popular with overseas buyers. However, the Costa de Prata is showing every sign of stealing its crown.

Peniche itself is better known for its seafood than its landscapes, but the beaches immediately to the north are some of the finest in this relatively unspoilt corner of Portugal. A new motorway, the A8, has brought the Costa within easy reach of Lisbon and its airport, where low-cost airlines are starting to schedule daily flights. This makes it prime holiday country for both locals and foreigners. ?The Costa de Prata is currently the object of much attention by foreign second-home buyers,? says Eulalia Pensado of RICS Portugal, who calls the area ?one of the last undiscovered gems in Europe?.

Among the most established resorts in the area is Praia D?El Rey (0800 977 7001), a 600-acre triangle built by Portuguese developer Béltico Group between the Berlengas Islands natural reserve and the postcard-pretty medieval town of Obidos. The first three phases of the project, which account for about 600 homes, have been completed and sold out, mostly to Portuguese, British and Irish buyers.

Development is now ongoing at the spectacular Aldeia Real, which runs alongside Praia D?El Rey?s golf course and enjoys far-reaching views across the Atlantic Ocean. This neighbourhood offers only a limited number of villa plots ranging from 0.4 to 0.69 acres. Smaller, more affordable plots are available at the Aldeia des Descobertas, where buyers can then choose from six prototype villas designed by the Praia d?El Rey architectural department. Plots start from ?146,000 (£97,300) and villa builds from ?267,800 (£178,500). A selection of cheaper townhouses and apartments is available at Vila dos Principes and Burgo D. Sebastiaõ from ?195,500 (£130,300). Praia D?El Rey homeowners can join the spa and gym at the local five-star Marriott hotel at special rates. But the resort?s biggest attraction is, undoubtedly, its golf course. Designed by American architect Cabell B. Robinson, it is set among pine forest and sand dunes, and overlooks the Atlantic.

A short drive from Praia D?El Rey, another development is seeing the light these days. Bom Sucesso (020?7589 8844) is set inland and borders a lagoon near Obidos on one side. Bom Sucesso?s trademark is cutting-edge architecture. Portuguese luxury developers Acordo called on architects Wimberly Allison Tong & Goo to create the site?s master plan, and drafted 14 leading Portuguese architects to design the facilities, villas and townhouses.

Privacy and low density are the key concepts behind the development, which will see about 600 homes set in some 400 acres. Houses, the vast majority of which will have only one floor, will take up less than 6.5% of the land and eucalyptus and fir woods will have the lion?s share of the acreage. As in Praia D?El Rey, the heart of the resort will be an 18-hole golf course. Although golf aficionados are likely to account for the majority of buyers, other facilities, including a five-star hotel-cum-spa, a tennis club and a dedicated beach linked with a shuttle bus, will cater for non-golfers. Bom Sucesso is attracting 40-something buyers who often come from media or creative backgrounds. ?We even have a helicopter pilot,? says Paul Rogers of Hamptons International, who are marketing the resort in Britain. Prices at the resort start from ?165,000 (£110,000) for a one-bedroom townhouse all the way to ?660,000 (£440,000) and beyond for a five-bedroom villa. ?Each home is like a limited edition,? says Caroline Reid of Hamptons International. ?Prices represent exceptional value in this up-and-coming region of Portugal.?

Thousands of miles away, another up-and-coming region is seeing an increase in interest from British buyers. Historically the preserve of Americans looking for a quiet place in the sun, Turks and Caicos, in the Caribbean, has seen a recent increase in British and European demand. ?With property prices increasing throughout traditional European hotspots, British and European buyers are looking to alternative destinations for second-home investments,? says Ciara Shiel of local developers Regent Ltd. ?Turks and Caicos offers a stable government, low crime rate, friendly locals, direct access, miles of uncrowded white-sand beaches and sparkling turquoise waters filled with sand dollars and starfish.?

Although the Caribbean seascape is undeniably appealing, another, more prosaic reason is also driving droves of British buyers to the area: a weak dollar. The dollar is the islands? official currency and a favourable exchange rate means that the purchasing power of sterling and the euro are greater these days. Add to this that Turks and Caicos has tax-neutral status, which means it charges no personal income, capital gains or property tax other than stamp duty at the time the transaction takes place, and its lure becomes irresistible, despite the hurricane season (which runs from June to October).

Forty islands make up Turks and Caicos, but only eight are inhabited. Among them, Providenciales, known as Provo, is by far the most popular destination for overseas buyers, probably because of its international airport. The island has everything from beachfront developments to hilltop houses, the latter particularly sought-after for their panoramic views.

The vast majority of Provo?s developments, however, line the 12-mile-long Grace Bay, which has been rated one of the best beaches in the world. The easiest way to get a place here is to buy an apartment in a beachfront condominium, as the few condo villas sell fast. Of the four garden villas in the yet-to-be-finished Regent Grand condominium development, for example, two have been sold and the other two have been reserved.

The Regent Grand (00 1 649 941 7770), which will also have 50 apartments, is designed in a daring mix of neo-Classical Italian and Caribbean styles. Each of the apartments affords views over Grace Bay?and yes, hurricane protection is available for all external windows. Inside the property, a central piazza has a swimming pool, two heated Jacuzzis and a floodlit tennis court.

Prices start from $740,000 (about £410,000) for a beach-level two-bedroom flat and go up to $3.1m (about £1.7m) for a four-bedroom penthouse with roof garden and a hot tub in the oceanfront terrace. The Regent Grand expect to complete the works in spring 2007 but 70% of the residences have already been sold or reserved.