'Jet-to-let' buyers look for a first-time home in the sun

Ray Boulger, senior manager at brokers Charcol, advised against a such a decision for first-time buyers, on the grounds that if they were trying to buy in the UK at a later date the debt on their foreign property might deter mortgage lenders.

Even if young people - dispirited at the cost of homes where they want to live - are aspiring to own foreign properties, Mr Boulger said the reality might deter them once they had done the research.

"It requires a bigger deposit - say 15 to 20% ... and legal costs. Most first-time buyers are not in the game," Mr Boulger said.

Another industry source also expressed caution. "A first-time buyer wants a home they can live in. A property abroad is an investment," the source said.

The plans being laid out by Mr Prescott today are aimed at people looking to live in the home they buy. As well as promising more affordable starter homes, the deputy prime minister is to extend choice-based letting - based on a scheme in Sheffield - that allows council tenants to rent new properties based on a form of market shopping rather than an obscure, points-based analysis of need determined by council housing officials.

In a scheme first unveiled at the Labour party conference, Mr Prescott wants to make more homes affordable to the poor by allowing tenants to own the bricks and mortar while the freehold remains held by the government.

In a compromise with Alan Milburn, the party's election coordinator, Mr Prescott has also agreed a scheme that will allow tenants to buy stakes in the value of their housing association homes.

They may be allowed to buy their homes outright on certain conditions, but they will also be required to offer to sell the home back to the housing association if they wanted to move on. Mr Prescott was worried that the loss of houses to private ownership would worsen the shortage of social housing

He curbed council tenants' right to buy in 2003 by reducing maximum discounts in certain areas from £38,000 to £16,000. In a speech to a Labour conference at the weekend, Tony Blair referred to extending the right, saying Labour had ushered in 1.5 million more homeowners, but more dreamed of owning their own homes.

To some in the mortgage industry, the government could do more. Halifax, part of the HBOS group, is stepping a campaign to lobby for a change to stamp duty.

"The threshold has not been increased since 1993 and as a result the average first-time buyer now pays £1,300 when they purchase a home. Back in 1993, the average first-time buyer paid nothing," an HBOS spokesman said.

According to the bank's calculations, this tax take has increased tenfold since 1993, making it one of the fastest growing boosts to the exchequer. If there really was a trend to start to buy abroad, the chancellor's coffers might start to feel the pain.