Anguilla: Sample a slice of understated Caribbean style

It has all the natural attractions but few of the drawbacks of its brasher neighbours. By Julian Knight

A proportion of the apartments on the new Zemi Beach development will be offered on a rental programme that restricts usage but cuts local taxes

Miles of often deserted golden beaches, aqua marine sea, peace, quiet and privacy – that's what sells the Caribbean island of Anguilla to travellers and property owners alike. The small island, one of a handful of British overseas territories, with just 15,000 inhabitants sits a half-hour flight from Antigua and short boat hop from the buzzy French colony of St Maarten.

Anguilla is like St Maarten's sleepy twin with electricity only arriving on the island in the 1980s; nevertheless it's fast developing a reputation for fine dining with 200 restaurants dotting the island – that's an incredible one for every 75 inhabitants.

Britons can be on the island within 12 hours but yet it is just far enough away to have staved off the sort of property development which has occurred on St Lucia and Barbados.

Villas dominate the market on the island – many perched on rocks due to a local law which bars outsiders from owning property on the beach itself, this particular benefit is the preserve of the people called the "belongers" – Anguillan born and bred.

But, nevertheless, private villas come at a hefty cost – think seven figures and up – and prominent owners include Roman Abramovich and Dan Brown, the author of The Da Vinci Code. Although, hardly a concern for Russian billionaires or best-selling novelists, the stream of wealthy holidaymakers making their way to Anguilla – many from the US and Canada – provides good rental opportunities.

"After a few years in the doldrums the market in the Caribbean is as strong as ever. A price correction combined with renewed economic growth in the US and Canada means there is a lot of buyer interest at present," says Kieran Kelly, the chairman at estate agents Chesterton Humberts in Barbados. "We saw this first in Barbados and St Lucia, but the market is now renewing in smaller locations such as Grenada and Anguilla, which of course has never gone through a boom-bust cycle," Mr Kelly adds.

Development of apartments and smaller villas – so crucial to tourism on an island where the average room occupancy rate is around the magic 70 per cent mark – has been sporadic, barely scratching the surface.

Four major hotel groups and their villas suck in a lot of the tourist traffic and licences for new builds are rare. But on a prime beachfront location a new development is coming along fast, Zemi Beach in the Shoal Bay area on the west coast of the island (zemibeach.com; 0844 856 6879).

Crucially for buyers looking at the Caribbean, the development offers prices which are lower than private villas and stack up well against the more established but less exclusive Caribbean islands: "I see this development as suiting someone who wants to the dream getaway location," says Marcus Edwards, the managing director of Caribbean property specialists Sunsplash homes. "It's less about nightlife or being cheek by jowl with other owners and more to do with privacy and quiet enjoyment."

The Zemi Beach development will contain 140 one, two and three-bedroom apartments and is due to be complete by 2014. Prices start at $608,000 (£384,000) rising to $2.3m. Nearly all the apartments will have sea views and some of the first on the market have direct beach access from their verandas.

As is usual with luxury developments, an onsite restaurant, gym and spa are planned and should make rental easier. Those tiring of the beach and the watersports can take a walk in the Fountain Cavern national park nestled next to the development, which contains cave paintings from the Arawak Indian era and even a supposed fountain of eternal youth, which if it works should negate the need for spa treatments.

The ownership arrangements are unusual – reflecting restrictive planning rules and the local laws favouring the beach rights of "belongers". The developers have agreed with the government that at least three-quarters of the apartments should be available to rent – to help boost tourism. The laws on barring non-belongers buying beach property also mean the apartments with direct access on to the golden sands can't become the full-time residences of people from overseas; in other words they have to enter the Zemi Beach rental programme.

Under the programme, purchasers have the right to stay up to 56 days a year (28 days in high season and 28 in low) but for the rest of the time the apartments are rented out to holidaymakers. Owners choosing to enter the rental programme don't have to pay the hefty 12.5 per cent Anguilla property purchase tax. Furniture is also supplied to scheme members.

However, outright owners have to swallow the purchase tax plus the 5 per cent alien land tax. Maintenance charges are on the high side at $1.25 a square foot a month – so a one-bed apartment will cost around $18,000 a year in upkeep. But as a resort targeted at the wealthy, finish standards are expected to be high and rental earnings substantial.

The average nightly rack rate for Anguilla's few top end hotels is $800 and with the rental scheme returning 45 per cent of all earnings to purchasers an annual yield of 6-7 per cent seems realistic. But, with up to a quarter of properties available outside the rental scheme there is the option to simply buy and either live there full time or drop in as and when. "We have tried to offer the best mix we can of a viable rental scheme and the straight ownership option," says Jeffrey Goldstein, a director of the family firm developing Zemi Beach.

"But the island needs the beds in order to help bring in high-end tourists hence the attractive rental programme. The island has resisted mass tourism but is growing as a destination for those in the know and this means rack rates are high, which in turn should mean that a rental investment can make sense," Mr Goldstein adds.

Mortgages are available at rates comparable with the UK. "We have negotiated with a local bank a mortgage based on a minimum 70 per cent loan to value with fixed rate deals lasting three or five years," says Naomi Cambridge, the sales director of Zemi Beach. "The three- year rate is 4.25 per cent and five-year 5 per cent,"

An alternative is for UK buyers to remortgage against their main home from a UK bank and this has the advantage of potentially lower rates and negates currency risk as repayments will be in pounds rather then dollars.

Regardless, though, of the type of financing arranged or rental returns accrued, Anguilla is, according to Mr Edwards, about a lifestyle choice: "It's for people who want something off the beaten path, that makes it a little higher risk I suppose than Barbados or St Lucia but certainly very different and unique."