At a time when many buyers are seeking quality real estate assets, Venice is emerging as a sought-after destination.

Speaking to The Telegraph, Clare Hazle, of Knight Frank's international desk, explained British purchasers are only looking for homes "in tried and tested places they know and love".

While Venice is one of the most expensive places to buy property in Italy, Ms Hazle pointed out assets tend to hold their value well as "there is a shortage of new and newly-restored property".

However, real estate expert Paul Hudson warned potential buyers to be wary of choosing to renovate a house or apartment themselves, due to the high costs of transporting materials and strict regulations designed to preserve the city's historic buildings.

The most recent Knight Frank Global House Price Index revealed the value of properties in Italy fell by 0.4 per cent between the second and third quarters of 2011.

According to the organisation, this slower rate of decline may indicate that the country's residential real estate sector is "over the worst".