Have you considered Ireland -- the prices there are _very_ reasonable now, and courtesy of Ryan Air and the other low cost carriers it is very well connected.. Also consider Malta, where english is widely spoken (it was a british possession for 500(?) years),
Gibraltar is actually a Peninsula, attached to Spain and is VERY VERY small. There is a 300 year spat between Spain and the UK and the border is variably open -- you should do some more research on that, since you may find you are stuck and would have to fly to get off "the rock".
We lived in the south of france, inland in the Aude. It is not cheap,even fixer-uppers are expensive, because the Northern Europeans love those old stone cottages. Getting work done on a fixer-upper is definitely not cheap. A British TV show is not a good guide because the UK is a very expensive place to live, so their idea of "cheap" is not in line with North America.
A good resource is internationalliving.com -- they can give you an idea of the true costs.
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