For the caramel:

Combine the sugar and water in a saucepan. Heat over low heat until it turns into caramel.

Pour the caramel into the bottom of the ramekins.

For the custard:

Pour the milk into a saucepan and bring to a boil.

Meanwhile, crack the eggs into a mixing bowl, add the sugar and vanilla, and whisk until the mixture is pale and slightly thickened, using a hand or electric whisk.

Gradually whisk in the hot milk, a little at a time.

Pour the custard mixture into the ramekins over the caramel.

Bake in a water bath for about 50 minutes.