Bill and Ingrid Hamilton started the trend 16 months ago, buying a four-bedroom, two-bathroom cave for £60,000. Since then more than 40 other caves have been sold to British families seeking an alternative to the high-rise, noisy and congested Costas.

Visit the tiny hamlet of Galera (population 1,300) on a sunny January day and the tranquillity of this high plateau, nestling in a triangle formed by three stunning mountain ranges, is disturbed by the joyous burr of heavy plant and the chime of hammers.

Rosario Arjona cannot believe all the activity. “Two years ago this was all in ruins and now it’s great,” she smiles, pointing out her son driving a dumper truck along the narrow tracks that connect the galleried sides of the hill where she lives. “Life is coming back to the village. All this activity gives bread to the hairdresser, the baker and especially the labourers, like my son. We no longer have to leave, indeed we are coming back, along with the foreigners.”

The Hamiltons admit that they are unlikely pioneers of modern cave life. Ingrid and Bill, a retired prison officer from Edinburgh, were living in Torrevieja, but the over-development of the coast had got to them.

“I never imagined that I’d end up living in a cave but the moment I saw it for the first time I said ‘yes, this is for me’,” he said.

Their cave enjoys a view across the plain to the distant town of Huescar. Instead of nipping out on to a crowded promenade to read the English papers and eat a traditional fried breakfast, Bill and Ingrid are now treated daily to fresh vegetables brought by their neighbour, Antonio, on his donkey from his kitchen garden, not to mention local wine from his bodega. A climb higher up the bluff that dominates the village brings you to the home of David and Ann Warnes, the Hamiltons’ fellow pioneers, who spent the previous decade sailing a 45ft yacht around the Mediterranean. Both are keen fell-walkers and their duplex cave-house has panoramic views of the Lasagra mountain.

Cave life has progressed since the 1950s, when nearly 5,000 villagers were forced to emigrate, most of them to Barcelona, France and Germany, in search of work. The Hamiltons can watch satellite television and Bill has created a studio for his guitars.

These Flintstone caves may date back to the Iron Age, when the hill was the thriving Iberian town of Tutugi, but the newly restored versions have electricity, mains water, telephone lines and fireplaces. Chimneys poke through the soft rock, making it look as if the hills are breathing smoke. And naturally, no two caves are the same. Mr and Mrs Warnes have been visited by a man, now living in Catalonia, who was born in their cave.

“We showed him around and he told us that pigs and rabbits were kept in what is now our kitchen and the mule was kept in one of our bedrooms,” Mrs Warnes said.

“Our youngest son said ‘First you live on a boat and now a cave — why can’t you just live in a house like ordinary people’?” The sudden popularity of Galera’s reformed caves is turning the village into something of a cross between the Klondike and Bedrock of Flintstones fame.

“In a way we feel sad about the fact that in the short time that we’ve been here you bump into more and more English people,” David said. “But I don’t object because this is creating work, employment, money locally. There is definitely the sense of a boom going on.”

The man responsible for this is Miguel Rodríguez Gomez, a local who first saw the potential of the caves 15 years ago, when he redecorated one and began letting it for weekends to city-dwelling Spaniards.

“Everyone laughed at me at first,” he said. “ The Andalucian government wasn’t interested because it was actually working to end the region’s practice of cave-living. In our consciousness it was linked to poverty, the memory of those terribly hard times.

“Most of the village moved away, ashamed of where they came from and having grown up in a cave, never wanting to return. Now all that is changing. They come back and see how beautiful they are when they are restored.”

Señor Gomez believes that the caves — there are more than 1,000 — will in time all be brought up to the modern standards enjoyed by the new British residents. Neither he nor anybody else in Galera is worried about the impact that the arrival of foreigners will have on what is still a very traditional part of Spain.

Les and Sharon Edwards and their son, Craig, agree. Craig, 25, a proud member of Galera’s chamber of commerce, bought a restaurant in the village and are now getting in on the cave boom.

“The Spanish think it’s crazy what the foreigners are prepared to pay for their caves; to them living in a cave still represents poverty,” he said. “But for Londoners caves are funky and relatively inexpensive.”

The Edwards’ clients include an Islington couple with a chain of clothes shops and a physiotherapist for a Premiership football club.

Back at his cave, Bill said: “They are so cheap to run and they maintain an all-year round temperature of 20 degrees.

“It’s been down to minus 10 here, but it’s lovely and warm inside. Then in the summer it went up to 48 and you can stand in your doorway and feel the cold air on your back.

“The people are fantastic; there’s nothing I dislike about it. I love being a troglodyte.”

PRICE RISES FUND EXODUS

More and more Britons are exploiting house-price rises to fund a home abroad (Lucia Adams writes). It is estimated that there are four million living overseas, and a recent survey by Alliance & Leicester International predicted that by 2020, one in five “older” Britons will live abroad.

The most popular destinations are France and Spain, but buyers are turning to Croatia, Cyprus and even Dubai and the Caribbean. New destinations in 2004 could include the western Algarve, the eastern Mediterranean and North Africa.