A Bungalow in Gala Anyone?

There's an article in the Scotsman today about the rise and rise of house prices in Scotland. Clearly this cannot go on, either here or in the rest of the UK. At some point the bubble has to burst. I'm no economist, but with rising prices comes rising mortgage repayments and as far as I'm aware lenders don't accept credit card payments. There comes a point when people will struggle to actual keep up (I'm sure some are already). Last week's inflation figures will give rise to an interest rate rise and for many people this will be an extra £30 to £50 a month more on their repayment. There is, however, one group of people who are not so affected by all this; those that are downsizing, or down-locating.

Interestingly one type of property that is showing rampant growth here in Scotland and particularly the Borders are bungalows in Galashiels. Why? Simplistic maybe but I suspect at the heart of the bungalow gold rush (plus 30% last year) is the fact that incomers to not just the Borders but Scotland in general are fuelling a good deal of this rampant increase in sales. Some parts of Scotland are showing a slowdown, mostly in what are less desirable areas for some buyers. The Borders has lagged behind much of the UK in house price terms, for years and while it's been rapidly catching up of late it's still a relatively good buy. The 'grey pound' is moving north and pushing up prices. The most damaging aspect of all this to the Borders economy is the drift away by younger people. In the Borders there's a limited supply of housing, and a real dearth of affordable housing of any kind for younger people. This is a must for the new council to address once elected after May 3rd