Soaring house prices could have serious implications for homelessness in York, support groups warned today.

Home owners are sitting on a gold mine as York prices rose by 24 per cent in the past year.

But for first-time buyers and renters, prices have become unrealistic as salaries stand still.

Homelessness groups are warning that government help has to be given to stop people finding it impossible to afford somewhere to live, as the city's average house price rises to £94,000.

John Walker, project manager of Nightstop, which works with the city's homeless, said: "When house prices rise by such an amount, landlords find the return low for renting out at an affordable level and they look to sell.

"It is definitely having an effect, particularly for young people who may not be able to afford higher rent levels, and who are finding there is less property on the market to rent.

"It is a very difficult situation. It is good for York and for the city's economy, but it has negative social effects which do have to be tempered in some way, in terms of benefits and help for people who have been priced out of the property market."

His warning comes as the Land Registry prepares to release a report tomorrow which shows York property prices are the fastest rising in the country after Bath and Rutland.

Tim Blenkin, partner at Blenkin & Co estate agents in High Petergate, said the price increase was down to strong economies in York and in Leeds, and the attractiveness of the city which means many Leeds workers prefer to commute.

And Lesley Beattie, of Quantum estate agents, in Walmgate, said the housing boom has had a huge effect.

The company has put three terraced houses in Willis Street, off Heslington Road, on the market in the past five weeks. They sold within hours for around £75,000.

A year ago, they were priced at about £60,000.

She said: "There are many more people looking to buy than there are houses going on the market, and it's showing big increases in house prices everywhere in the city.

"I can't see it not continuing. There is absolutely no sign of it stopping at the moment."

Updated: 11:37 Tuesday, February 27, 2001