Lancaster is emerging as one of the North West's property hot spots after a 35 per cent house price boom in the past 12 months.

But there are fears that first-time buyers and others moving to the city looking for a cheap place to live may be left out in the cold.

A survey by website, rightmove.co.uk, says the city is second only to Blackpool in terms of price increases in the year to October.

Estate agents have welcomed the news - but there are fears that first-time buyers and the less well-off are being priced out of the market.

Major factors include the record low interest rates, as well as the stock market slump - which has seen investors ploughing money into student housing.

Green councillor Jon Barry saids he feared that the increased prices would mean first-time buyers would not be able to afford homes.

He has called for stricter rules to force developers to build more affordable homes.

"These prices are clearly going to price many first time buyers out of the market.

The district currently requires only 20 per cent of new properties to be 'affordable homes'.

" One way to help first-time buyers would be to increase this percentage rather than to build yet more executive homes."

He pointed to the Whinney Carr development, being discussed at a re-opened public inquiry this week, which - if it gets the go-ahead - is set to include a high proportion of expensive 'executive' homes.

Mark Knight, of Legal and Mortgage Property Services, said: "First-time buyers are already having to spend £60/65,000 and, obviously, not everyone can afford that.

"People are having to look in other areas because the city centre is getting so expensive - Skerton is very hot at the moment, and Morecambe is also popular.

"This cycle tends to happen every 10 to 12 years, with the increase in people's salaries and the low interest rates."

Other estate agents point to specific local factors which have boosted the area.

"Property that didn't used to sell particularly well has sold really well," said Sue Bridges, of Sue Bridges Independent Estate Agents.

"First-time buyers used to move to areas like Primrose and Moorlands, but that's got too expensive now and they are looking elsewhere.

"A lot of the Primrose and Moorlands areas are being bought up for student lets - because investments are not bringing people as good a return as they had hoped, they are putting money into property instead."

But the future of the property market remains uncertain, with nobody willing to make a prediction on its future direction.

Ms Bridges added: " I think it will start to level off a bit because we are coming up to Christmas, but none of us know what next year will bring."

But Mr Knight believes the market next year could prove to be more complicated: "I think next year will level out, because sales can only go so far with these prices - if they don't level out we will lose first-time buyers.

"Some agents and vendors may think its going to continue - all that will do is create a glut of over-priced properties which are not selling - that would take around a year."

l Lancaster's biggest property scheme was under discussion again this week.

The public inquiry into the 535-home Whinney Carr scheme, to be built on green fields to the south of the city, re-opened this week to hear new evidence relating to the area's housing needs.

It has been opposed by green campaigners and people living nearby.