HOUSE prices in Northwich are rising by more than four times the rate of inflation.
And with the promise of the £200m Northwich Vision regeneration fuelling prices, it could mean many first-time buyers struggling to get on the property ladder in 2007.
Figures released by the Halifax show the town has the second fastest growing house prices in Cheshire. Average prices rose 12% in 2006, from £163,706 last year to £182,910 - with experts saying the most dramatic increase is at the lower end of the housing market.
Cheshire Property Service's Amanda Longshaw said prices were rising much quicker than the national average. She said: 'A lot of people are starting to invest in Northwich. People are starting to realise the potential of the Northwich Vision, and there are a lot of new buildings already going up. The council is looking to put in new bars, cafes and restaurants to target people in their 20s and 30s who have not had those sort of things in Northwich in the past.
'It is already having a knock-on effect on prices in the town and the facilities the Vision promises will really drive house prices on, bringing Northwich in line with Knutsford, Chester and Nantwich.'
But the boom is leaving first-time buyers struggling to get a foot on the property ladder. Mrs Longshaw said most were having to pay around £120,000 for a two-bed terrace compared to £100,000 last year. Investors are buying typical first homes to lease out at around £500 a month, meaning many first-time buyers were instead having to rent. Agents and mortgage brokers are offering deals to help them out.
Andrew Williams of Williams Estates said: 'It is at the lower end of the market that we are finding the greatest inflation. Last year you could get a typical terrace house for between £95,000 and £100,000, now it is £110,000, whereas a typical house on Kingsmead going for £250,000 in 2005 is still around that price now.'
He said raising the stamp duty threshold to £125,000 had given a helping hand to first-time buyers, but had also encouraged inflation as house prices had moved from under the old threshold to the new one. He said: 'It definitely did help first-time buyers but if it's fuelling house price inflation, the affect is lost.'
He said shared ownership, which allows people to buy a percentage - typically 50% - of a property, were proving particularly popular: 'Everyone wins, the housing association gets rent and the person who is buying into the property can get the opportunity to buy out the remaining share.
'There are still first-time buyers out there - if you say the average cost of living salary rise is 3% per annumn and lenders will offer up to four times the average salary, this can fuel a 12% increase in house prices.
'The market can support another 10%-12% rise next year - what it couldn't sustain would be a 20%-30% increase.'
