BOOMING property prices in South Lakeland are growing faster than anywhere in the UK and pushing homes beyond the reach of ordinary people, reports Justin Hawkins.

Latest figures show house price inflation in the county continuing unabated with property prices increasing by 1.7 per cent in April alone. Since January, house prices in the county have risen by almost five per cent. The increase comes on the back of a national table-topping 10.4 per cent increase in 2003.

The average terraced home in Kendal now carries a price tag of £117,000; a detached house costs on average £210,000, a semi, £144,000 and a flat, £78,000.

Estate agents report that, on some streets in the town, modest-sized houses have rocketed from £100,000 to almost a quarter of a million pounds in less than a decade.

Prices are being pushed ever higher by demand significantly outstripping supply with vendors selling quickly and easily and getting closer to their asking price.

John Hay of Two Castles Housing Association, one of the county's largest suppliers of affordable homes, said: "When the market is like this it means we are really pushing the margins to offer affordable housing. It throws into sharp focus the need for affordable housing, particularly on the bottom rung of the property ladder. With salaries here being relatively low compared to the national average, and house inflation growing at something like five times wage inflation, it's getting increasingly difficult for first time buyers."

Associations such as Two Castles try to make housing affordable by giving people the chance to buy below current market values. But, as Mr Hay pointed out, if the market value is £200,000, even a typical 20 per cent reduction does not make the property affordable for most people.

David Corrie, head of property services at Poole Townsend estate agents, said a semi-detached house on a good street in Kendal, such as Castle Green Lane, had risen from around £100,000 in 1995/6 to around £230,000 today.

"That is supposed to be an affordable mid-range, three-bedroom family home," he said.

Mr Corrie, whose firm now has four potential buyers for every house for sale, said the Government must relax planning restrictions which limit housing developments in order to balance supply and demand and stabilise prices.

Interest rates have traditionally been used to influence property prices. The Bank of England this week announced a quarter per cent increase bringing the base interest rate to 4.25 per cent. Forecasts for UK property prices in 2004 predict growth of between eight and 12 per cent. On current performance, South Lakeland looks likely to outstrip even that.

Most analysts agree there is no sign of the current boom ending. n Comment, P14