Young and low paid workers in tourist hotspots are increasingly being priced out of homes, new analysis has shown.

House prices rose up to three times faster in some rural and coastal areas compared to the national average in July, Office of National Statistics (ONS) figures have revealed.

North Devon has seen a rise of 22.5%, while the UK average rose by 8%.

A lack of affordable homes could be contributing to hospitality struggling to fill vacancies, the ONS said.

The average cost of rent in the south-west of England rose by 2.6% in the year leading to August, more than double the 1.2% increase for the UK as a whole.

The ONS said the growth in demand for rental properties “appears to be exceeding supply”.

It added the fall in supply of letting was most widespread in the South West, East and West Midlands.

The ONS said: “Rising house prices and private rents mean that some workers are at risk of being priced out of living in rural and coastal areas, contributing to skill shortages in the tourism and hospitality industries that their local economies rely on.”

One couple from Barnstaple say they have been looking for a new home for five months with no success.

Sarah-Jane and Lauren Tolley have three weeks to find somewhere to live after being asked to leave by their current landlady through a no-fault eviction.

Section 21 notices allow landlords to evict renters without a reason after their fixed-term tenancy period ends.

“There were periods over the last year where there were no properties at all to rent in the town or even a few miles into the surrounding area.”

That observation must have come from people living in the places we know as property hotspots, right? Wrong.

One of the ongoing narratives we heard over the course of the pandemic was how remote working was leading people to give up city life in favour of bigger, cheaper and more rural living. For many people with desk-based jobs, there was no need to be within travelling distance of the office any more, so expensive flats in and around London and other major cities were traded in for houses in the countryside or by the sea.

Something we heard less about, though, was the impact on people living in those regions where property increased in popularity over lockdown. Lowri, a 29-year-old classroom assistant and freelance writer living in the Welsh county of Gwynedd, home to the Snowdonia National Park, says the influx of people coming to Wales over the pandemic was “overwhelming”.

A government plan to deliver discounted starter homes has left 85,000 young people waiting in vain for an affordable place to live, in a policy branded “deplorable” by a cross-party committee of MPs.

The 2015 initiative to build 200,000 homes and sell them at a 20% discount was formally scrapped this year without a single home being built. But £173m was spent buying land, a damning report by the Commons public accounts committee said. It is now on course to deliver only 6,600 homes and is being replaced by a new scheme.

The influential committee highlighted the abandoned scheme as a waste of time and resources as part of a broadside against government housing policy, which it said has been “stringing expectant young people along for years” with housing policies that “come to nothing as ministers come and go with alarming frequency” – there have been 19 since 1997.

It also criticised the Ministry of Housing, Communities and Local Government (MHCLG) for failing to say how it will reach its ambition of building 300,000 homes a year in England and accused ministers of an “alarming blurring” of the definition of affordable housing.

The analysis has found that generational progress on pay has been weak nationally, with those born in the late 1980s earning just 3% more at ages 26-28 than those born in the early 1970s at the same stage in life.

In stark contrast, those born in the early 1970s earned 16% more at the age of 28 than those born 15 years before them in the late 1950s.

While most regions had seen some improvement, millennials in the east midlands, south-east and London all earned less in their late 20s than the previous generation.

However, young people in the north–east have made considerable pay progress, with millennials earning 13% more at the age of 26-28 than those born 15 years earlier.

Funded by the Nuffield Foundation, the research also showed that homeownership rates have collapsed for young adults across the country, while the amount of money millennials spend on housing as a share of their income has rocketed.

Amid concern across the political spectrum over the difficulty facing young adults in getting on the housing ladder, the research showed that the proportion of 26- to 28-year-olds who owned their own home had collapsed by half since 1997.

Ministers have been warned that an overhaul of planning rules could cut the amount of affordable housing even further, despite Theresa May’s pledge to take “personal charge” of solving the housing crisis.

Serious concerns have emerged that an updated version of the government’s planning laws appears to alter the definition of what counts as “affordable housing” in a way that could make it less affordable.

The updated draft National Planning Policy Framework contains a new definition that has removed any direct reference to the most affordable type of property, known as social rented housing. However, it does include types of housing, such as shared ownership and starter homes, that cost far more.

Social rented housing is owned by local authorities and private registered providers and is let out to those most in need. Rents are on average about half the market value.

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Housing charity Shelter is raising the concerns in an official submission to the government’s consultation on the updated document. It also fears it will increase the use of “viability assessments”, which allow developers to limit contributions to infrastructure and affordable housing.

It comes amid growing evidence of an unaffordable housing market for many. Last week official figures showed workers faced paying 7.8 times their annual earnings to buy a home last year, up 2.4% since 2016.

The number of mortgages being offered for buyers with very small deposits has hit its highest level in 10 years.

According to data firm Moneyfacts, lenders introduced 37 new deals for borrowers with a deposit of only 5pc last month, bringing the total number beyond 300 for the first time since April 2008.

Before the crash, mortgages for 100pc, or even more, of a property’s value were common. Many were offered on an interest-only basis, meaning the capital was not being repaid, and many borrowers lost their homes when the markets collapsed.

The news comes on the same day data from estate agents Your Move suggested prices in London had fallen by 2.6pc in the past 12 months. Month-by-month prices were also down in the East of England region.

Falling house prices combined with rising borrowing will fuel fears homeowners could fall into negative equity – and risk being unable to remortgage.

But respected market expert Ray Boulger, of mortgage brokers John Charcol, said there should be no cause for alarm – even saying lenders should look to increase loan to values further.

“One of the biggest differences between now and 2008 is any high equity mortgages now need to be on a repayment basis,” he said. “While the regulations don’t ban this, the way they are structured means there needs to be a credible repayment plan, so offering interest-only at this level is very difficult.”

Last autumn, campaigners scored an unprecedented victory. The target was “viability assessments”: dossiers produced by housing developers to justify the amount of affordable housing – or lack thereof – in their developments, and which are frequently used during the construction process to shrug off previous commitments.

“Developers were saying, ‘We can’t afford to put 30-40% affordable housing in here,’ to make the profits they are legally entitled to,” says Louie Herbert, spokesperson for Bristol-born tenants union Acorn. “But all of their numbers – how much they projected to sell the houses for, how much they bought the land for – were redacted.”

Acorn, along with the Bristol Cable media co-operative, campaigned for the full release of these files. Following a public outcry, the council voted to make the viability assessments public.

Now, Herbert says, the public can examine these assessments themselves, and make sure that more affordable housing is built in their areas.

In response, Andrew Whitaker, planning director at the Home Builders Federation (HBF), argues that those without formal training “may feel that the figures set out in such assessments are ‘too high’ or ‘too low’ and make representations and decisions accordingly, rather than based on the evidence.”

For now, it’s too soon to tell if publishing the viability assessments has achieved change in Bristol. But it’s a small step that could point the way for cities such as London, where viability assessments remain pervasive, or Manchester, where in contravention of the city’s own guidelines, none of the nearly 15,000 planned new developments have any provision for affordable housing.

Bristol’s mayor, Marvin Rees, believes that it sends a signal to developers: “We’re a great city to do business in – but we want the right kind of money.”

Councils and housing associations have welcomed government plans to spend £2bn on a “new generation” of council houses and affordable homes for rent.

In her conference speech, Theresa May pledged to dedicate her premiership to fixing the “broken” housing market.

The state, she said, must get “back in the business” of building subsidised rented homes for those not able to buy.

Labour and housing charities said the plan would only help a fraction of the 1.2 million families awaiting housing.

The government said the £2bn injection could fund 25,000 homes for social rent by 2021 although the National Housing Federation said the figure could rise to between 50,000 and 60,000 if the government’s intervention unlocked, as it is hoped, a further £3bn in public and private investment.

Millennials are spending three times more of their income on housing than their grandparents yet are often living in worse accommodation, says a study launched by former Conservative minister David Willetts that warns of a “housing catastrophe”.

The generation currently aged 18-36 are typically spending over a third of their post-tax income on rent or about 12% on mortgages, compared with 5%-10% of income spent by their grandparents in the 1960s and 1970s. Despite spending more, young people today are more likely to live in overcrowded and smaller spaces, and face longer journeys to work – commuting for the equivalent of three days a year more than their parents.

Homes across half of the UK are more affordable than before the financial crisis, with Birmingham, Glasgow and Leeds among the places where the gap between earnings and house prices has fallen, a study has found.

Yorkshire Building Society research shows that with a continuing affordability crisis in London, popular destinations for people leaving the capital, such as Lewes and Exeter, have become increasingly affordable in the period since Northern Rock was bailed out 10 years ago.

The findings, based on official earnings figures and Land Registry data for house prices in 356 local authority areas, come as the number of people departing London is at a five-year high, with net outward migration of 93,300 people in the year to June 2016, 80% higher than five years earlier.

Andrew McPhillips, the chief economist at Yorkshire Building Society, said: “Across London and large swaths of southern England, which were already some of the most unaffordable parts of the country, it has become increasingly difficult for first-time buyers and those wanting to move up the housing ladder to be able to buy their first or next home.

“The north of England, Wales and Scotland present a different picture entirely, with many places, such as Edinburgh, Peterborough and Birmingham, becoming more affordable than they were before the credit crunch.

“While some northern cities, such as Manchester, are less affordable than they were in 2007, in much of the north of England, Scotland and Wales, the gap between earnings and house prices is about one-third of the average for London.”

Separate figures from the property consultancy Savills show that the average house price in London rose from £286,000 in June 2007 to £482,000 in June 2017. During this period, they increased by £8,000 in Yorkshire and fell by £8,000 in the north-east.