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.

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.”

England will have lost 230,000 social homes by 2020, the Chartered Institute of Housing (CIH) has predicted.

In just five years, over 150,000 of the most affordable rented homes have already been lost across the country, an analysis by the institute has revealed.

The CIH is arguing that if it is to fix the country’s broken housing market, the government must focus on affordability as well as building more homes.

According to the institute, funding for social rent, which is usually around 30-40% cheaper than market rents, was cut by the coalition government in 2010, instead targeting funding towards “affordable rent” homes, which can be up to 80% of market rents.

Most of the losses have been due to homes being converted to “affordable rent” or sold through the Right to Buy scheme, with some being demolished, the analysis claims.

Terrie Alafat, chief executive of the CIH, explained that for those on lower incomes, the only affordable option is often social rent: “It is simply unacceptable that we are losing so many of our most affordable homes at a time when more and more people are in need.”

The controversial “granny annexe” tax is on course to be repealed by the Government after a Telegraph Money campaign.

A proposed amendment to the Finance Bill will remove the tax, which would leave anyone who buys a house with a self-contained annexe liable for a stamp duty surcharge that could increase the buyer’s tax bill by thousands of pounds.

The stamp duty surcharge means that anyone who buys an additional property has to pay an extra 3 percentage points on top of the standard tax rate – which, as Telegraph Money revealed in April, originally included properties with annexes.

Letting housing association tenants buy their homes at a discount will be disastrous for rural communities, according to a leading academic.

Government plans to extend the “right to buy” will make an existing housing shortage worse, said Professor Mark Shucksmith, Director of the Newcastle University Institute for Social Renewal.

And the problem will be particularly bad in rural areas – where house prices are highest, he said.

But the policy was welcomed by North East MP Anne-Marie Trevelyan, Conservative MP for Berwick, who said funds raised from the sell-off would be used to allow councils and housing associations to build more homes.

It comes as a senior civil servant criticised the policy, which was one of the Conservative Party’s flagship manifesto promises during the general election campaign.

The Government is to extend the right to buy their home at a discount, which currently applies to council tenants, to 1.3 million housing association tenants.

The latest government policy change designed to get Britain building proposes that a developer’s obligation to build affordable homes should be waived if they are building 10 homes or fewer.

Section 106 obliges developers to make a certain percentage of new homes affordable. In 2013, these obligations delivered 66% of homes in rural settlements. In the government’s affordable housing programme, 75% of new affordable rural homes were built through section 106 between 2008 and 2011.

The campaign group Action with Communities in Rural England (Acre) has highlighted the case of Dorset, where nearly 90% of rural developments are for 10 homes or fewer. Figures from local authorities in Devon (also cited by Acre) suggest that affordable homes developed on sites of fewer than 10 homes through section 106 obligations can account for up to 27% of all homes built in an area.

In a rural context even a 10-house threshold may lead to multiple infill developments that in combination induce unsustainable strains on village or town services, pressure which is planned for when larger developments are approved.

But freedom of information disclosures bureau show that over five years more than 2,300 affordable homes have been axed from housing schemes across the UK even after builders and councils signed off section 106 legal agreements specified these homes must be built. Section 106 is a clause within the 1990 Town and Country Planning Act that provides a mechanism to recoup contributions from developers for infrastructure requirements to enable a scheme to go ahead. It has become the main way affordable housing is delivered. But under new legislation that came into force in April, developers now have the ability to fast track challenges against a “section 106” if it can show that building the low-cost homes required makes a scheme unviable.

In Cheshire, a council decision to allow a consortium of leading housebuilders to axe 252 affordable homes in the 1,200-unit Winnington Urban Village in Northwich after legal sign-off has “opened the floodgates” to developers requesting similar reductions, says Labour councillor Brian Clarke. Cheshire West and Chester council says that under the revised arrangement, money for affordable housing “will be available if the development can afford it”.

In south Devon, research by the bureau shows that 109 affordable homes have been scrapped after legal sign-off. Anne Fry, an independent Teignbridge district councillor, warns: “Developers are just picking us off at the moment.” She says she and her colleagues struggle to cope with the technical demands of developers seeking to reduce affordable housing contributions.

The district council states: “Teignbridge has not lost 109 affordable homes through the s106 process – those homes would never have been provided because the developments were not viable. By demonstrating flexibility and an awareness of market conditions, Teignbridge has ensured the delivery of a viable level of affordable housing.”

Councils are bracing themselves for a big increase in retrospective appeals by housebuilders. Ten of the biggest builders – which between them own enough land to build more than 300,000 homes – together made pre-tax profits of £1.1bn last year, according to bureau analysis.

Mark Carney, the Bank of England governor, has delivered a warning to home owners about the risks of rising interest rates as Threadneedle Street made clear it was keeping a close eye on developments in the housing market.

Carney said that people should check to see if they could still afford their repayments on their home loans, when he said, “rates rise, as they will, when the recovery takes hold”.

Speaking on ITV News Anglia, he reinforced the message from another senior bank official, Paul Fisher, saying both borrowers and lenders should be careful not to overstretch themselves.

Fisher, Threadneedle Street’s executive director of markets, rejected the idea that a property bubble was emerging but stressed that the bank was alert to the risks of another boom-bust.

His comments came as latest construction figures revealed a strong increase in private house building, offering a counterpoint to mounting fears that the ground was being laid for a new housing crash.

Fitch Ratings has become the latest critic of the government’s Help to Buy housing scheme, arguing it is likely to boost profits for builders and banks but damage the UK economy.

The ratings agency said the second phase of the scheme – which will see the government guarantee mortgages on homes bought for up to £600,000 from January next year – would probably push up prices and increase taxpayer liabilities without helping to alleviate Britain’s chronic housing shortage.

The first part of the scheme has already been providing loans for buyers of new build homes since April.

“The scheme, along with the initial phase that began in April, could have an impact on sovereign gross debt and its dynamics, particularly if there is strong pent-up demand as the tighter loan-to-value ratios that have prevailed since 2008 are relaxed,” Fitch said.

“For housebuilders the main benefit from the second phase of the scheme will come from rising house prices, rather than increased volumes.”

One million homes for rent needed by 2021

Almost a million affordable rental homes are needed by 2021 if England is to stave off a homelessness crisis, a study from Cambridge University has found.

A “severe” shortfall in rented housing is leaving the most vulnerable people out in the cold, research shows.

The country is already almost 300,000 short of the number of homes it needs at below-market rent. Sub-market rental property includes council, housing association or private rented sector units accessible with housing benefit. The greatest shortfall is in London, where almost 190,000 more sub-market homes are needed.

The shadow Housing Minister, Jack Dromey MP, said: “This is yet more evidence of the biggest housing crisis in a generation. The Government’s failure is having dramatic consequences for people all over the country.”

Housing Minister, Mark Prisk, said: “420,000 social homes were lost under the previous administration, but we are building 170,000 new affordable homes for rent and affordable home ownership by 2015, and are planning to accelerate the building rate.”