Harrogate council has appealed to the deputy prime minister for cash to help key workers hit by galloping house price inflation.
It would be the first time the government's starter home initiative was brought to the north of England.

In a letter to deputy prime minister John Prescott, council leader Geoff Webber said: "If we are to avert a crisis for young people born and brought up in Harrogate, with families and with jobs, then we must develop more affordable and shared ownership housing. We are currently constrained by unrealistic structure plan targets and reducing corporation funds."

The Housing Corporation agreed with the move, saying there was a case for it in the expensive "golden triangle" of Harrogate, York and east Leeds.

Webber said Housing Corporation money for building is also desperately needed.

York council last week set a 50% target of affordable housing on all new development sites in the city. The previous aim was 25%.

Average prices for terraced homes in York and Harrogate have reached £120,000 – four times the average local worker's earnings.

The council was forced to put families in bed and breakfast overnight on 242 occasions in the first quarter of this year, whereas in the whole of 2001 it did this fewer than 100 times.

But the council admits corporation funding for new social housing will fall well short of what is needed.

Head of development and regeneration Alasdair Morrison said even if all new housing was affordable, it would not meet demand. "We need 950 new affordable homes each year. But less than 700 of all types are being built. There has been a phenomenal upturn in prices within the golden triangle."

Grace McCrossan, corporation investment manager for Yorkshire, said: "There is a case for key-worker funding in the 'golden triangle'.

"But we must wait to see how the money in the comprehensive spending review will be divided."