HOUSE prices in Winchester have shot up in value by an incredible third in the past 12 months, according to a new survey.

The cost of the average house in the district is now £349,375 - up 32 per cent on last year.

The figures, released by the Halifax this week, showed that Winchester had seen one of the biggest house price increases in the past year in the South East. It was beaten into third place by Godalming, in stockbroker-belt Surrey, and perhaps surprisingly, Slough in Berkshire.

Nationally, house prices rose by an average of 10.7 per cent, and 14 per cent in the South East.

Currently, a house in Winchester is £152,850 more expensive than the national average of £196,525.

But while many homeowners will be laughing all the way to the bank, it's not all good news, particularly for those desperate to get on the housing ladder.

Margaret Newbigin, Group Director of A2Winchester housing group, said the lack of housing supply and higher prices were putting enormous additional strain on the affordable housing sector.

She said: "We find that young working couples, key workers and people on low incomes, have little chance in fulfilling their home ownership dream which can have serious consequences for the economy and for public services."

She wants the Government to spend more money on building affordable homes to combat the problem.

John Leeson, managing director of Belgarum estate agents, in the High Street, said: "It does not surprise me that Winchester has bucked the trend once again as it is a guilt edged city', being just an hour from London, close to the New Forest and Solent, and with superior road connections. It's a cracking place to live!"

He added that the current market, in which demand outstripped supply, has seen numerous buyers frequently chasing just one house.

Ben Robinson, is a 26-year-old first time buyer from Hursley.

He said he was becoming increasingly doubtful about being able to buy a house in his home town because of the rising costs.

"I plan to buy soon and want to get a house in Winchester because it's where I've lived for years," he said.

"However, this popularity has meant that I cannot now afford to get on the market, and I will have to move elsewhere and look to second buy in Winchester at a later date."