FIRST-TIME buyers in North Yorkshire are being squeezed out of the housing market by dominant buy-to-let investors, according to a new survey.

Hungry investors are gobbling up rental properties and becoming landlords of tenants who would otherwise be homeowners, according to the Royal Institution of Chartered Surveyors.

This demand leaves many first-time buyers with no choice but to rent, its latest rental market study claims.

Kevin Hollinrake, director at Hunters, York, said: "Certainly, first-time buyers in York are being priced out of the market. Investors here are buying up properties at the bottom end, normally the preserve of first-time buyers.

"It's a very unfortunate time to be a first-time buyer in York."

He said first-time buyers used to make up about 40 per cent of the market, with Hunters now seeing about 25 per cent.

Properties previously ideal for first-timers - like two-bed terraces in the South Bank and Leeman Road areas - are now valued at £100,000-plus and are being snapped up by investors. The average house price for a first-time buyer nationally is £117,000.

Mr Hollinrake blamed the failure of wages to compete with house prices and more people turning to single-living lifestyles for the first-time buyer slump.

But he said when people finally get their feet on the property ladder they may have saved substantial deposits and should be less likely to be caught by negative equity.

Today's survey says some Yorkshire chartered surveyors are urging caution as tenants' interest in rented homes cools slightly due to over-supply.

Tom Robinson, of Strutt & Parker, Harrogate, said: "A flood of properties has come on to the market from buy-to-let purchasers. This has meant that some properties are difficult to let due to over-supply."

Chartered surveyor and RICS residential lettings spokesman Jeremy Leaf said: "As ever, the owner-occupier and lettings markets remain strongly intertwined; what happens in one impacts the other.

"Many people are being pushed into renting as owner-occupation becomes less affordable. It is a harsh reality that the money which would-be first-time buyers pay in rent is paying off the landlord's mortgage and not their own.

Updated: 10:44 Wednesday, February 25, 2004