THIS time last year, most people were agreed: the housing boom could not go on much longer. How wrong we were.

The cost of home ownership rocketed through the roof some time ago, and is now somewhere around the ozone layer and still rising.

A vibrant property market is a sign of a healthy economy. Low interest rates and high employment are boosting prosperity levels.

But couple these conditions with a shortage of homes, and a vibrant property market soon overheats. More people are scrabbling for fewer homes, forcing prices up to unsustainable levels.

The spectre of the Nineties slump is haunting us again. Then, a hike in interest rates and the subsequent collapse in house prices left many people with negative equity. Thousands of families went through the nightmare of having their home repossessed.

House prices are now rising faster than they were before that crash. Earlier this month we reported how York's first million-pound apartment was on sale.

Yet estate agents see no immediate end to the inflation.

This is storing up trouble. Those who have stretched their finances to the limit to afford a massive mortgage will struggle once interest rates start to climb - and that could be later this year.

Meanwhile, the biggest losers are first-time buyers. When two-up, two-down terrace houses in Leeman Road, traditionally one of the most affordable areas in York, are valued at £90,000, it puts any home out of the reach of many residents.

Young people are being compelled to leave their home city and buy elsewhere. This is creating new property hotspots in places such as Selby and Pocklington, while York schools and hospitals find it ever more difficult to attract staff to a place where they cannot afford a house.

At the same time, every spare pocket of land is being built on. Unfortunately, these are usually "executive" or "luxury" homes. Until we provide more social, affordable housing, the property crisis will only deepen.

Updated: 10:27 Monday, June 24, 2002