YOUNG single people must be earning at least £20,000 a year to afford to buy a house, according to figures.

A report into the housing needs of young people in Harrogate district has found that they are struggling to find homes in the area if they want to move back after studying at university.

Businesses in the district are also having difficulties recruiting young staff because they are having to commute long distances from homes in cheaper areas.

Figures from the Land Registry show the average price of terraced housing in the district has increased from £148,700 in mid-2003 to £174,584 by the end of last year.

Harrogate Borough Council has compiled a young persons' housing strategy to address the problem.

A report said: "Businesses are concerned that this commuting both in and out of Harrogate is causing congestion and hindering their business growth and efficiency.

"Business also express concern that too little of the economic development in this district is outside Harrogate town -in the market towns and rural areas."

The council has come up with a series of recommendations as part of the strategy.

These include improving the image of young people as tenants and making sure housing advice services offered by the council are marketed effectively.

Early discussions are also taking place about setting up a Youthbuild programme, in which young people are offered training and employment opportunities in the construction sector.

They could be able to refurbish homes run by a housing association and then live in them.

Dawn Saxby, the assistant director of policy and private housing, said: "The difficulty of young people in finding suitable accommodation within the Harrogate district has implications for staff recruitment and retention, and this has knock-on effects for the district's wider economy.

"Young people in rural parts of the district also appear to suffer greater potential disadvantages and consequences from being unable to obtain suitable local housing."

On Tuesday, North Yorkshire County Council said it had secured Government approval to use money raised from reducing council tax discounts on second homes for affordable housing projects.

In Harrogate district, ten schemes providing 41 homes have been planned at a cost of £880,000.