LOW wages and high house prices are combining to make life in the region’s tourism capital harder and harder, a new report has warned.

City councillors will this week be told that although people in York earn more than the Yorkshire average, the city still lags a long way behind the rest of the UK.

The report says York is underperforming, given its highly-educated workforce, good position on the rail network, and very low unemployment rates.

The city council's Labour group leader Janet Looker said the figures showed a worrying trend for workers in York.

While average wages are continuing to rise, they are increasing at a slower rate than the rest of Yorkshire meaning the city could be "overtaken".

Cllr Looker said: "The issue that concerns me is when you look at earnings data and compare it with the cost of housing, the two graphs are going in different directions.

"Our earnings are not going up as fast as we would want, but housing costs – even in rented housing – are going up faster than we would like.

"The two issues are going in different directions but neither in the right way for people who want to live in York on reasonable incomes."

Developments like York Central should help by increasing office space for new employers, but are still a number of years off, she added.