HOUSE prices in two neighbouring towns are being driven up because of the impact of last year's devastating floods - and first-time buyers are being hit hard it has been claimed.

Experts say that, because of difficulties encountered trying to sell flood-hit homes in Malton and Norton, there has been a major increase in demand for other properties.

Estate agent William Billing, of William Brown, in Malton, said there was a chain reaction of events forcing prices up and hitting first-time buyers in the pocket.

"Most of the properties in Norton, Malton and Old Malton that flooded were ones which first-time buyers would go for," he said.

"Because they have been flooded, it is difficult to sell them mainly because people are unable to get insurance.

This has meant that there have been something like 40 fewer houses for first-time buyers available on the market.

"As a result, the demand from first-time buyers has been squeezed and this has created a higher demand which has driven up prices."

Mr Billing said this would only be countered if under-writers began insuring first-time buyers of homes which have been flooded.

"It would also help if there were more houses available for sale because this would loosen the pressure," he said.

However, John Rounthwaite, of Rounthwaite and Woodhead estate agents, said a steady rise in house prices was down to a buoyant market.

"Prices are going up generally. I would not say that this is on account of certain homes being affected by the floods," he said.

The flooding crisis of last October and November wreaked havoc in the twin towns, which were hit by record-breaking floods for the second time in 18 months. Many residents have yet to return home, although the Environment Agency has announced a £4.1m scheme for flood defences to give the area greater protection.

But residents who purchase properties which have been hit by flooding have found cheap prices. First-time buyer Louise Northrop, who has a home in Norton, said: "I am concerned about being flooded, but I'm pretty confident the flood defences they are proposing will work."