Home prices have soared by three times the national average in the wake of Brighton and Hove getting city status.

New research found they rose by 25 per cent from the fourth quarter of 2000, the year in which Brighton and Hove was declared a city, to the corresponding period last year.

The figures will fuel fears that many people are being priced out of the city.

Research by property advisers Knight Frank also showed commercial property prices have boomed.

Just four per cent of retail units in the city were vacant this January, down from seven per cent 12 months earlier.

Report author Danielle Titcombe said: "In Brighton and Hove, city status has provided a very positive and beneficial effect to the area.

"The strength of the residential market is a clear sign that it has been firmly placed on the map for home buyers and it is likely to be partly the result of its improved profile."

She cited firms such as Kimberly-Clark, Thomas Cook and Inkfish which had set-up in the city recently.

Emma Goodford-Broer, Knight Frank partner responsible for Sussex, said: "It is very clear that a number of major inward investors regard cities more seriously than towns.

"The result of city status has been an extremely positive effect on the economy through to both commercial and residential property prices."

But Andy Richards, Brighton and Hove branch chairman of public services union Unison, was less enthusiastic.

He said: "It never ceases to amaze me how people think rising house prices is good news.

"The concern we have is that ordinary people cannot afford to live here any more and that has serious knock-on effects for organisations like the council, which cannot recruit qualified people.

"There seems to be a process of accelerated gentrification in Brighton and Hove and more and more well-off people are using it for second homes."

Wayne Gibbs of the Brighton office of mortgage brokers Charcol, said the market was beginning to slow.

He said: "Brighton is still a hot-spot but it will not see that sort of sustained growth from now on."

He said Burgess Hill had now overtaken Brighton as a sought-after place, with properties selling in around three weeks compared with six in Brighton.