Bristol’s economy has flourished in recent years, fuelled in part by its proximity to the capital’s booming economy and overheating housing market. The west of England, and the city of Brunel and Banksy, is an increasingly expensive place to live with the highest private sector rental costs outside London, according to the Resolution Foundation thinktank.

Bristol’s burgeoning youth population is bearing the brunt, in a part of the world known not just for its heritage as a cornerstone of the industrial revolution but for its cultural scene. With typical house prices more than 10 times the average salary, that might make it tougher for the next Massive Attack or Portishead to emerge.

“The idea that you would own a home in a few years is ridiculous,” says Aidan Cassidy, a 23-year-old Bristol University graduate who is a member of a campaign group calling for cheaper rents in the area. “For our parents it was possible. Now people buying houses are only able to do so with the help of their parents, which is a select few relying on the bank of mum and dad.”

In many ways, Bristol can be used by Philip Hammond as a positive example of Britain under the Conservatives when he stands up to deliver the budget on Wednesday. He can point to more people in work than the national average, rising wages and output per worker having shot up above the UK’s pre-financial crisis levels.

Facebook Twitter Pinterest New houses on a development in Bristol. The government’s help-to-buy scheme is a ‘snowflake in the ocean’, says one young Bristol resident. Photograph: Matt Cardy/Getty Images

But Bristol’s economic success has attracted London émigrés making a break from the expensive cost of living in the Big Smoke, while the city’s two universities have also fed an additional 10,000 students into the local population of almost 450,000 people over the past decade.

Not enough homes have been built for all of these newcomers, in a city where affordability was already stretched a decade ago. The cost of a typical home has shot up at an annual rate of more than 10% in recent years, much faster than the national average.

Sheena Wynne works for a charity in the city, rents a house with her partner and finds it difficult to imagine buying a home. She partly blames “buy to leave” speculation by foreign investors in London for having a knock-on effect. Houses in the capital are bought as investment assets and left empty, house hunters are then forced out of London and that, in turn, drives up costs in Bristol.

“It’s pushing communities out of London and they’re looking for the next place to live,” she says. The 30-year-old from Brighton, who studied history at Bristol University and stayed in the city after graduating, sums up the view held by many young professionals her age across the UK: “I’m in a relatively well-paid job and even I am struggling to save money.”

Facebook Twitter Pinterest Charity worker Sheena Wynne blames foreign investors in London for driving up costs in Bristol. Photograph: Adrian Sherratt/The Guardian

An additional £10bn for the Tories’ help-to-buy scheme – a subsidy programme for house buyers – has already been announced. But for many young people in Bristol that will not be enough.

“Help to buy is a bit of a joke. For the amount you get for what you need, it’s a snowflake in the ocean,” says Ben Diamond, 23, who works for GKN Aerospace at the Airbus plant in Filton on the outskirts of Bristol.

Diamond, and 22-year-old Jamie Furnell, both young members of the Unite trade union, believe they are bearing the brunt of a housing shortage, the rising cost of living, and government austerity that has forced their older colleagues to work for longer. Furnell reckons this is creating a “bottleneck of younger people who are having to work in Tescos” around the UK.

Facebook Twitter Pinterest Jamie Furnell and Ben Diamond at GKN Aerospace’s Filton base. Photograph: Adrian Sherratt/The Guardian

The scale of the problem is such that employers are becoming concerned about their staff. Bevis Watts is managing director of ethical lender Triodos Bank, which funds green projects and social housing and employs about 150 workers in the city. “We have concerns about transport infrastructure, rising prices and affordability for the people we’re employing,” said Watts. “There is an enormous challenge to build all the houses that are needed.”

Sajid Javid, the communities secretary, gave a speech in Bristol last week, talking in the city where he grew up about the government awarding an additional £2bn for affordable housing. Yet he has also suggested Britain needs £50bn in government borrowing to fund a major housebuilding programme, an idea from which Hammond has distanced himself.

Bristol’s mayor, Marvin Rees, who became the first directly elected black mayor in the UK last year, wants Hammond to break from austerity to fund the building of more houses in the city. Rent caps could be an answer, he says, adding that the government must also devolve more power to regional authorities.

Facebook Twitter Pinterest Bristol mayor Marvin Rees outside his office in City Hall. Photograph: Adrian Sherratt/The Guardian

“Austerity has worn people down and has the resonance of hopelessness about it,” he says of the spending choices facing the chancellor ahead of the budget. “We need to start investing in cities.”

With tuition fees running at more than £9,000 a year, people from poorer backgrounds are put off higher education. Hammond will use the budget to raise the earnings threshold at which fees are repaid to £25,000 from £21,000. However, that won’t do much for Michael Keating, 20, who is studying politics at Bristol University.

He pays more than £100 per week to live in halls, and says the university should lower its costs in order to encourage diversity at an institution with more privately educated students than Cambridge.

“The debt I’m taking on almost doesn’t feel real. You’re talking about such big numbers and you’re so young,” he says. “It’s tough to take.”