A boom in second home ownership in Midland shire counties is pricing first-time buyers out of the market, the Government fears.
Ministers reacted to figures revealing the number of registered second homes in Staffordshire, Shropshire and Worcestershire had shot up.
They said they recognised "the concerns that are felt about the impact of second home ownership on the affordability and availability of homes for local people".
An inquiry into the supply of housing in rural areas is to report back in March 2006.
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The Liberal Democrats, who obtained the figures, warned the boom will be further fuelled by new rules allowing personal pension funds to invest in residential property.
The statistics, released by the Office of the Deputy Prime Minister, revealed a 30 per cent increase in second home ownership nationwide over the last two years.
But that figure masked enormous rises in some hotspots, with Shropshire and Staffordshire among the biggest.
Second homes in Newcastle-under-Lyme, Staffordshire, soared from just 16 in 2003/04 to 1,176 in 2005/06.
The increase was also significant in Telford & The Wrekin, Shropshire, where the number rose from six to 282 in the current financial year, and Malvern, Worcestershire, where the number rose from 85 to 416.
Housing Minister Yvette Cooper said: "The ODPM recognises the concerns that are felt about the impact of second home ownership on the affordability and availability of homes for local people."
The Minister added that the case for "Government intervention, through planning control or otherwise, on second homes" would be considered.
A Government review, chaired by television journalist Elinor Goodman, is considering new planning laws that could prevent the sale of country homes to wealthy town-dwellers, while those already owning rural retreats may be hit with higher council tax bills than their neighbours.
But the Liberal Democrats accused the Government of making the problem worse through changes to pension laws.
From April 6 next year, self-invested personal pension funds will be allowed to invest in residential, as well as commercial, property.
This will encourage the sale of domestic properties as investments, Lib Dems claimed.
Sarah Teather, the party's local government spokeswoman, said: "There are already record numbers of second homes, with young people priced out of the market in property hotspots across the country.
"Yet the Government has just opened the door to a tidal wave of investment in second homes, by allowing people to invest residential property in personal pensions."
A recent report by the Halifax suggested prices had risen faster in the countryside over the past decade than in urban areas.
The average rural house price increased 321 per cent, to #231,053, compared with a 168 per cent rise in towns, to #197,051.
New buyers accounted for just 16 per cent of all purchases in 2004, compared with 27 per cent ten years previously, while the number of second homes has increased to 1.4 per cent of the rural housing stock, as against just 0.3 per cent of the urban stock.
