HOUSE prices in the region have fallen for the first time in more than four years, with a further slowdown predicted.

The Halifax regional price index found that the typical cost of a North-East home fell by 0.6 per cent in the first three months of the year to £130,053. The UK average is £162,840.

However, the annual rate of house price inflation during the past year was 14.2 per cent, much higher than the national average of 9.7 per cent.

Chris Stonock, regional manager for Halifax Estate Agency, said: "The strong performance of the housing market in the North in recent years has been underpinned by two key factors - relatively good affordability and confidence in the economy."

The coastal town of Saltburn, near Teesside, was one of the fastest-growing areas in the UK, with prices rising 48 per cent last year to an average of £124,392.

Other property hot spots include Spennymoor, in County Durham, where prices rose 42 per cent, and Consett, which saw a 39 per cent rise.

The most expensive town in the North-East remains Hexham, in Northumberland, where a typical home costs £189,073.

Greater London house prices are now only 1.9 times higher than those in the North-East, compared with 2.9 in the first quarter of 2002.

The average home in Bishop Auckland, County Durham, broke through the £100,000 barrier, after a rise of 31 per cent to £132,118.

Homeowners in Darlington saw the average property increase in value by 27 per cent, to £143,342.

The lowest increase in County Durham was in Chester-le-Street, where prices rose 15 per cent to £136,448.

The average price for a home in North Yorkshire rose 14 per cent to £192,950.

House prices in Cleveland rose by a quarter to £129,084. County Durham saw a 24 per cent rise to £127,355, while homes in Tyne and Wear increased in value by 16 per cent to £136,796.