THE North-East suffered the UK's worst slump in annual house price inflation during April, and house prices continued to fall last month, it emerged yesterday.

The latest housing survey by the Royal Institute of Chartered Surveyors (RICS) found the number of its members reporting a decline in house prices was at its highest since November 1992, with 49 per cent reporting falls last month.

In the North-East, an increase in the number of properties on the market forced prices down.

Stuart Allan, of Broadley and Coulson, in Bishop Auckland, County Durham, said: "More properties are coming on the market now that spring is here.

"Buyers are more discerning and are driving hard bargains, with many properties selling at five to ten per cent below asking prices."

The study found that sensibly priced properties were selling, while those in chains with unrealistic hopes were holding the system up.

Sunderland chartered surveyor Paul Airey said: "Correctly valued property is still selling, but those with over-optimistic expectations are being left high and dry. Instructions at over-optimistic values are creating blockages in chains and are holding the market back."

The findings mirrored the results of a report from the Office of the Deputy Prime Minister (ODPM).

That found that growth for the 12 months to April slowed from 19.4 per cent in March, to just 11.9 per cent.

Although the region saw the biggest drop, the fall was repeated to a lesser extent across the rest of the UK.

However, the region still has one of the UK's highest property inflation rates, beaten only by price rises in the North-West, and is well above the national average of 6.9 per cent.

And the North-East still boasts the lowest average house price in England, at £128,053. The national average is £191,081. The region with the highest average house price is London, at £263,525.

ODPM officials said their data was not seasonally adjusted, and that March's figure were distorted by the early Easter.

Overall, house prices fell by 0.8 per cent in April, as buyers refused to pay prices demanded by sellers of detached properties.

The cost of the average detached house fell by 3.5 per cent during the month, while the sale price of flats was 0.4 per cent lower.

The report also found that first-time buyers were spending an average of 9.8 per cent more on their first property than they were a year ago, although the increase was about half that of the year-on-year figures taken in March.

People are paying an average of £150,133 to get on to the property ladder.

Published: 14/06/2005