THE largest drop in house prices since 1995 has been recorded in the Yorkshire and Humber region.

The Royal Institution of Chartered Surveyors says the drop has dented the confidence of surveyors nationally.

However, in the longer term, they are optimistic prices will increase as underlying economic conditions improve further, with prospects for new jobs remaining strong in 2005.

The monthly survey found that, nationally, the continued uncertainty of interest rate rises had dampened new purchase inquires, and newly-agreed sales had flattened out.

But Yorkshire and Humber bucked that trend, with agreed sales rising strongly for the second consecutive month and new instructions also showing a moderate increase.

In Richmond, Francis Brown of Norman F Brown said: "There are signs of an improving market. Last week was the busiest week of the year in terms of agreed sales."

There were indications some sellers were holding on to unrealistic expectations.

Nationally, in March, house prices fell further and at a slightly faster pace - 37pc of chartered surveyors reported a fall in house prices, down 5pc from the previous month.

In North Yorkshire, Edward Waterson of Carter Jonas, York, said: "The best property continues to be in demand with buyers and sellers in equilibrium.

"Overpriced and secondary properties are becoming more difficult to sell."

Jeremy Leaf, RICS national housing market spokesman, said that getting on the property ladder was becoming easier.

"Sellers must be more realistic if they want to secure a sale," he said.