THE North-East could escape the worst of a forecasted slump in the housing market as the area continues to enjoy a property boom.

Financial experts are warning that homes across Britain are now so overvalued that the property bubble is set to burst, though they said there would be no repeat of the early-1990s crash.

While economists at PricewaterhouseCoopers predicted most of the country would see house prices fall by ten to 15 per cent within five years, experts said the region was not in for such a fall.

Experts said that in the same way the North-East was lagging behind the rise in prices, it was unlikely to suffer a slowdown for some time.

Jennifer Welch, regional director for the Royal Institute of Chartered Surveyors, said there was still a high demand for homes in the area.

She said: "There probably will be a slowdown or fall, but it will not be as dramatic here as in other areas where prices have rocketed. The North-East housing market remains fairly buoyant.

"This is a really good place to live. People are relocating or buying second homes in the region, so the demand is still there and keeping prices up."

Mirroring the anticipated decline, homeowners are becoming increasingly wary of cashing in on the housing boom to withdraw equity from their homes, according to figures released by the Bank of England.

Joss Harwood, director of Eldon Financial Planning, in Bishop Auckland, County Durham, believed the region's housing market was buoyant enough to support the trend for several years.

She said people were remortgaging or securing loans based on the increased value of their homes to build extensions, provide long-term care or help their children buy homes.

She said: "Even if house prices start to fall, it will be gradual. There is so much equity in homes that it would take years for a dramatic change.

"There has been no slowdown yet, but as people speculate about a fall and rising interest, there will be a change in the perception of the market and people may approach it with more caution."