INVESTORS searching for alternatives to the increasingly volatile stock market are snapping up cheap properties in the North-East to rent out.

The housing market may be slowing in the South and South-East, but according to mortgage lenders in the region the ripple effect has yet to spread to the North-East, and the market looks like remaining buoyant this year.

Investors are taking advantage of the lowest interest rates since 1955 and, with scores of buy-to-let mortgage deals available, are snapping up cheaper properties to rent out.

The strength of the region's housing market was underpinned by the National Association of Estate Agents which released details of their monthly property survey showing the housing market had a good January.

Paul Reynolds, chairman of the North-East branch of the National Association of Estate Agents, said: "With a crisis of confidence in the stock market, pensions and general shares-backed savings schemes, people are finding property is offering a more secure future.

"We are finding people with inherited money or perhaps a lump sum from an early retirement package are looking at property as an investment.

"And for £100,000 or so you can buy two houses up here for the price of one somewhere more expensive."

Last year, house prices in the North increased by more than 10 per cent with some areas such as Gateshead reporting increases as high as 13.9 per cent.

Earlier this year, four North-East towns featured in a list of the top ten cheapest places to buy a house in the country. They were Stanley and Peterlee in County Durham, Hebburn in South Tyneside and Ashington in Northumberland.

At Robinsons Lettings, in Durham, the number of new landlords has doubled during the past year to about 400.

Trainee property manager Louise Peaker said: "The landlords can be any age from 20 up to 60 plus - basically everybody and anybody at the moment. We get a lot of people looking for students houses in Durham, the big terraced houses in the city centre are popular."