A NORTH-EAST town continues to be one of Britain's top property hotspots, according to a new report.

Halifax, the country's biggest mortgage lender, has released figures that show the North-South divide is closing, at least when it comes to property prices.

The top ten towns in the latest survey of house price increases are all outside the traditionally affluent South-East.

The railway town of Crewe, in Cheshire, has experienced the biggest leap in the past year, with prices rising by 58 per cent.

Four of the top ten are in the North-West, including second-placed Carlisle at 55 per cent, and three are in Scotland.

Darlington, which has regularly featured in other similar lists, comes in seventh, with houses prices rising by an average of 48 per cent in the past year.

The North-East is the top hotspot region in the country, with an annual increase of 35.9 per cent, taking the average price of a house to £122,756.

Halifax chief economist Martin Ellis said: "The South enjoyed most of the boom two or three years ago, now it's rippled out across the Midlands to the North.

"It is being driven by low interest rates and high employment. People are more confident and like to invest their money in property."

Steady growth in the North-East means the difference in house prices between London and the rest of the country has fallen to its lowest level in five years.

A house in London is double the cost of one in the North-East, compared with three times more two years ago.

Mr Ellis said the downside is that increasing numbers of first-time buyers in the North-East are facing difficulties getting on to the housing ladder.

And he predicted a slowdown in the region's housing market by the end of the year.