TWO years ago, a two-bedroom house in Darlington's popular Denes areas sold for £40,000 or less.

It was a hotbed for first-time buyers looking to get on the property ladder but not wanting to get mortgaged to the hilt.

In today's property market, with many of the homes being snapped up by investors, first-time buyers still look to the Denes for affordable housing - but can now expect to pay anywhere between £65,000 and £80,000 for the same properties.

And the harsh reality is that with average earnings in the North-East only £20,000, many of those first-time buyers wanting to buy a property based on a single wage are simply unable to afford a terraced home in the Denes and are having adjust their ambitions to other areas, such as Eastbourne.

A report by the Halifax suggested there were only four areas of the North-East that first-time buyers could realistically afford, but many estate agents in the North-East said affordable housing did still exist in rising areas such as Darlington and new buyers should not find themselves priced out of the market.

Chris Stonock, regional manager at Halifax, said a lot of first-time buyers were couples who were able to get a larger mortgage on the strength of two wages.

He said: "First-time buyers still have a better deal because prices are still low here. I do not think we are at a stage now where it is impossible to get on the property ladder.

"The question is, what is acceptable housing? Once upon a time, it was simply to get a roof over your head but now, as people become more affluent, they want houses to match."

He said many people were choosing to move to other areas of the North-East to get more for their money.

For example, buyers could buy a more substantial £100,000 house in Consett, County Durham, than in Darlington.

Simon Wright, of Robinsons estate agency, said many first-time buyers were facing competition from investors.

He said: "First-time buyers are competing with a lot of investment money. An investor tends to look at property more in terms of what return they will get and they want their property to be a rental investment.

"There has been exposure in the national media about prices in Darlington and that has had a knock-on effect.

"Investors are asking where they should put money and are looking at Darlington. It is a very good place to invest."

While Hartlepool and Darlington have come out top for house price rises, estate agents said this was affected by the low base prices of property in the areas during the preceding years.

According to the Halifax, an up-and-coming area in the North-East is Peterlee, in east Durham. Agents have warned that because properties are so cheap in Peterlee, they are selling fast and, in the coming months, first-time buyers will find it increasing difficult to buy their first home.

Sunderland is also touted at a place to buy a house as the regeneration of the city gathers pace and attracts people from other areas, such as Newcastle, with the aim of buying more affordable homes.

In Middlesbrough, the hot spots continue to be Linthorpe, Marton, Acklam, Coulby Newham and Nunthorpe, and first-time buyers are being priced out of the market because demand for homes is more than supply - a theme common to many parts of North-East.

Stockton, most notably, is experiencing such a trend, with most properties selling within weeks.

Halifax said Consett had seen an upsurge in interest from property buyers seeking to relocate from more expensive areas of the North-East, such as Tyneside and Durham.

The opening of several high street stores and services had boosted the area's appeal.

Alhough agents are adamant that affordable housing is still available to first- time buyers, areas such as Richmondshire, in North Yorkshire, are being badly hit by the property boom.

A lack of low-cost homes has been identified as a major problem in the county, particularly in rural areas, forcing first-time buyers to move from the towns and villages where they were raised.

Richmondshire District Council is working to increase the number of low-cost home and recently announced Government funding to create 115 homes in the next two years.

If property prices continue to rise elsewhere in the region, other councils maybe forced to follow suit.