HOUSE prices in the UK fell last month as the market experienced its traditional seasonal slowdown.

But that was not enough to stop the annual pace of house price inflation, with average prices across the UK rising by 9.8 per cent, in the year to the end of February.

And, according to the latest figures from the Office of the Deputy Prime Minister, the North is beginning to catch up with the South.

The price of a home in the North-East has risen by 26.8 per cent in the past year, compared with 5.7 per cent in London and 4.4 per cent in the South-West and South-East.

Despite that rise, there is still a dramatic difference in the cost of homes, with the average price of a house in London at £243,231, compared with £107,449 in the North.

House prices in England now average £172,825, while property costs an average of £149,394 across the UK, excluding London.

While the rise may be good for homeowners, it is making it increasingly difficult for people to get their feet on the property ladder.

First-time buyers are now paying an average of £125,322 for a house, 12 per cent more than they paid in February last year, while other people are paying 8.7 per cent more to move up the ladder, at an average of £180,235.

Barry Davis, chairman of property investment group Blandford Estates, in Newcastle, said: "People keep talking about a boom in property prices in this region, when what it really amounts to is an adjustment. The low price of properties in this region was simply not sustainable.

"The North-East has been a well-kept secret for years, and people are now learning how great a place it is to live.

"There are literally busloads of people coming to this region from the South looking for potential properties."

However, he said: "Property is rapidly becoming unaffordable to a section of society. In this region, employers will have to be very conscious of that."