NORTH Yorkshire has retained its top slot in the North-East and Cumbria for the highest overall average house price of £82,050.

That is despite the fact that its growth in the last quarter of 1.6pc was the second lowest in the region according to the latest house price survey from Northern Rock.

A decrease in demand coupled with an increase in supply is causing prices to stagnate, especially in the detached market.

Two-bedroom terrace houses, now averaging £59,350, had the most successful quarter, with the highest percentage increases in North Yorkshire.

The same kind of terrace house achieved the second highest overall quarterly percentage of 5.1pc in the Durham housing market, where there has been general steady growth.

Two-bedroom flats have recovered their price from last year, now averaging £38,550 despite having dipped the previous quarter.

On Teesside, the market remained buoyant with a quarterly growth of 2.33pc, but it was not enough to lift it above ninth place in the regional table.

An average price of £63,900 showed a £1,450 quarterly increase but still remained below the regional average of £70,000.

All property types recorded increases over the quarter, especially two bedroom semi-detached bungalows, which increased to £64,200.

Alistair Laws, Northern Rock's chief valuer, said: "The housing market throughout the region remains strong although it is again characterised by a continuing shortage of supply.

"As is usual at this time of year many buyers are actively stepping up the pace of their property search in order to secure a suitable property before Christmas and this is contributing to the buoyant market conditions."

He forecast that the North-East housing market would remain healthy with only a gradual slowdown expected in the run up to the year end.

"Affordability among homebuyers remains a key factor. This is currently being helped by the continuation of interest rates at a 40-year low and the availability of a wide range of competitive mortgages."