HOUSE prices in the North are on the increase despite growing fears of a recession, according to a recent survey.

Research carried out by the Royal Institution of Chartered Surveyors (RICS) has revealed that housing markets in the region are the strongest in the country, with 65 per cent of contributors reporting price increases in the North-East and 78 per cent in the Yorkshire and Humberside region.

A spokesman for JWG Cameron, of Darlington, said: "The market is reasonably strong, with the exception of rural properties, which are still affected, in this region, by foot-and-mouth.

"It will be interesting to see what the future holds for interest rates. Some experts say they are certain to go down, others say they are certain to go up.''

Farms, and any property with large acreage, are moving slowly because of the foot-and-mouth crisis, he added.

Ron Greig, of Ron Greig Estate Agents, Hartlepool, said demand had improved during the past month.

He said: "It was a particularly busy June, with increased activity mainly in the middle to upper price ranges, balanced by a plentiful supply of newly built property.''

More chartered surveyors in the North are reporting price increases than in London, according to the RICS survey.

Potential buyers have not been put off by the first signs of a downturn in the economy.

A spokesperson for the RICS said: "Continued employment growth, falling mortgage rates and firm wage rises have helped to sustain the housing market at its current level.''