House prices in north-east England increased by just over 10% during 2002, according to new figures from Northern Rock.

The bank said strong demand boosted by a shortage of available properties and the lowest mortgage rates for more than 40 years continued to support steady price growth.

At the bottom end of the scale, values increased by just 5.32% to an average of �73,250 in South Tyneside compared to Gateshead with the average cost of a home rising by 13.9% to �67,200

Northumberland was close behind Gateshead with a rise of 13.74% to �75,750.

Cheapest houses

Alistair Laws, chief valuer at Northern Rock, said: "The housing market throughout the region continues to exhibit steady price increases in most sectors.

"Indeed some regional hot spots reported annual rises of 20% or more."

He said demand was still bouyed by a general lack of available properties and the market continued to benefit from low interest rates and affordable mortgages.

Northern Rock said it expected prices to increase by between 7% and 9% during 2003, with certain hot spots such as parts of the Jesmond and Gosforth areas of Newcastle seeing double-digit growth.

According to the group, Sunderland is the cheapest place to buy a home with prices averaging �62,400, followed by Teesside at �65,650.

Newcastle is the most expensive area, with the average property there costing �84,750.