The report reveals that the North East has had the fastest increase in house prices in the past five years.

However the document – researched by independent economists Oxford Economics – forecasts a fall in house prices through to 2011. Prices will then rise rapidly creating further supply and demand problems.

The average house price in Northumberland in 2007 was almost £180,000 while the average local income is around £17,200. Nearly 9,800 households are on the housing wailing lists yet only 90 new social homes were built last year.

In Berwick, house prices cost 13 times incomes yet no new social homes have been funded there for 2008/09. Berwick is the fifth and Alnwick is the 20th top place in the country for second and holiday home ownership.
North East Home Truths 2008 that shows that despite the ups and downs of the housing market the need for more social housing is greater than ever.

In the North East:
House prices have risen 87 per cent in the past five years, faster than any other English region.
Since 1997, house prices have gone up 161 per cent while average incomes have risen just 35 per cent.
Prices will fall in the region through to 2011 (falling 5.1 per cent in 2009 and 1.3 per cent in 2010).
Prices will then rise rapidly, growing 8.6 per cent in 2012 and 9.6 per cent in 2013.
The average house price in the region in 2013 will be £163,600, a 15 per cent rise from 2007.

The federation, which represents the region's housing associations, says the report shows that despite some calls to the contrary it is critical that the Government continues to invest in new social housing.

Monica Burns, North East regional manager, said: "The housing market varies considerably throughout the North East. For example prices in Castle Morpeth are more than double prices in Hartlepool. The recent drop in house price offers no comfort. It hurts homeowners paying more for a home than it is worth and does nothing for those trying to get a foot on the property ladder!

"North East Home Truths 2008 shows that despite concerns about the credit crunch, house prices across the North East have risen faster than anywhere else in the past five years and will increase further over the next five years. Northumberland has the largest affordability gap in the region, a massive housing waiting list yet only a tiny amount of new social homes are being provided. Unless more social housing is provided the supply and demand mismatch will continue to grow."