HOUSE prices rose by 11 per cent in Ebbw Vale and Pontypool in the last three months of 2007, says one of Britain's largets mortgage lenders.

The Halifax house price index shows that in Torfaen, Caerphilly and Blaenau Gwent and affluent Monmouthshire the upward trend continues, at 16, 14, six and 10 per cent rises respectively in house prices.

But Newport, previously tipped to continue to be a hotspot, was among just four of Wales' 22 local authority areas where the average house prices fell last year.

A house in Newport cost an average £146,467 at the end of last year, £4,256 (three per cent) down on 2006, according to the Halifax House Price Index.

Bairstow Eves' Blaenau Gwent director Jeanne Fry-Thomas believes house prices in the Ebbw Vale area may fall during 2008 - giving some respite to first time buyers trying to get on the property ladder.

She said: "While last year was more difficult for first time buyers, this year should see a marked reduction in a lot of asking prices.

"People must now be aware of the economic situation across the board.

If they want to sell, they have to be realistic. I've seen some properties on the market for more than a year."

Newly-qualified solicitor Laura Cox and boyfriend Mark Lewis, who works for T-Mobile have been looking for a house in Ebbw Vale for the past 18 months and get on the property ladder.

But while they have struggled, Ms Cox, 26, and Mr Lewis, 29, who currently rent a property in the town's Tredegar Road, believe they are in a much better position than friends in other parts of the UK.

"We'd ideally like to buy in the Beaufort area, but with a maximum budget of £90,000 it is too expensive, so we've been looking in other parts of Ebbw Vale," said Ms Cox.

"We had one offer fall through, but now with the market having slowed down after Christmas, we're hoping to put in a cheeky bid for one soon.

"We're in a much better position than friends from university who live in other parts of the country.

"Prices here are lower than most places. If we lived in another area, we wouldn't be able to afford a house at all."

Jay Coleman, estate agent with Davis and Sons in Pontypool, said the area's housing market remains buoyant.

However Jamie Allan, Gwent area mortgage advisor for Southbrook Finance. He believes the credit crunch is hitting hard.

"Seven months ago anyone could get a mortgage up to 95 per cent of the value of the property.

Now, if you've any bad credit history, most lenders will only go to 85 per cent," he said.

With the average house price at £148,000 in Pontypool, this means buyers would have to find a £22,200 deposit, against just £7,400 a year ago.