HOUSE prices fell in Newport in 2007 for the first time in several years at the end of 2007, one of Britain's largest mortgage lenders says.

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, with hotspot towns like Ebbw Vale and Pontypool recording 11 per cent increases.

But Newport, previously tipped to continue to be a price-increase 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 index.

For Graham Kingston, of Newport-based Kingston's estate agents, the Halifax findings reflect accurately the housing market in the city during the past year.

"We certainly could not measure any increase in values. Without doubt there is a slow-down," he said.

"At the back end of last year the effect of previous interest rate rises kicked in, the Northern Rock crisis hit confidence, there was nothing happening.

"We've seen better activity levels since the New Year, but a lot depends on whether there are further interest rate cuts. We will probably see one in February.

"But I don't think we will see prices going up this year."

The Newport fall may not be big enough to help first time buyers considerably, while big price increases in places like Pontypool and Ebbw Vale may not be their biggest problem, says 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.