HOUSE prices in Blackwood and Ebbw Vale rocketed by more than 40 per cent in Britain's largest increase in the last year, the Halifax said today.

But Phil Delaney, regional manager, said the housing market was clearly slowing in Wales where prices had risen by 93 per cent over the past three years, ranking Wales second of the 12 UK regions.

He said: "House prices have risen by 9.9 per cent for the year compared with growth of more than 30 per cent a year ago.

"House price trends in Wales are broadly in line with the UK-wide picture whereas a year ago Wales was one of the best performers in the UK."

The housing market hotspots in Wales were Ebbw Vale with a 42 per cent increase to £104,126 and Blackwood with a 41 per cent gain to £138,569. Mr Delaney said that first-time buyers were struggling to buy properties in many Welsh towns and this had been a key factor behind the market's slowdown with Chepstow one of the areas affected by this.

The Ebbw Vale and Blackwood booms are believed to be caused by an influx of people from cities like Cardiff and Bristol into cheaper areas. Councillor David Wilkshire, who represents Rassau in Ebbw Vale, said: "If you already own a property these rises are an advantage and it adds to your investment.

"But at the other end of the spectrum young people are unable to afford a house."

Blackwood councillor Kevin Etheridge has first- hand experience of the affect house price rises have had on first-time buyers.

His daughter was unable to afford a property in the town and had to move to Tonyrefail.

"House prices are just completely out of proportion for young people and they are forced to move out of their local community and as a result community spirit in the valleys seems to be dying."

Caldicot is still one of the most expensive places to live in Wales with an average house price of £164,601 in the town's surveyed by Halifax. The average cost of a house in Newport rose by 18 per cent to £136,916.