HOUSE prices in Merseyside are continuing to soar but the number of sales are down by 11% on this time last year, figures released last night reveal.

The Land Registry have found that 6,488 properties were sold between April and June this year compared to 7,270 in the same period in 2003.

But as house prices continue to increase, now at almost £115,000 average compared to around £90,000 this time last year, economists suggest that the steep rise could have priced many buyers out of the market.

Group economist for Nationwide Alex Bannister said: "I would perhaps have expected a small drop in the number of sales in Liverpool following national trends, but such a sharp fall is unusual and bucks the pattern in the North West.

"It would suggest that something odd is going on in Merseyside.

"It is possible that the rise in house prices has priced some people, especially first time buyers, out of the market, reducing the number of sales.

"I would not expect the effect to be attributable to interest rate rises because it would affect the rest of the country too."

Neighbouring Cheshire has experienced a similar house price increase of almost £20,000 between second quarter 2004 and the same time last year but the number of sales stayed relatively constant at just over the 4,000 mark.

Nationally the number of sales rose by 22% compared to the previous year, with 299,986 homes changing hands during the three months.

Local authorities in the region have experienced drops in the number of properties sold, from 0.5% in St Helens to 20% in Knowsley for the period April to June 2004 compared to 2003.

Liverpool sales fell by 14% year on year, with Halton borough bucking the prevailing stable Cheshire trend.

Figures were collected by discounting properties sold for less than £10,000 or more than £1m, and there were certain exemptions like houses given as gifts and the sale of ex-council houses.

The Land Registry said 997 properties were sold for more than £1m during the second quarter of the year, 638 of which were in London.

Overall the cost of property in England and Wales rose by 17% to average £175,401 in the 12 months to the second quarter of 2004.

Greater London remains the most expensive place to buy a home, with prices there averaging £280,431, followed by the south east at £213,828.

Prices are lowest in the north and north west at £114,695 and £122,260 respectively.

Overall, Merthyr Tydfill in Wales has the cheapest property with prices averaging £64,863, followed by Kingston-upon-Hull at £65,582.

Meanwhile, a survey from property website found that 35% of househunters now expect property prices to fall during the coming 12 months, compared with 9% in January, while only 57% expect prices to continue rising.