HOUSE prices in Dorset are stagnating, according to new figures.

The latest survey on house prices revealed that the county saw zero growth last month following several years of constant rises.

According to a survey by property company Home-track, the average house price for the county remained steady at £169,700, with terraced property selling for £117,900, while a detached house fetched an average of £236,100.

The survey, which collects data from 3,500 estate agents across all 2,200 postcode districts in England and Wales, reveals that average price levels nationwide are also unchanged at £135,200.

The figures show that Dorset is the eighth most expensive place to buy property outside London.

The number of properties coming on to the market in the South West rose by 3.7 per cent, and the amount of sales agreed also increased - by 5.4 per cent - helping sellers in the region to achieve 93.4 per cent of their asking price.

Roger McGhee, a fellow of the national association of estate agents, who has an office in Thomas Street in Weymouth, said the survey paints an accurate picture of Dorset's housing market.

"The market levelled out locally in March of this year when some over-priced properties were adjusted and since then prices have steadied, but it's been busy at that level.

"The last couple of months have continued to be very busy, which is unusual for the summer because people tend to be thinking about other things, like going on holiday, but it's been our best July and August for five or six years," he said.

"I expect things to continue in much the same way for the rest of the year, but after that we have to start looking at interest rates and other economic factors."

Hometrack's housing economist John Wriglesworth said: "In terms of price changes there has been nothing happening since September and the housing market remains dull as ditchwater.

"Activity levels are, however, picking up slowly and better sale prices are being achieved. Demand growth is still not matching supply, but the market is certainly looking more positive," he said.

The hometrack forecast predicts that year on year property prices will show a three per cent growth in 2003.