You can still snap up a bargain in Lancashire

The regeneration of the north west is boosting Lancashire's profile but you can still snap up a bargain home, says Graham Norwood

Condoleezza Rice recently visited it, while the 19th-century French novelist Balzac declared it a county so beautiful that it is "where women die of love". It also inspired the psychologist Carl Jung, was where Trevor Howard fell in love with Celia Johnson in Brief Encounter, and was supposedly the favourite haunt of Shakespeare.

Yet Lancashire - England's 17th largest county with the eighth largest population - has been something of a backwater in property terms.

Its dramatic rural barn conversions and classic terraced houses are as overlooked as the county's history, in the shadow of its more fashionable neighbour Yorkshire.

Lancashire contains plenty of urban areas - chiefly Liverpool and Manchester, as well as Blackburn, Burnley, Oldham, Preston, Rochdale, Warrington and Wigan - but also has startling countryside, which in property terms represents outstanding value for money.

Across the whole of Lancashire the typical house price is just £118,500 according to Hometrack, a price index based on estate agents' data. The typical detached home is £172,000 and an average terraced house just £65,300.

Compare that to the better-known north Yorkshire property market, where an average home costs £165,000, with detached properties hitting £224,300 and terraced houses £111,900.

"There's no comparison. Not only are prices lower but the housing stock is just as varied, the areas less dense and with a much higher proportion of period properties outside of the cities. Roads are less congested, too, which is a big factor these days," says Tiff Johnson, a local buying agent who operates in both Yorkshire and Lancashire helping companies to relocate staff from the South.

The rural property market has low-cost villages where small terraced properties still cost £60,000 or less, although expect to pay up to 10 times that amount for a dramatic farmhouse or barn conversion. Even so, they are perhaps 70 per cent of the price they would be in Yorkshire, and 50 per cent of that in southern England, according to valuers from the Royal Institution of Chartered Surveyors.

For those who take the plunge and move to Lancashire, there is no shortage of natural beauty. Pendle Hill is a mass of millstone grit covered with peat, once the scene of witch burning and now the centre of Lancashire's annual Hallowe'en festivities. Higher still is Coniston Old Man, a 2,633ft fell that is the county's highest point, overlooking Coniston Water where Sir Donald Campbell died in Bluebird in 1967. To the west it offers dramatic views of the Isle of Man.

Equally attractive is the Ashton Memorial, an Edwardian folly on a parkland hill in Lancaster, which has been described as Lancashire's Taj Mahal. Forty minutes' drive away is the Blackpool Tower, which remains the county's best known landmark - perhaps soon to signify the gambling capital of the UK, too, if Government plans succeed in making it the UK's version of Las Vegas.

For property investors wanting a more reliable return than that offered by the roulette table, there have been few markets more buoyant than Manchester city centre.

Although there are signs of over-saturation with flats, property prices in the centre have risen by an average of 8 per cent per year since 2000. Now investors are preparing for an influx of up to 2,000 BBC staff, relocating from London between 2007 and 2010. There are already 12,000 people in Manchester city centre - a decade ago it was only 6,000 - and another 4,000 flats will be built by 2010. Salford Quays, a regenerated area of new homes and cultural facilities 15 minutes west of Manchester by tram, has plenty of lofts for sale in converted warehouses.

City prices throughout Lancashire are much cheaper than in equivalent parts of Yorkshire, according to data from the Land Registry. Preston's average price is £137,553, Bolton is just £100,840 and Lancaster is £136,432; compare that with York on £177,307, Leeds on £156,863 and Harrogate with £234,286.

Analysts are quick to point out that so-called "city-centre living" - the building of thousands of new, central apartments - is not seen in Lancashire outside of Manchester, but accounts for the high prices in many Yorkshire cities.

However, a dramatic rise in Lancashire's student population may soon create a new investment market. The Preston campus of the University of Central Lancashire has 35,000 students, making it one of the largest in Europe. "Buying student accommodation in secondary locations outside the main city centres would make a good long-term investment," says Richard Donnell of Hometrack.

The student surge and increased investment in Manchester and, to a lesser extent, Liverpool, have been complemented by the arrival of significant numbers of companies previously located in the Midlands or southern England.

JP Morgan, Coutts, Unilever, Alliance and Leicester, US Airways, Bosch, IBM, the Bank of New York, Bank of Scotland and O2 are firms that have established a presence in Lancashire over the past two years. Now Smiths Medical, manufacturers of hospital equipment, is bringing 530 jobs to Rossendale.

"The advantages to employees are obvious: cheaper homes - at least until the numbers relocated cause a shortage - plus less commuting and, arguably, a more pleasant place to live and bring up families," says a spokesman for Fisher Wrathall, a Lancashire estate agency.

The result has been a turnaround in the local market. "For the first time in nearly 12 months prices are on the rise, with people actually bidding more than the asking prices for individual high quality country houses," says Andrew Holmes of estate agent Carter Jonas, which sells homes in Lancashire and neighbouring counties.

At last, it seems, Lancashire may be getting noticed for more than its Northern charm, its unlikely visit by the US Secretary of State, and its claim to comedy fame as the county that gave us Victoria Wood, Steve Coogan and Peter Kay. It's certainly no longer grim up North.