The craggy skyline of the North Yorkshire fishing town of Whitby is dominated by the ruins of a 7th-century abbey. A constant halo of screeching seagulls circles the sheltered harbour below. It's a beautiful spot. Mile upon mile of glorious sandy beaches flank the town to either side while, inland, stretches the wild and rugged beauty of the North Yorkshire moors and beyond these the lowlands of the Vale of Pickering.

The town itself straddles a deep natural gorge carved out by the River Esk as it flows into the North Sea. This divides the town into two sections - known as the West Cliff and East Cliff areas - that each have their own distinctive character and present a remarkable patchwork of different architectural styles.

The eastern section of the town is the more ancient and is famed for its distinctive pantile "yard cottages", many of them dating back to the 16th century, in the warren of narrow cobbled lanes and alleys around its atmospheric market place. This area is steeped in maritime history. Whalers used regularly to set sail from its harbour and herring fishing has been a mainstay of the local economy for more than 500 years. Press gangs trawled the town's taverns during the Napoleonic Wars seeking to entrap unwary seamen into naval service and it was here, too, that the great 18th-century navigator and explorer Captain Cook learnt his skills while apprenticed to a local ship-builder in Grape Lane.

Although vestiges of the town's maritime heritage remain - most notably in the daily fishmarket that is still held on Pier Road and in the giant whalebone arch overlooking the harbour - Whitby's fishing industry is undoubtedly in decline and this part of town is increasingly becoming the preserve of tourists and holiday home owners.

This western side of Whitby came into its own in the 19th century when a rail link was established. This ushered in a new a new era of prosperity for the community as the town's fishermen were able to transport their catches far greater distances to a wider network of markets. It also stimulated the local industry in Whitby jet as well as putting the place on the map as a holiday destination.

Many of the town's terraced houses date from this period. The best examples are to be found along Royal Crescent overlooking Whitby Sands. It was while living in one of these in 1890 that the author Bram Stoker witnessed a ferocious storm across the bay that inspired him to write the opening scene of Dracula.

It's not surprising to learn that house prices in the town and in the pretty nearby fishing village of Robin Hood's Bay five miles along the coast to the south have been steadily rising. "Property prices around here have quadrupled since 2000," says Nick Stephenson, of the local estate agent Richardson and Smith.

Keith Guy, the manager of Jacksons Property Service, says: "I'd estimate that as many as 70 per cent of my buyers are newcomers to the area - a mixture of retired folk, those looking to buy holiday homes or people of working age who are prepared to commute."

But the good news for prospective buyers is that property prices in Whitby now seem to be levelling out.

Fact box

Cost of living: one-bedroom flat from £95,000; two-bedroom flat from £120,000; three-bedroom semi-detached house from £130,000; small two-bedroom yard cottage in old town from £140,000; four-bedroom Victorian terraced house from £170,000; six-bedroom Georgian townhouse in St Hilda's Terrace from £455,000; seven-bedroom terraced house from £310,000.

Attractions: beautiful coastline and long sandy beaches; twice-yearly Whitby Goth Weekends; some of the best fish and chips shops in England; close to North York Moors national park; spectacular ruins of seventh-century Whitby Abbey on East Cliff; atmospheric old town with labyrinthine medieval network of yards, alleys and passages; daily fishmarket; farmers market; Captain Cook and Dracula museums; good selection of pubs including The Dolphin, The Black Horse and he Shambles.

Downside: limited shopping facilities and employment opportunities.

How to get there: trains to Middlesbrough take about one and a half hours; then onwards to London's King's Cross, changing at Darlington, takes about three and a half hours; alternatively, buses to York take two hours from where direct trains to London King's Cross take two and a half hours.