The Halifax Quality of Life survey looks at how local authority areas compare, and takes into consideration 26 different factors that home buyers may consider when choosing a place to set up a home.
These factors include employment, earnings, housing affordability, health and wellbeing, education, traffic and crime rates.
Yorkshire locations are this year the only places in the north of England - discounting the Midlands - to be named in the top 50.
Hambleton was seventh, just behind Selby, while Ryedale came in at 11th and York squeezed in at 48th.
Selby scored particularly well for low anxiety levels, life satisfaction, population density, rainfall and housing affordability, said Halifax.
Leader of Selby District Council, Coun Mark Crane, said: “It’s great news, but not a surprise to those who know our area.
“The Selby district is a great place because we’ve got a fantastic mix of market towns and picturesque villages. Our house prices are lower than neighbouring urban areas, which means people get more for their money.
"This matters because it means we can attract families, which helps to grow our local workforce and our overall population to support local retailers, services and industries.
“We’re in one of the safest parts of one of the safest counties in England. This means we’re a great place for families to grow and people to stay for the long-term. Our families benefit from a top quality education sector. We’re home to one of the country’s leading further education colleges, our primary schools consistently perform well and we have a great quality independent school sector.
“And let’s not forget that we’re really well-connected too – right at the heart of Yorkshire – with easy links to Leeds, York and Hull and with the coast and Yorkshire’s national parks in easy reach.
“We’ve always known that we’ve got a great story to tell – and surveys like this demonstrate that ours really is a special place.”
Former Selby Times editor and life-long local Chris Page, who continues to work for sister titles of The Yorkshire Post, said: "Selby sometimes gets a bad press, but never from those of us who know and love its many qualities.
"We're fiercely proud of our abbey, Abbot's Staith, market place and park, but Selebians themselves are equally impressive, even if they don't always admit it."
Bernard Middleton, 75, has also lived in Selby all his life and is honorary secretary of Ye Fraternitie of Olde Selebians, founded in 1921 to "promote, cultivate and develop the welfare" of people in the town.
He said: "It's still a market town and it's got the abbey, of course, which brings people in to see that. They come from as far as South Korea, these days, because a couple of pop stars got married there."
Taiwanese pop star Jay Chou married Australian model Hannah Quinlivan at the abbey in 2015.
Mr Middleton continued: "We're also quite close to some of the big cities, with us having a bypass, we're not too far from York."
People who work in Leeds have also started to set up homes in Selby, he said.
"I like it because it's a small town. I spent 39 years working York and it was nice to leave - no disrespect to York, it was always a very nice city - but it was always nice to leave the city environment and come back to a small market town. You can tell the difference between that and a city."
East Hertfordshire has been given the top spot in the survey.
Halifax said the latest Office for National Statistics (ONS) figures indicate adults living in East Hertfordshire are among the most happy and content in the UK, with high average life expectancies.
Russell Galley, managing director at Halifax, said: "Everyone has different priorities when it comes to choosing a place to live, depending on time of life, and personal circumstances.
"Affordability will always be one of the most important factors, with getting a foot on the property ladder still difficult for some people."
The Quality of Life reading for each local authority was created by summing scores across 26 variables within eight broad groups.
Each local authority district is given a score out of 10 for each variable contained in the index. Scores within each of the broad groups are averaged and then the eight group scores are summed to create an overall Quality of Life score.
This year, weighting has been applied to the Quality of Life score for each variable based on the findings from a consumer survey carried out by YouGov between December 5 and 6 2019.