THE growing recovery in Scotland's property market has been further illustrated by figures that show house prices are heading back to where they were at the start of the financial crash.

According to official statistics,the value of an average home in Scotland rose by 1.45% last year and is just 6% below the price in 2007. Overall, house prices in the UK have risen by 6.8%, marking the fastest increase in three-and-a-half years, and they are 0.6% higher than record levels previously seen in December.

Office for National Statistics data released yesterday also showed house prices in Scotland are now 6% higher than they were at the peak of the housing crash in 2008.

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Experts are predicting that the market will continue to recover, although there are fears that some areas may experience a house price 'bubble'.

William Zimmern, a senior economics consultant at PwC, said he expected the acceleration in property prices to continue into the spring. PwC's analysis suggests that by the end of the year, average UK property prices could edge up by another £10,000 to reach around £264,000 on average.

But Mr Zimmern said: "Our research indicates there seems to be little evidence to suggest a house price bubble at the UK level."

Ben Southwood, head of policy for think tank the Adam Smith Institute, said rising house prices reflect "a dysfunctional planning system that doesn't provide the housing people want, where people want it".

Campbell Robb, chief executive of housing charity Shelter, said the figures were a "blow" to people trying to get on the property ladder. He said: "No matter how hard young people and families work or save, these days most simply can't keep up with sky-high house prices."