HOUSE prices have undergone the longest period of growth in seven years, according to a new report which shows that average property values have grown by 4.3 per cent in the last 12 months.

The latest study by LSL Property Services/Acadata found that house prices are now recording the type of growth last seen during the boom of 2007, with markets improving across the country.

Latest figures show that house price growth occurred in 87 per cent of local authority areas in Scotland between May 2013 and this year. A new record house price has been reached in Aberdeenshire, where the cost of an average property rose to £224,803.

But the number of houses changing hands fell by three per cent as the effects of the Mortgage Market Review, which involves greater scrutiny of borrowers' income and expenditure, came into force.

Estate agents have also warned that confusion over what currency would be used in an independent Scotland is putting off foreign investors from buying into the top end of the market.

Donald MacLellan, chairman of Walker Fraser Steele Chartered Surveyors, part of LSL Property Services, said: "The view of the housing market recovery in Scotland is dependent on whether it is looked at through average prices or current volumes.

"We are now seeing the longest sustained period of price growth in seven years. Prices have not climbed as steadily every month since December 2007. Not only this, but growth has been established across the country, with 87 per cent of the local authority areas in Scotland enjoying annual average house price rises."

Overall, house prices in Scotland have risen 4.3 per cent, equal to £6750, in the past year. Among the areas to record double digit rises are East Renfrewshire (12.4 per cent), East Lothian (10.6 per cent), the Scottish Borders (11.3 per cent) and Inverclyde (11.8 per cent), while the biggest increase in the last 12 months was recorded in the Shetland Isles (31.1 per cent).

Prices went up by 3.8 per cent in Edinburgh and 0.6 per cent in Glasgow.

Dr John Boyle, director of research at estate agent Rettie & Co, said that the growth remained below the peak seen in 2007, while a drop in the number of transactions meant there was little danger of a housing bubble developing. He said: "What this report shows is that the rate of growth is beginning to slow, and the drop in transactions is something that we have been picking up.

"We think the Mortgage Market Review is slowing the rate of transactions because it now takes longer to get a mortgage. Speculation over the independence referendum is not affecting the market of properties valued below £750,000, but above and into the £1 million bracket it is beginning to have an effect.

"These properties are generally bought by investors from outside the country and there are concerns over what currency will be in use in two years' time. We were out in the Far East trying to sell the Scottish property market to investors in Hong Kong and this was raised."

Dr Peter Williams, housing market specialist and Chairman of Acadata, said: "This is the ninth successive month that house prices have risen in Scotland, and is the longest run of positive monthly gains since April 2007to December 2007, the time when prices were climbing towards the last housing peak, in May 2008.

"Placing Scotland's 4.3 per cent annual increase in house prices in a UK context, the rate is higher than the rises seen in the North West [4.1%], Yorkshire and Humberside [3.7 per cent] and Wales [3.6 per cent]."