PROPERTY experts say the housing market in Scotland is improving, with the gap between what sellers want and what they actually receive from a buyer narrowing "significantly".

Research by s1homes.com found the so-called "reality gap" fell by seven percentage points during the last three months, driven by an increase in what buyers are prepared to pay.

Between July and September, the reality gap narrowed from 9% to 2%, and properties were selling for around £4000 less than their asking price, compared to a difference of £14,500 in the previous quarter.

The effect has been recorded across most types of property, with flats, terraced houses and semi-detached homes all selling above their asking prices.

However, the report, which compares average asking prices with the settlement prices, says that detached houses continue to be priced "unrealistically" and on average sell for around £40,000 less than their asking price.

Semi-detached homes are changing hands for significantly more than the asking price, with the average seller receiving offers of £6000 more than the advertised price.

Ewan Stark, Commercial Director of s1homes, said: "This quarter's report shows that there have been significant changes taking place in the property market.

"Buyers are now prepared to pay more than they have been for quite some time and that, coupled with a slight decline in average asking prices, is what has led to the upsurge in the volume of properties being sold.

"That's positive if you're looking to sell a property but the sharply rising prices at the lower end of the market aren't good news for first-time buyers."

The reality gap fluctuates across Scotland, with the biggest gap found in Argyll & Bute, where the average property is selling for 21% (£38,000) below its asking price. Edinburgh is the only market where the average property sells above the asking price, with sellers getting 4.5% (£9500) more.

The reality gap in Glasgow/Dunbartonshire has narrowed from 11% (£16,000) in the last quarter to 7% (£10,000) in the last three months. Katrina Maxwell, managing director of K Property, said: "The latest s1homes house price report mirrors my experience of the housing market in recent months. The market has definitely improved, it is more stable, and we are seeing much greater demand for homes.

"At the lower end of the market, in particular, K Property was seeing most properties achieving their valuation price while demand was high.

"The turnover of property at the higher end of the market is slower and properties are still selling for less than their valuation price, although selling prices are definitely increasing. With sales volumes increasing we anticipate an exciting 2014," said Ms Maxwell.

Meanwhile, business and financial advisers Grant Thornton UK LLP concluded that Scotland's market was "cautiously optimistic" but a boom is unlikely.

Schemes such as the government-backed Help to Buy were also welcomed by the firm for providing a shot in the arm to the sector.

But it concluded that a number of challenges lie ahead, which could "seriously jeopardise" long-term sustainable growth, with high land costs and rising business rates making some commercial developments unviable.

The firm's head of property and construction in Scotland, Lorraine Macphail, said: "While there are signs of more realistic and sustainable growth levels on the horizon, it's clear that some significant challenges remain.