The average house price in Scotland rose 2.2% in the final quarter last year and 17.1% over the whole of 2003, according to the Bank of Scotland Quarterly Scottish Housing Price Index.

The average home north of the border now costs £84,086, compared with £139,716 for the UK as a whole.

Towns such as Dumbarton (50%), Helensburgh (49%) and Cupar in Fife (48%) recorded the largest increases of all, but for Scotland as a whole average prices have increased by nearly 40% over the past three years indicating the strength of the market.

House prices remain highest in Edinburgh with the average property selling for £164,891.

Shane O’Riordain, General Manager for Group Economics at the BOS said: ‘The Scottish Housing Market continues to benefit from the contiuing growth of the Scottish economy and house prices continue to out-pace the rest of the UK.’

For the coming year, Mr O’Riordain commented: ‘Increasing employment in Scotland should keep the housing market active. Recruitment consultancies have reported a rise in staff appointments in Scotland’s four largest cities in November. Strong demand for staff, coupled with rising skills shortages have exerted strong upward pressure on wages and salaries.’