House prices will fall in Scotland amid a slowdown in economic growth but a recession will be avoided, according to new figures.

The forecast in the latest PricewaterhouseCoopers UK economic outlook report comes despite new figures showing the average price of a house in Scotland has risen by 4% in the past year.

It says Scottish GDP growth will slow to about 1.3% in 2016 and 0.3% in 2017, in both years 0.3% lower than the expected UK-wide downturn.

A decline in business investment, particularly from overseas in areas such as commercial property, is blamed for the predicted slowdown, which the report warns could hit construction firms and capital goods manufacturers.

Consumer spending growth is expected to slow to about 1.3% by 2017 due to a weaker pound pushing up import prices and squeezing household spending.

The weaker pound is forecast to boost exports by 2017, however, moving from slowing GDP to helping accelerate growth.

The report predicts the price of an average home in Scotland will fall £3000 to hit £134,000 in 2017, bucking the UK national trend of rising property prices.

From 2018 onwards, property prices are projected to recover, rising to an average £156,000 by 2020.

The savings period first-time buyers face for a house deposit has dropped by two years from previous forecasts to 19 years, for those relying solely on their own savings with no family assistance.

This savings period has trebled since 2000, when it took first-time buyers six years to save for a deposit. In 1990 it took just two years.

PwC estimates someone buying their first home in 2016 could afford to step up to a larger property after around four years - less than a quarter of the time it could take to save for an initial deposit as a renter - due to capital gains made on their existing home and continued relatively low mortgage rates.

PwC Scotland chairman Lindsay Gardiner said: "Given what we are seeing here and in the recent Fraser of Allander report, Scotland is skirting very close to recession and while it is going to be a challenging few months, the country should avoid it.

"But, as with the recent Fraser of Allander report, our research is showing that it is the services sector driving growth as manufacturing and construction have peaked for the moment.

"As the UK now has a new cabinet and PM, who has stated she will proceed with Brexit, there is less uncertainty now than there has been for a few weeks and that is a good thing.

"But there is still much uncertainty ahead as we now enter the areas of working out the best deal for the UK with Europe and what potential spin-offs that may mean for Scotland.

"While our modelling sees the UK avoid recession, it would be prudent of businesses to make plans for recession scenarios, where they can."

While experts insist the housing market remains at risk of downturn, new figures show the average price of a house in Scotland rose by 4% in the past year.

Official statistics from the Registers of Scotland (RoS) reveal the average price of a property was £141,142 in May, up from £135,678 in the same month last year and an increase of 2.8% when compared to April.

The Scottish figure compares to a UK-wide average of £211,230, a rise of 8.1%.

Average year-on-year house prices in May fell most in Aberdeen and Aberdeenshire, with falls of 9.2% (to £176,394) and 5% (to £191,476) respectively.

One of the biggest increases was in East Renfrewshire, where the average price rose by 7% to £201,282.

The average price paid by first-time buyers in May was £115,428, an increase of 4% on the previous year, while new-build prices were up 12.25% to £200,554.

The latest figures available for the volume of residential sales in Scotland show there was a 45.4% rise year-on-year, to 11,017, in March.

RoS said a new levy for second homes and buy-to-let properties under the Land and Buildings Transaction Tax, which came into effect on April 1, was likely to have contributed to the increase.

Chief UK and European economist at IHS Global Insight Howard Archer said the new UK house price data was recorded "pre-Brexit vote", and said the EU referendum result put the housing market at a "very serious risk of an extended, marked downturn".