Spring sunshine, easy money and the lure of a “bargain” can be a dangerously seductive mix for aspiring homebuyers. Servicing an interest-only mortgage for three and a half times salary, at current rates of about 4 per cent, eats up just 14 per cent of household income compared with a long-term average of about 25 per cent. For those who believe the market may be close to bottoming out, this is enticing stuff. Buyer inquiries at estate agents are surging.

The trouble, as Capital Economics notes, is that the normally tight relationship between inquiries and new mortgage approvals has broken down over the past year, reflecting the entrenched stand-off between more risk-averse buyers and sellers holding out valiantly for 2007 valuations. Even after March’s 4 per cent rise, monthly mortgage approvals for new house purchase are still running at less than half the level traditionally deemed consistent with stable house prices.