Banks may still be taking steps to insulate themselves from falling house prices, but there are some glimmers of hope in the property market, writes Sharlene Goff.

Estate agents’ reports of increased buyer interest were backed up this week by figures showing a sharp jump in mortgage approvals in February.

Data from the Bank of England showed that the number of agreed home loans had jumped by 20 per cent to the highest level since May last year.

Meanwhile, Nationwide said house prices had increased 0.9 per cent in March and, while Halifax reported a price fall for the same month, its data showed the pace of the decline had eased in the first quarter of this year.

Estate agents said the rise in mortgage approvals suggested buyers were taking advantage of falling property prices and low mortgage rates. Mortgage brokers believed the figures reflected greater willingness from buyers to enter the housing market rather than a relaxing of lending criteria by banks. They said that mortgage approvals were still far below their peak – the number of agreed loans in February was 44 per cent lower than a year earlier.

Economists warned that any improvement in the housing market was likely to take time. “While housing market activity has probably passed its low point . . .  the improvement will be gradual and fitful for some time and any substantial upturn remains well into the future,” said Howard Archer at Global Insight.