Economists have spoken cautiously about the latest news on mortgage approvals. The news of March seeing a new eight month high for approvals is important, but not significant to a recovery in the housing market, according to market insiders.

The total number of new mortgage approvals reached 31,660 in March, according to the British Bankers’ Association. This is a modest increase over the February figure of 30,178, and according to Howard Archer, chief economist at IHS Global Insight, is no reason to expect bigger things to happen right now in the market. He pointed out approvals were still down almost 10% year on year, and that the March figure is still considerably off the mark of more than 57,000 which is the typical monthly average since the late 90's.

His remarks regarding the March figure reflect his beliefs about the overall market. He said: "If someone had said in the past that mortgage approvals were around the 31,000 level, we would have said 'God, that's awful'. It's a level that we have associated with falling house prices."

The chief executive of Marsh and Parsons, Peter Rollings, commented on the latest approval figure, saying: "March's figures were a step in the right direction, but mortgage lending is still a long way from where it needs to be. No one wants to see a return of the irresponsible lending practices seen pre-crunch, but lenders must do more to help those looking to purchase their first home.

"The average £25,000 deposit required is prohibitive for thousands of would-be buyers across the UK – and is an even more acute problem for London's first-timers, where the standard deposit needed is double the national average. Such large requirements are impeding a concerted recovery in the nationwide housing market.

"Nevertheless, despite the ongoing squeeze on lending, the market in London remains robust – and demand from buyers is stronger than ever. Over 13 buyers are registering for every property placed on the market in central London, with both international and domestic cash buyers particularly active. However, we won't see anywhere like this level of demand and activity in other parts of the UK until frustrated first-time buyers can access the level of funding they require."