The latest figures reveal a monthly rise in mortgage approvals, prompting further hopes of increasing activity in the residential property market.

Mortgage approvals bounced back in March from February's five-month low, the new Bank of England data reveals.

A total of 53,504 mortgages worth £8 billion were approved in March as the figure moved back up in the right direction following the February total of 51,947.

The rise could be sustained in the coming months, some analysts believe, as the effects of Government initiatives designed to open the flow of credit kick in.

However, experts have acknowledged that mortgage approvals remain historically low as the economy continues to face myriad challenges.

Howard Archer, chief European and UK economist for IHS Global Insight, said the average number of approvals over the last 20 years has been more than 85,000 a month.

Samuel Tombs, an economist at Capital Economics, said that although loans for the residential property market may be picking up, there is little sign of a significant resurgence in lending across the economy generally.

But on a more positive note he said the full impact of the Funding for Lending scheme (FLS) may not yet have been seen while the Government's Help to Buy initiative may also help to boost mortgage lending.

Hometrack this week released an encouraging dataset for the London residential property market showing that activity in the capital has reached its highest level since 2007.

There are also hopes that an increasing number of people around the country are embarking on a property search as spring arrives, with homes now taking a week less to sell on average than at the start of the year.

A considerably wider range of mortgages has now arrived on the market and lenders have been reducing their rates since the FLS was launched last year.

Lenders have been innovating with deals that require smaller deposits for customers at the lower end of the market in a bid to attract first-time buyers, which in turn could help to unlock chains higher up the ladder.

The new figures from the Bank of England tie in with a recent release by the British Bankers' Association predicting an increase in first-time buyers that will further improve conditions.