No one is calling the bottom just yet but there were some encouraging signs yesterday that the housing market may be heading for a softer landing than previously thought.

Mortgage approvals for house purchases surged in April, while estate agents reported that the “siege mentality” in the market had lifted. The number of new-buyer inquiries rose at its fastest rate in a decade last month and a leading agent welcomed the return of buyers choosing to look for new properties because they want a change of location, rather than because they have no option but to move.

These healthy signs come hot on the heels of Halifax’s survey, published last week, which showed that property prices jumped 2.6 per cent in May. City economists have reacted to this flurry of good news by taking red pens to their housing forecasts.

Capital Economics thinks prices will fall 10 per cent this year, rather than by its initial estimate of 20 per cent. It expects price falls next year to moderate from 10 per cent to 5 to 7 per cent. Daiwa Securities sees an 11 per cent fall this year, against its forecast of 14 per cent, with prices flattening next year rather than falling another 4 per cent.

IHS Global Insight, another City economist, said its forecast for a 10 per cent drop in prices this year could be “too pessimistic”. George Buckley, an economist with Deutsche Bank, added: “We see a 33 per cent drop peak to trough, but we could see much weaker declines if the economic data continues to surprise to the upside.”

But while some economists say the pain for homeowners will be largely over by next spring, at which time prices will be steady or even starting to rise, others remain downbeat.

Seema Shah, a property economist with Capital Economics, said: “Our forecast is still a 40 per cent drop from peak to trough, but the difference is we expect it to be drawn out. We previously expected prices to trough in late 2010; we now expect it to be later.”

But despite forecasts of prices continuing to fall this year, home sellers are seeing more interest in their properties, which will help to prop up asking prices. The Council of Mortgage Lenders (CML) said the number of home loans approved for first-time buyers jumped by 13 per cent in May. However, Bob Pannell, the CML’s head of research, cautioned: “We need to see considerably higher transaction levels to underpin house prices.”

Housing market activity may be recovering, but it is doing so from historically low levels. The 35,600 home loans granted for purchases in April was a much lower figure than the average 88,000 granted during April in the past seven years.

Meanwhile, fear of unemployment was highlighted as research showed that one in four expects to have problems meeting housing costs in the next 12 months. About eight million people are thought to have shelved plans to buy a home or move into new rental accommodation in the past year because of the recession and credit crunch, the Chartered Institute of Housing said.

In a further blow to mortgage borrowers, the CML data indicated that lenders were still applying tougher criteria. The average loan-to-value in April was 67 per cent and lenders were prepared to advance an average of only 2.63 times a borrower’s income. There are fears that the resurgence in the market could be dampened as lenders move to raise rates. Nationwide will today increase the rates on its fixed deals by up to 0.86 percentage points after after a rise in swap rates, which determine fixed-rate pricing.