Hopes of a revival for Britain's battered housing market were raised today by data showing an 8 per cent rise in the number of mortgages approved for house purchases in April.

The Bank of England said that 43,201 mortgages were approved in April, up from 40,038 in March.

The figure was better than analysts' forecast of 41,000 and marked the third consecutive monthly rise.

Although the number of mortgage approvals was still down by 21.9 per cent year-on-year, from 55,280 in April 2008, the Bank of England figures are the latest in a spate of more upbeat data about the housing market, bolstering hopes that activity is picking up.

Separate data today showed that the decline in the construction sector eased in May to its slowest level in more than a year.

The influential purchasing managers index (PMI) rose to 45.9 in May, from 38.1 in April and a record low of 27.8 in February.

The index is heading towards the critical 50.0 dividing line between contraction and growth.

This week data from the Land Registry showed that property values edged down by only 0.3 per cent in April, the smallest monthly drop in nearly a year.

A separate survey from Hometrack, the property intelligence group, recorded that house prices remained unchanged in May, the first time in 20 months that the survey has not recorded price falls.

Howard Archer, chief UK and European economist at IHS Insight, said: "The further rise in mortgage approvals ... ties in with widespread evidence that housing market activity is trending up modestly as it is supported by sharply reduced mortgage interest rates and the substantial fall in house prices from their 2007 peak levels."

However, he said that mortgage activity is "still down at a level that is consistent with falling house prices" and that a pick-up in actual house purchases is "likely to be gradual and fitful for some time to come".

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