An increase in the number of mortgage approvals marks a slight improvement in confidence returning to the market, it has been claimed.

Peter Cowell, broker at Click n go Mortgages, said recovery is likely to come at a slow and steady pace, with the latest figures just the first signs of an upturn in the economy.

Mr Cowell continued: "[Lenders] are looking for a hint of an increase in the confidence factor of house prices.

"They are looking for a more stable marketplace and they are probably looking for their arrears book to reduce as well."

He added that mortgage arrears also needed to be sorted out before confidence will start to return to the market and remortgage rates should likewise see some improvement.

The British Bankers’ Association reported on June 23rd 2009, that 31,162 mortgages were approved in May – an increase of 7.4 per cent compared to April.

It revealed that the figure was up by 15.8 per cent compared to May 2008 and the average value of an approved mortgage stood at £133,600.