The Bank of England kept interest rates on hold again this month (at 0.50%) and extended its asset purchase programme to support the economy from £75bn to £125bn.

Hopefully some of the increase in the supply of money will find its way to mortgages. There is some evidence of this as inter-bank lending has showed signs of improvement. The spread between the base rate and three-month Libor, on which most mortgages are based, has fallen considerably, to the lowest level since September 2008.

Mortgage approvals have also increased consistently since the start of the year to reach 39,000 in March from 38,000 in February and 32,000 in January. The figures suggest that falling house prices and low interest rates may be encouraging some buyers back into the market.

Although there are some signs of stabilisation, the overall tone of the market is still negative. Unemployment continues to increase, with some analysts predicting that it will rise above 3 million by the end of next year. This will hit potential buyers who may be reluctant to commit to new purchases.

James Thomas is head of residential development and investment at Jones Lang LaSalle