House prices rose for a second consecutive month in April, official figures published yesterday showed, providing another fillip for the housing market.

The average property changed hands for £189,215 in April, up by 1.1 per cent from £187,193 in March, figures from the Department of Communities and Local Government indicate.

The encouraging signs from the housing market, where estate agents are reporting record numbers of buyer inquiries, has prompted some economists to revise their forecasts for house prices.

Capital Economics, which has one of the gloomiest outlooks for house prices, now predicts that prices will fall by 10 per cent this year, rather than by its initial estimate of 20 per cent. It also expects price falls next year to moderate from 10 per cent to between 5 per cent and 7 per cent.

This came as homeowners keen to boost the value of their property were advised to expand into their attic. A loft conversion increases the value of the average home by £26,000, according to a report by Nationwide Building Society.

The lender found that transforming 28 sq m of attic space into an extra bedroom or bathroom, or both, is at the top of the list of improvements that will enhance property prices, typically adding 20 per cent to a home with three bedrooms and one bathroom.

An extension that adds an extra bedroom is the next most lucrative project, adding 11 per cent, followed by central heating, 10 per cent, and extra floor space, 5 per cent.

The research did not take into account other popular features added to lift prices, such as a conservatory or double glazing.

The report is the first of its kind to appear since house prices began to fall — the last time that Nationwide compiled the figures was in May 2006 — and comes as monthly house price figures from the Department for Communities and Local Government showed a monthly rise of 1.1 per cent in April.

During the downturn there has been a trend towards improving rather than moving. However, this was viewed as a way for homeowners to improve their own living standards, rather than as an attempt to boost the value of their home.

Nationwide said that it had published the study to illustrate that the housing market was now a buyer’s market. The number of new buyer inquiries increased for the seventh month in a row in May, according to the Royal Institution of Chartered Surveyors.