It has been a good spring so far for house builders in terms of sentiment if not in terms of actual sales. This is in sharp contrast to last year when market devastation created more ashen-faced residential developers than you could shake a stick at.

There has been a bit of a flutter of excitement in the stock market with most quote house builders seeing a lift in recent months and those perceived as most vulnerable enjoying a marked uplift in recent days.

There has been a raft of data interpreted as evidence of green shoots, from an increase in mortgage approvals to more people walking through the doors of estate agents.

And I am told that bargain hunters at the auctions markets are finding competition significantly tougher as small scale property developers are returning in numbers to the market.

But all this doesn’t mean an improvement on the ground as far as building is concerned. Indeed to the latest survey of Home Builders Federation members published in Housing Market Report show that firms still expect sales to be down this year on last.

But sentiment isn’t necessarily about the present. It tends to be influenced by expectations of the future.

And the future of house prices is beginning to look a little less gloomy to those who trade in it.

The latest derivatives index figures from Tradition rose despite the drop on the Halifax house price non-seasonally adjusted index, which is used as the benchmark. This indicates a shift in sentiment.

But before getting over excited, that hardnosed crew of money men and women don’t expect prices to rise by any means.

They are still trading on the basis of a 20% fall over the next three years.

Here’s how Peter Sceats, Director of the Real Estate division of Tradition Group, sees it:
“Our indices still show future house price values below the current index level for a decade to come and with rising unemployment and poor mortgage availability, it is still too soon to call the bottom of the physical housing market.

“But look…future house price expectations HAVE risen and maybe more importantly sentiment HAS moved. The City may be sending a signal that the over-pessimistic phase of the cycle has passed.”

I for one will be watching the index over the next few months. My guess is that it may be a bit more skittish than in has been as the pessimists and optimists react in more equal measure to changing market data.