House prices will be lower than today at least until the end of 2014. That is the balance of the views of City folk who trade in residential derivatives.

The index Future HPI, put together by Peter Sceats & Associates, provides an index of residential derivatives trades and it puts the average price of a house in December 2014 measured against the Halifax index at £157,224.

That is about £6,000 less than the average non-seasonally adjusted price measured by Halifax in November.

The graph shows the view traders have of the future path of house prices in the UK.

The derivatives market now expects the bottom in prices to be below £150,000, in 2011 which suggests sentiment has become gloomier over the past month.

If prices were to drop that far it would put them more than 25% down in cash terms on the peak in August 2007 and by about a third in real terms if you take account of inflation.