City money seems to be pointing to a near double-digit drop in house prices, with derivatives traders buying and selling on the basis of a 4.2% fall in house prices over the full course of this year with a further fall of 5.9% next year.

The figures from Future HPI, the former Tradition Future HPI now published by Peter Sceats and Associates, evaluates derivatives deals made by institutions and other trading parties based on expected movements in the Halifax non-seasonally adjusted monthly house price index.

The deals are undertaken by speculators or firms looking to hedge their exposure to housing market risk. They involve buying or selling against the house prices at a given date in the future.

Crudely put, if you buy at a future price below or sell at a future price above what the Halifax index evenutally comes in at you are quids in and pocket the difference. If the movement is the other way you have to pay out the difference.

As things stand today, the data collected for this future house price index suggests that deals are being made for house prices at £160,317 at the end of this year against the October Halifax avearge house price of £165,275.

Meanwhile, the index shows the price at the end of 2011 at £150,813 and at the end of 2014 at £155,359. That suggests a pretty sickly market.

But as Peter Sceats points out there is a tendency for the direction of future trades in the relatively immature residential property derivatives market to overstate future swings.

Whether this proves the case or not, it does seem that those betting on house prices do see a fall coming