All the gauges appear to be reading "set fair" in the housing market, so why the long faces among those in the know?

The latest housing market survey on the face of it provides every reason to suspect that better times lie ahead. This follows a raft of housing indexes showing house prices rising steadily for several months.

The RICS survey has for three months now seen more surveyors reporting rising prices than reporting prices falling and the majority has grown.

The survey shows that as well as rising prices there are increasing numbers of new instructions, sales are increasing, new buyer inquiries are rising and surveyors are increasingly confident of that prices will continue to increase.

But why, with everything appearing so rosy, is there so much concern among the experts that I talk to about the fragility of the market?

I recently had a quick off-the-record chat with a former CEO of a major housebuilder. He has no particular axe to grind and he could not have been plainer. To him a 'double-dip' seemed inevitable.

And the industry analysts I talk to appear increasingly despairing of the market, not just on the house sales side, but also on the construction side.

The majors are geared up for a very cautious return to increasing volumes. Meanwhile the social sector is increasingly dependent on the Homes and Communities Agency to fill a huge funding gap left by the retreating private sector.

What realistic prospect is there that these two struggling sectors will provide anything like the number of homes they were just a couple of years ago, let alone hit anything like the suggested numbers required to meet housing need in the UK?

The answer I get is there is little.

The consensus seems to be that, yes, house building will be a growth sector, but from a low base and, without a radical shift in fortune or policy, the pace of growth will be leave production at levels far below par for many years hence.

But if prices fall again this will create further caution among both house builders and the social sector, which is looking to how it will manage to maintain reasonable levels of production when and if public sector money dries up after the election.

This rather begs the question of whether house prices will fall or not and there is growing concern that there will be a new collapse come next year.

The underlying worry is that the rally in prices has been based on a very narrow part of the market and heavily dependent on cash buyers and the wealthier segment of society which require low loan to value mortgages. The rise too has been fairly narrow geographically.

This means that while there may have been price rises they are based largely on activity in a small section of the overall market, so should be treated with extreme caution.

These points were made by Richard Donnell in his comments to the latest survey.

He noted: "What is becoming increasingly clear from recent Hometrack surveys is a marked slowdown in the rate of growth in the volume of new buyers registering with agents. This suggests that the pent up demand that has boosted the market in recent months is starting to fade in the face of firmer pricing and fewer clear bargains."

And he added: "Prices over October may have risen, but these rises were registered across just 16% of the market. Across the remaining 84% of the country, prices remained static."

Also with more stock appearing on the market we are seeing the RICS sales-to-stock ratio - regarded as a fairly good indicator of a shift in market sentiment and a herald of price changes in about six months time - appearing to be stalling.

So, despite the prima facie evidence pointing to an improving market, there are some warning signs of a possible relapse.

The next few months are likely to be among the more fascinating as we wait to see if the market does double dip.

And as far as I can see, the smart money seems to suggest it will.

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