Here, we're offered a window on a day in the lives of the residents of Turnpike House, a London high-rise. It's a world with many a trifling grievance to trouble the assortment of quirky characters who live in, interact with and move around it. Yet they're a stoical bunch, intent on grabbing life's good moments and living them.

From the eye-opening moments of Sun In My Morning, replete with Beach Boys vocal harmonies and flute, we are drawn steadily into a world of the everyday, but one to which splashes of colour are added by the people who exist within it.

Milk Bottle Symphony takes us on a milk round of the inhabitants' first actions of the day - boiling kettles, writing memoirs, making shopping lists, jumping onto buses - and infuses such snapshots of city life with something like vitality.

But in Turnpike House, not all is sweetness and light. In Lightning Strikes Twice, "Everyone has to have a reason to believe, So I still believe that lightning can strike twice for me," our star sign reading, lovelorn narrator relates. She's into superstition and destiny, and muses on making magic potions to win her lover. She's just a little scary. You wouldn't want her to make a doll in your likeness.

Elsewhere, the local franchised watering hole is The Hat and Fan, the ostensibly soulless backdrop to events in Last Orders For Gary Stead, while "a small cafe across the street" is a place for playing out an illicit affair in the toe-tapping Good Thing.

The notion of what is home is challenged in the melancholia-laden Slow Down At The Castle: "She knows it's not a castle, but that's what they've always said." How far removed an N1 tower block is from romantic notions of home as castle is laid bare.

Tales From Turnpike House is more than snapshot observation, however. It is a record recounting sociological change. In the exceptional and poignant Teenage Winter, one character "goes to the bakers to buy a loaf, aaaah, but she keeps forgetting it's changed into the Tropicana tanning salon". eBay gets a mention too - and the blame for the declining quality of the local charity shop's stock that includes "Noel's Blobbyland Deluxe Edition" and "two copies of Every Loser Wins".

One of the record's most memorable moments is a domestic slanging match. Relocate, starring David Essex, is the tale of a couple torn between city and rural living. In a Good Life for the Noughties, Sarah Cracknell is the idealistic Felicity Kendall who wants to "grow some vegetables". Essex is the everyman cityphile whose main argument against moving is "I'll miss my mates."

The escapism afforded by a roof garden pivots Stars Above Us, as the characters climb up the stairway to have some fun. Like much of this record, it's oddly touching: "Stars above us, cars below us, out on the rooftop baby, nothing can touch us baby." Further on, the instrumental The Birdman of EC1 reminds us of the band's long-held cinematic interests.

Aside from the many lyrical talking points, the album's music isn't shaded. It evokes a Cote d'Azur landscape of turquoise and azure, of chi-chi parties and whitewashed walls, married to those Beach Boys vocal harmonies from half a world away. It plays like music for a Londoner's romantic dreamscape.

The package as a whole offers a determined, optimistic view on life where it would be easy to see only negativity. It is never patronising to the proletarian figures on whom it muses. Lyrically, Cracknell is on the best form of her career, and her cut-glass vocals recall Black Box Recorder's Sarah Nixey. Indeed, the English social commentary present here is common to both acts, but Saint Etienne's varied musical textures and incisive character constructs give Turnpike House the edge.

This is gorgeous record that starts great and gets better with each additional hearing. Taking Saint Etienne to another level, Tales From Turnpike House is music to herald summer, but with universally human themes for any season.

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Mercury Prize 2009 nominees