What on earth do these have to do with the Housing Market you may ask? At first sight not a lot. However, access to cheap credit has been the main driver for the housing market over the past few years. In recent weeks we have looked at the possible effect of an increased supply of property coming to the market combined with higher interest rates. We concluded this would most likely result in a significant cooling. Indeed there are signs of this happening already. But what happens if Lenders become more risk averse? CDOs package portfolios of debt such as mortgages into high yielding bonds. Very attractive to Financial Institutions because the returns can be very high. The problem is that many CDOs are reliant on sub-prime lending which has a higher risk of default. With the virtual collapse of two major US hedge funds reliant upon CDOs for finance the markets are suddenly becoming more Risk Averse. The market for credit is truly global and so you can expect UK Mortgage Lenders to start becoming more risk averse. The sub-prime sector will most likely come under the spotlight first. If Lenders become more choosy about who they lend to and on what terms then this can only act as a further brake on the market. Could the combined effect of all these factors see it go into reverse? More than ever its important for Sellers and their Agents to be quick on their feet, anticipate market changes where possible and adapt their marketing strategies to suit.