Avid readers will recall that in July 2007 we wrote that cheap credit had driven house prices up to the levels seen that year. We pondered what would happen if it dried up. The rest of course is history. But what about the future? A recent Bank of England Credit Conditions Survey suggests that Mortgage Lenders believe access to credit will become easier over the coming months. Lenders report an increased appetite for risk including higher loan to value ratios (which means smaller deposits) and less stringent credit scoring. There may even be signs of life in the market for residential mortgage-backed securities. All this could mean that a floor will be put under house prices and that this year will see the stabilisation in price we talked about in our last piece. However, significant price increases seem unlikely given the general economic recession and the growing threat to jobs. Expect a return to more normal transaction levels late this year and early next albeit at more realistic prices.