In July 2007 we mentioned the possibility of a credit crunch and the impact that one would have on house prices. We went on to say “it is the availability of cheap credit that has been driving the housing market and if the plug is pulled then we are in for a bumpy ride.” 18 months down the line the “bumpy” scenario now seems a bit optimistic. But could things get even more difficult in 2009? According to the Bank of England a total of about $200 billion of European corporate debt matured in 2008 and required re-financing. In 2009 the figure will be about $800 billion and most of that in the financial sector. In the past many big corporations found it easy to raise cash through the bond markets and didn’t have to go cap in hand to their bank manager. Not so now. In short, this year the demand for credit is set to leap whereas the availability is still constrained. The crunch is set to get crunchier. The debt figures don’t start getting back to 2008 levels until 2013. This points to mortgage lending remaining constrained and the cost of funds being relatively high. Which means when it comes to housing it’s likely to be a buyers market for some considerable time yet.