Viewing a single comment thread. View all comments

hmiamid OP t1_irihdpf wrote

Reply to comment by julietOscarEch0 in [OC] House price you can afford by paying 1000/month for 30 years vs. interest rate by hmiamid

  1. you don't really expect the market to crash the day after the interest rates rise. Its a slow progress.
  2. how do you think UK banks calculate people's affordability then?
1

julietOscarEch0 t1_iril2ei wrote

UK bank affordability test already bake in a component of resilience to rate rises and the binding constraint for most people is an income multiple limit or raising a deposit. As such affordability has a lower dependence on rates than you might expect(and certainly nothing like your model). Probably the biggest impact so far is banks starting to withdraw 95% LTV deals.

So when do you expect the 30% drop in prices? I assume you have sold all property and found a way to short real estate since you seem to think the outcome is so certain?

−1