Are earnings too low / living costs getting too high??

Meatball · 26 Mar 2017 at 20:47

The Craig said:
Have you considered moving out of London? (or are your jobs/industries key to London).

I'd hate the thought of spending 300+k for a 1 bed flat in zone 3 (someone told me that's how much it is :X)

It's on the cards however my area of work is very specialised and is only really available in London. I'm considering taking a slight de-tour with my career so we can move somewhere cheaper but I haven't worked out the finances yet as I'll likely take a significant pay cut.

We currently live in Zone 3 boarding on 2 and the 300k is about right! Our rent is £1500 a month for a two bedroom duplex flat. It's a bit soul destroying throwing that money away every month but it's the reality of living in London.

Lord-Jaffa · 26 Mar 2017 at 20:48

45k this year, can't afford to buy where I live. Can't move due to family/children/school.

300K for a one bedroom flat, love it, surely has to crash sooner or later.

krooton · 26 Mar 2017 at 21:09

The Craig said:
Agreed, requires planning but also a fairly hefty wage (if you want a fairly decent quality of life). Which is unattainable for some sadly.

An impressive amount of saving! Where are you hoping to buy? I never really counted how much we were saving before I bought our place, but was a good % of our salaries!
We both drive poverty cars however

Have you considered moving out of London? (or are your jobs/industries key to London).

I'd hate the thought of spending 300+k for a 1 bed flat in zone 3 (someone told me that's how much it is :X)

They are hitting that price in Zone 4 now :/

dowie · 26 Mar 2017 at 21:15

Lord-Jaffa said:
300K for a one bedroom flat, love it, surely has to crash sooner or later.

it did crash in 2008

it is possible it could happen again - perhaps more likely than a crash would be a steady decline in prices

Tone1979 · 26 Mar 2017 at 21:20

I think what you earn is relative to what you want to achieve when it comes to personal goals.

myself and my partner earn £130k combined. If we were to buy a house in London we wouldn't be able to do the things we want to do. So we moved out of London and still work in London. It works for us.

we don't have kids yet but know that it will cost a fair bit. I think London is a horrible place to live these days as you're paying a fortune for everything. We want our money to travel and to build a future. I wish we were as good with the money as we should be but it's not too hard if I am honest. We are saving for our wedding which is basically taking up all our spare cash.

I work 35 hours a week and she works 40.

ci_newman · 26 Mar 2017 at 21:32

dowie said:
it did crash in 2008

it is possible it could happen again - perhaps more likely than a crash would be a steady decline in prices

The south east / London didn't suffer a crash though, they merely stagnated. That is where the biggest issues with house prices lay, and houses prices have shot up massively since the recovery too (my own home has gained 50% value in 4 years, I'm screwed if I ever want to buy somewhere bigger!)

Tone1979 said:
I think what you earn is relative to what you want to achieve when it comes to personal goals.

myself and my partner earn £130k combined. If we were to buy a house in London we wouldn't be able to do the things we want to do. So we moved out of London and still work in London. It works for us.

we don't have kids yet but know that it will cost a fair bit. I think London is a horrible place to live these days as you're paying a fortune for everything. We want our money to travel and to build a future. I wish we were as good with the money as we should be but it's not too hard if I am honest. We are saving for our wedding which is basically taking up all our spare cash.

I work 35 hours a week and she works 40.

Well done you, but your household income is 5x larger than the national average and that is just the average. Your situation is not representative of the wider public and the housing issue we have.

dowie · 26 Mar 2017 at 21:36

ci_newman said:
The south east / London didn't suffer a crash though, they merely stagnated.

not true:

Tone1979 · 26 Mar 2017 at 21:43

ci_newman said:
The south east / London didn't suffer a crash though, they merely stagnated. That is where the biggest issues with house prices lay, and houses prices have shot up massively since the recovery too (my own home has gained 50% value in 4 years, I'm screwed if I ever want to buy somewhere bigger!)

Well done you, but your household income is 5x larger than the national average and that is just the average. Your situation is not representative of the wider public and the housing issue we have.

I didn't post for a well done, if you would be happier if I remove my post I will.

If you live in London, which is what I can comment on, then it is a problem when you can't buy a house near where you live for less than the salary of a doctor. The issue is many properties in London are empty as they are bought as investments. This should not be allowed. In major cities, my feeling is that the housing should be used for those that run the city in terms of workforce. Nurses, doctors, fire, police etc..

Lord-Jaffa · 26 Mar 2017 at 21:48

Situation wouldnt be as bad if the rental market wasnt equally as price gouging as the house prices themselves. How can you have a system where the average price of a house is 10x the average wage. You have rental prices that are MORE than the minimum wage per month.

Substance · 27 Mar 2017 at 08:10

Living in the north has it's advantages.

I work as a data analyst and earn just a bit less than the national average, my wife isn't working at the moment, I have a 2 year old child, reasonable house, modern car, all the amenities including 200mb internet and still manage to eat out 2-3 times a month.

It can be a bit tight sometimes and large purchases need to be planned in advance but once my wife gets back to work (retail manager), we will be pretty comfortable.

Delvis · 27 Mar 2017 at 11:49

Our combined income is sub 35k atm, which sucks.

I think living has generally got more expensive, alongside things like fuel and insurance, food also it feels like (actual food, not crap)

Cant even fathom buying a place, have zero savings

413x · 27 Mar 2017 at 22:33

Substance said:
Living in the north has it's advantages.

I work as a data analyst and earn just a bit less than the national average, my wife isn't working at the moment, I have a 2 year old child, reasonable house, modern car, all the amenities including 200mb internet and still manage to eat out 2-3 times a month.

It can be a bit tight sometimes and large purchases need to be planned in advance but once my wife gets back to work (retail manager), we will be pretty comfortable.

I'm hoping my data analysis skills can keep me out of London on a wage around 30. It happily live in Cornwall or North West on that target than London on 45. It's a nice wage/responsibility mix outside of London. Especially when career isn't my life goal

Cracking down on 3rd home profits for buy to let would probably help. Make renting more homes less and less profitable with tax. Don't want a housing market crash, but stagnation would help

Zatoichi.uK · 28 Mar 2017 at 10:13

My parents have just put their house on the market which is around 20 miles north of London. 11 viewings on day 1 with the majority from London it seems. Offers on the table straight away for 10k over the asking price.

I can't see a crash until supply goes up.

Jez · 28 Mar 2017 at 10:55

Zatoichi.uK said:
My parents have just put their house on the market which is around 20 miles north of London. 11 viewings on day 1 with the majority from London it seems. Offers on the table straight away for 10k over the asking price.

I can't see a crash until supply goes up.

Same around here, i am trying to buy BTL stuff and every single house is swarmed with people paying over asking. I just secured a little flat which is proceeding, but that took paying in excess of asking, and it needs renovation on top.

Only flip side, is that the lack of supply also extends to the rental market where yields are staying relatively stable.

Altaz · 28 Mar 2017 at 11:23

There was a release on a new development in Zone 4 last Friday, people had been camping outside the sales office since Tuesday. This was for 1/2 bedroom flats £350K+, as long as the demand is there, a major crash is unlikely anytime soon.

adam cool dude · 28 Mar 2017 at 11:43

We are on about 50k a year combined. We only have our mortgage as debt and will be mortgage free by 40ish with monthly repayments a tiny £430 a month. The main difference is we live in the east midlands. Our 3 bedroom detached house with garage, good sized front and rear garden only cost us 150k in 2010. Even still its value has gone up 30k in 7 years. I also have a decent work pattern now coming off nights on the same pay but with more responsibility and only work 7 days out of 14. I would say life is better than ever at the moment.

dowie · 28 Mar 2017 at 11:55

Altaz said:
There was a release on a new development in Zone 4 last Friday, people had been camping outside the sales office since Tuesday. This was for 1/2 bedroom flats £350K+, as long as the demand is there, a major crash is unlikely anytime soon.

Out of interest where was that and do you have a link to the development?

Glaucus · 28 Mar 2017 at 11:58

Altaz said:
There was a release on a new development in Zone 4 last Friday, people had been camping outside the sales office since Tuesday. This was for 1/2 bedroom flats £350K+, as long as the demand is there, a major crash is unlikely anytime soon.

the other side is how long can the government keep propping it up. Mortgage multipliers are going to have to raise as are help to buy schemes. It can't carry on for ever. (unless you believe boom and bust cycles have ended)
however unless economy totally tanks due to brexit (which is on the cards) then government can and will do all they can to keep propping it up, until they run out of money. Even then a bust wont help most people out, due to job losses, inflation, how hard mortgages will be to secure as banks wont want to lend ect.

Altaz · 28 Mar 2017 at 12:23

dowie said:
Out of interest where was that and do you have a link to the development?

New North Square in Hainault, the end of the central line and a 2 minute walk to the station.
https://www.taylorwimpey.co.uk/find-your-home/england/essex/hainault/new-north-square

The release previous to this one, they allowed people to setup sleeping bags in the sales office the night before the release.

james.miller · 28 Mar 2017 at 12:44

Situation wouldnt be as bad if the rental market wasnt equally as price gouging as the house prices themselves. How can you have a system where the average price of a house is 10x the average wage. You have rental prices that are MORE than the minimum wage per month.

Yes. We arent with a private landlord thank christ but still our rent is more than the mortgage would be, providing we could cough up a chunk for the deposit. Which we can't. Our combined is £47k or so. we rent from our local HA with no hope of ever buying the house with it being at least 10 times the average wage. Living costs are too high to save for a deposit with the better half working part time (2 kids, one 6 month old). That wont change any time soon, and I will not entertain the idea of moving to a smaller place to save money because firstly I've done living in a 1 bed flat with a GF and 3 year old - it nearly tore us apart but also it's not actually that much cheaper. At all.