Renting in the Big Smoke

[amateur]

What price do people expect to pay per calendar month, for a decent gaff/room.

What would be your budget or cap?

In terms of salary would 50% going to rent be justifiable

I meant London by the way

 

[najaB]

In terms of salary would 50% going to rent be justifiable...

I don't know, but having 50% of your income going on rent is one definition of poverty.

 

[Bromley boy]

To some extent how long is a bit of string, and depends very much on location, but you'll be looking at £6-700 per month for a half decent room... Possibly even more.

Where I am (zone 2/3 boundary) a one bed flat would be around 1200-1500/month.

The below may be useful (albeit a couple of years out of date).

http://www.homesandproperty.co.uk/p...p-10-cheapest-areas-to-house-share-48386.html

 

[EM2]

I don't know, but having 50% of your income going on rent is one definition of poverty.

Really?!
Gross salary or net? Because my rent is close to 50% of my take-home salary, and I'd say I'm a long way from poverty.

 

[gswindale]

Really?!
Gross salary or net? Because my rent is close to 50% of my take-home salary, and I'd say I'm a long way from poverty.

It does depend a bit on your salary though!

If my wife & I were renting and paying 50% of our combined salaries as rent, then there would be no way that we could manage to save any money towards a house deposit or into any form of savings to assist with retirement etc.

Sent from my Nexus 7 using Tapatalk

 

[TheEdge]

To some extent how long is a bit of string, and depends very much on location, but you'll be looking at £6-700 per month for a half decent room... Possibly even more.

Where I am (zone 2/3 boundary) a one bed flat would be around 1200-1500/month.

*spits coffee on my PC*

I pay £675 pcm and live in a two bed cottage with a large garden.

Remind me why I'd want to live in London again?

 

[TheEdge]

Really?!
Gross salary or net? Because my rent is close to 50% of my take-home salary, and I'd say I'm a long way from poverty.

Depends on ones measure.

My rent, alone, is about 30% of monthly take home. Once I throw in all bills, including car payments, I'm probably looking at 60% of my take home gone. Which isn't really all that bad.

But then I live alone and feed myself and Aldi and don't go out every weekend.

 

[DarloRich]

What price do people expect to pay per calendar month, for a decent gaff/room.
I meant London by the way

Remove trousers. Bend over. Stiff upper lip old chap.

 

[najaB]

Really?!
Gross salary or net? Because my rent is close to 50% of my take-home salary, and I'd say I'm a long way from poverty.

What's included in that - is that just rent or rent, council tax, utilities?

 

[Bromley boy]

*spits coffee on my PC*

I pay £675 pcm and live in a two bed cottage with a large garden.

Remind me why I'd want to live in London again?

You probably wouldn't, and I wouldn't blame you. Wow that does put things into perspective. A 2 bed cottage v cramped room in a shared house for the same price.

The reality is London is fun in your twenties, but loses its sheen a little in your thirties when you've done it all before and start to think about grown up things like buying a house, having a family etc. Over the last few years property prices have gone absolutely stupid and are now unaffordable for many people, even those on healthy incomes.

I'm very lucky to have bought my place around 10 years ago - I couldn't afford to buy it now! It has a decent chunk of equity in it but the reality is it's fine for a singleton but not big enough to raise a family in. Hence I will look to cash it in and move further out in the future (maybe even back to Bromley ).

If I was starting again from scratch I'd probably give london a miss!

 

[Bromley boy]

I don't know, but having 50% of your income going on rent is one definition of poverty.

That sounds like a rather "first world" definition of poverty to me, where does it come from?

 

[Starmill]

There is a big difference between relative poverty and absolute poverty.

Absolute poverty is when it is difficult for you to subsist physically with the resources you have. You should have access to things like clean water and shelter but also enough to give you a minimum level of sustainable mental and physical health. This can't really be defined because it depends where you live. The World Bank defines "Extreme Poverty" as anyone living on less than $1.90 a day and this has increased over the years from $1.

This is not what NajaB was referring to.

Relative poverty is far more dynamic. It changes deepening on what you do or where you live, whereas generally having enough to eat does not. Generally it would be based on the median income of your country. In the UK, the "relative poverty line" is placed at 60% of median household disposable income, so if you have less than this you are likely to be in 'relative poverty'. If the rest of the country gets richer while your income stays the same, you are likely to be sliding towards relative poverty.

In the UK, median income for one adult in 2016 was £26,300, 60% of which is £15,600.

Now, there is no golden rule for how much of this you should be spending on housing and as others have explained there are a lot of other costs on tip of this like council tax, utility bills and the cost of food, and other things that you really can't live without. There was a sort of idea that the most you should spend is about 30% in order to be living sustainably and that might still be relevant in some cases but it's a bit outdated.

The ONS had this to say in 2015:

Under the comprehensive definition of housing expenditure, UK households spent on average £158.30 a week on housing in 2014, which equates to about a fifth (21%) of total weekly expenditure.

By contrast, the narrower COICOP definition of housing expenditure (with fuel and power removed) gave an average of £46.80 per week for each household (as shown in Table A1 (154.5 Kb Excel sheet) in appendix A).

People who rent, people who have a mortgage and people who already own their houses will all be affected differently.

UNESCO have the following to say:

Absolute poverty measures poverty in relation to the amount of money necessary to meet basic needs such as food, clothing, and shelter. The concept of absolute poverty is not concerned with broader quality of life issues or with the overall level of inequality in society. The concept therefore fails to recognise that individuals have important social and cultural needs. This, and similar criticisms, led to the development of the concept of relative poverty. Relative poverty defines poverty in relation to the economic status of other members of the society: people are poor if they fall below prevailing standards of living in a given societal context. An important criticism of both concepts is that they are largely concerned with income and consumption.

http://www.unesco.org/new/en/social...mes/international-migration/glossary/poverty/

There are a lot of things beyond money that might influence poverty. Chiefly these are longevity and education levels. The Multidimensional Poverty Index (MPI) attempts to composite some of these factors to produce more relevant results.

There is a lot more to this and some much cleverer people than me have written papers on it, but in general if you spend 50% of your net income on rent you are probably in a pretty bad situation because you will have very little money left indeed once you have taken everything else into account. There is some doubt as to what being in poverty even means, and if you are convinced that your lifestyle is sustainable for yourself then you're probably right.

Further reading in the English Housing Survey:

1.10 Households in London were fairly evenly distributed across the tenures, with
half in owner occupation and half in the rented sectors. Outside of London,
owner occupation was more prevalent than renting, Annex Table 1.2. The
lower rate of owner occupation in London (49%) compared to the rest of
England (65%) is most likely because of the younger age profile of the
population of London.

1.40 Social and private rents are higher in London than outside of London.
Moreover, the gap between social and private rents is greater in London than
it is in the rest of England, Figure 1.7

1.41 In 2015-16, the average private rent in London was £300 per week, about
twice the average rent outside London (£153 per week). Social renters in
London paid, on average, £129 per week compared with £95 per week
outside of London. Since 2008-09 both social and private rents have
increased in and out of London. While social rents increased between 2014-
15 and 2015-16, private rents did not.

https://www.gov.uk/government/uploa...a/file/595785/2015-16_EHS_Headline_Report.pdf

 

[Bromley boy]

There is a big difference between relative poverty and absolute poverty.

Absolute poverty is when it is difficult for you to subsist physically with the resources you have. You should have access to things like clean water and shelter but also enough to give you a minimum level of sustainable mental and physical health. This can't really be defined because it depends where you live. The World Bank defines "Extreme Poverty" as anyone living on less than $1.90 a day and this has increased over the years from $1.

This is not what NajaB was referring to.

Relative poverty is far more dynamic. It changes deepening on what you do or where you live, whereas generally having enough to eat does not. Generally it would be based on the median income of your country. In the UK, the "relative poverty line" is placed at 60% of median household disposable income, so if you have less than this you are likely to be in 'relative poverty'. If the rest of the country gets richer while your income stays the same, you are likely to be sliding towards relative poverty.

In the UK, median income for one adult in 2016 was £26,300, 60% of which is £15,600.

Now, there is no golden rule for how much of this you should be spending on housing and as others have explained there are a lot of other costs on tip of this like council tax, utility bills and the cost of food, and other things that you really can't live without. There was a sort of idea that the most you should spend is about 30% in order to be living sustainably and that might still be relevant in some cases but it's a bit outdated.

The ONS had this to say in 2015:



People who rent, people who have a mortgage and people who already own their houses will all be affected differently.

UNESCO have the following to say:



http://www.unesco.org/new/en/social...mes/international-migration/glossary/poverty/

There are a lot of things beyond money that might influence poverty. Chiefly these are longevity and education levels. The Multidimensional Poverty Index(MPI) attempts to composite some of these factors to produce more relevant results.

There is a lot more to this and some much cleverer people than me have written papers on it, but in general if you spend 50% of your net income on rent you are probably in a pretty bad situation because you will have very little money left indeed once you have taken everything else into account. There is some doubt as to what being in poverty even means, and if you are convinced that your lifestyle is sustainable for yourself then you're probably right.

That is very illuminating, thanks.

Personally I think "poverty" is an overused word in the UK, where most people probably understand it to mean "absolute poverty". In my opinion the concept of "relative poverty" is meaningless, has little application outside of UNESCO's rarefied strata of existence and frankly is quite insulting to those in absolute poverty - very few of whom exist in the UK (the homeless probably the only example I can think of).

We are all in "relative poverty" if we choose to conpare ourselves with the right set of people. Those of us in "relative poverty" will have options - move to a cheaper part of the country, downgrade to a flat share rather living alone etc.

If I make a bad financial decision, overstretch to a house I can't really afford, I might well be living in relative poverty but would most people consider that "poverty" was an appropriate description of my situation? I strongly suspect they would not (they'd naturally equate the meaning of poverty with absolute rather than relative poverty). Hence bandying "poverty" around in the context of a discussion about the cost of renting property in London is misleading, in my view.

 

[Bletchleyite]

I don't know, but having 50% of your income going on rent is one definition of poverty.

I don't think it's a sensible one. A more sensible one is whether the money you have left after paying for essentials is enough to allow a decent life.

 

[DarloRich]

*spits coffee on my PC*

I pay £675 pcm and live in a two bed cottage with a large garden.

Remind me why I'd want to live in London again?

When i lived in Darlington I paid £395 pcm for a two bed terrace in a decent enough part of town. It might have been £375 in a rougher part. You might now pay £450/475 pcm. A 3 bed semi is about £600 and was about £500 pcm when I lived there. Flats are about the same.

By comparison. in Milton Keynes:

• A room in a house share costs about £400 pcm
• A two bed flat is about £900 pcm
• A one bed flat is a bout £800
• A 2 bed terrace is about £900

My mortgage, and I am being screwed due to past unemployment/finance problems, is less than that. People on a decent rate must be paying about half that!

 

[Peter Mugridge]

My mortgage, and I am being screwed due to past unemployment/finance problems is less than that. People on a decent rate must be paying about half that!

Regardless of "rate trapping" in any given area renting is always likely to cost rather more per month than a mortgage repayment will.

 

[DarloRich]

Regardless of "rate trapping" in any given area renting is always likely to cost rather more per month than a mortgage repayment will.

Agreed "down south" - not so sure at home. The differential will not be as wide in any event. Although all that aside the deposit is the real problem.............................

 

[ChiefPlanner]

Just did a quick recce back on value for money etc - my first purchase in London - £27,500 for a one bedroom purpose built in the South Wimbledon area equates to about £100,000 today and I was earning just under £20,000 in today's money. Even so ,as I was moved from Ipswich to London at about the same money + London allowance , it was still challenging - had to sell my modest Mini , and took a Saturday job for a few weeks to get some cash flow.

Was much easier to get started then in London - apart from a less grasping rental market (albeit with lower standards) , there was the option for youngsters to get a foot on the ladder by actually getting social housing - yes , really - friends of mine lived in the tower block estate overlooking Euston station - Camden "hard to let" properties , but it was actually OK and they lived there for a few years quite happily.


This buy to rent culture has really made things harder - though population increases in and around London from the declining years of the 1980's has made a difference.

Apologies for a trip down memory lane....

 

[EM2]

What's included in that - is that just rent or rent, council tax, utilities?

Just rent. It's 42% of my take-home salary.
If I add in all my commitments (including car finance and insurance, life insurance, mobile phone, petrol, charity donations and things like that) that would be about 90%.

I stress that this of *my* income. My wife has a small pension which adds a little to the household budget but not much.

 

[RichmondCommu]

In answer to the OP's original question it would largely depend on where you want to live and whether you want an en-suite room. spareroom.co.uk would be a really good place to start.

As an aside I sold the first place I owned (18 Gables Croft, SE12) in 1992 for £36,000. Last year the same place (with no gas central heating) was sold for £235,000 which is ridiculous.

 

[najaB]

I don't think it's a sensible one. A more sensible one is whether the money you have left after paying for essentials is enough to allow a decent life.

It's based around the idea of being 'working poor' - if you are working hard and not showing any benefit for it then you might as well not be working.

 

[RichmondCommu]

It's based around the idea of being 'working poor' - if you are working hard and not showing any benefit for it then you might as well not be working.

However earning your own money boosts your own self esteem and gives you a purpose in life. The very fact that you have to get up in the morning and make yourself presentable (assuming that you don't have young children otherwise you have no choice) makes you feel better about yourself even before you head off to work.

 

[otomous]

That is very illuminating, thanks.

Personally I think "poverty" is an overused word in the UK, where most people probably understand it to mean "absolute poverty". In my opinion the concept of "relative poverty" is meaningless, has little application outside of UNESCO's rarefied strata of existence and frankly is quite insulting to those in absolute poverty - very few of whom exist in the UK (the homeless probably the only example I can think of).

We are all in "relative poverty" if we choose to conpare ourselves with the right set of people. Those of us in "relative poverty" will have options - move to a cheaper part of the country, downgrade to a flat share rather living alone etc.

If I make a bad financial decision, overstretch to a house I can't really afford, I might well be living in relative poverty but would most people consider that "poverty" was an appropriate description of my situation? I strongly suspect they would not (they'd naturally equate the meaning of poverty with absolute rather than relative poverty). Hence bandying "poverty" around in the context of a discussion about the cost of renting property in London is misleading, in my view.

You're missing the point. It's not about comparing yourself to other people and finding you have a less luxurious lifestyle. It's termed relative, because in a first world country, you are far less likely to be homeless and hungry than in a third world country. You may be poor relative to the standards you might reasonably expect in a first world country - say, the resources to procure a home in reasonable condition, that you can afford to furnish and heat, afford suitable clothes for work or your children's school uniform, afford to use transport, be able to buy decent food, in short, to be able to participate in the society you reside in. Take food as an analogy. Buying basics goods when your neighbour buys the premium range is not relative poverty. Living on basics beans on toast and skipping meals because you cannot afford a balanced diet including fresh fruit and vegetables is relative poverty.

 

[najaB]

However earning your own money boosts your own self esteem and gives you a purpose in life.

To a point, yes. But when you work hard, are constantly tired, have no leisure time (or leisure money), are barely able to put food on the table and are no better off month on month that self-esteem starts to wear a little thin.

 

[amateur]

Looking at central London. Budget £1,000 all inclusive bills and council tax! is that OTT. Used to live up North once a moon ago!

 

[DarloRich]

Looking at central London. Budget £1,000 all inclusive bills and council tax! is that OTT. Used to live up North once a moon ago!

According to the indiependant:

The average monthly rent paid for new lettings in greater London in July was £1,564

http://www.independent.co.uk/news/b...exit-real-estate-housing-market-a7880266.html

But the good news is that rents fell by 0.6%!

 

[radamfi]

However earning your own money boosts your own self esteem and gives you a purpose in life. The very fact that you have to get up in the morning and make yourself presentable (assuming that you don't have young children otherwise you have no choice) makes you feel better about yourself even before you head off to work.

You've said this on a previous thread, however you admitted that you will be retiring in the near future, well before standard retirement age, so you presumably could continue to work if you want to.

I more or less retired a couple of years ago at the age of 41 and was perfectly happy and had no problem with self-esteem. Now I'm forced back to work thanks to the uncertainty after the Brexit vote. I was definitely happier when I wasn't working.

 

[DarloRich]

Now I'm forced back to work thanks to the uncertainty after the Brexit vote. I was definitely happier when I wasn't working.

Why are yo u"force back into work" after the brexit vote?

 

[radamfi]

Why are yo u"force back into work" after the brexit vote?

My investments (in Euro terms) went down in value. In a post-Brexit future, I won't know how much money I will need as residency in the future might be linked to net worth. Also, I might need to fork out for full priced medical insurance if reciprocal health arrangements cease.

 

[AlterEgo]

I more or less retired a couple of years ago at the age of 41 and was perfectly happy and had no problem with self-esteem. Now I'm forced back to work thanks to the uncertainty after the Brexit vote. I was definitely happier when I wasn't working.

You claimed earlier in the Brexit thread that your life had been "destroyed" by Brexit, yet you claim to have retired at 41!

I can hear the tiniest violin playing.