Percentage of net income on rent in London

tonynz

Hi I know this has been done before but I can't find up-to-date threads.

Anyway I was wondering what % do you guys spend on rent vs. income in London?

Also what Zone do you live in would be nice so I can get an idea about the costs of living in London!

Thanks

BitterAndTwisted

When I was working my rent was equivalent to about a third of my take-home income. I believe this is about average for London. I live in Zone 3 and my fares to work were £30 a week

princeofpounds

I have typically found the rates people have to pay as single people to be much higher than that, especially early on in careers, maybe up to 50% of net income. Gets better as you get a partner or share, and of course depends on your aspirations for standard of living.

BitterAndTwisted

Rather than figuring out a percentage of someone else's salary which you've no knowledge of it might be more helpful to know that flat-sharing costs in the region of £100 and a one-bedroomed flat could cost £250 a week minimum plus utilities but this is entirely dependent on quality and location and that can vary hugely.

To give you an example, my niece is just about to take a spot in a flat-share at Canary Wharf for about £660 a month which will include utilities, Council Tax and a cleaner to go in once a week to keep the kitchen and bathroom sorted. Her fares to work will be pretty minimal at about £20 a week. If she moved further out her rent would probably be less but her fares more, especially if she had to use the overground train rather than just tube or bus. Swings and roundabouts.

tonynz

BitterAndTwisted wrote: »

Rather than figuring out a percentage of someone else's salary which you've no knowledge of it might be more helpful to know that flat-sharing costs in the region of £100 and a one-bedroomed flat could cost £250 a week minimum plus utilities but this is entirely dependent on quality and location and that can vary hugely.

To give you an example, my niece is just about to take a spot in a flat-share at Canary Wharf for about £660 a month which will include utilities, Council Tax and a cleaner to go in once a week to keep the kitchen and bathroom sorted. Her fares to work will be pretty minimal at about £20 a week. If she moved further out her rent would probably be less but her fares more, especially if she had to use the overground train rather than just tube or bus. Swings and roundabouts.

From what I've seen £660 for Canary Wharf is very cheap! A lot of places are so expensive and I'm starting to wonder if people are spending more % of their income on rent.

I never want to spend more than 25% but in London this is possibly impossible...

princeofpounds

A lot of the stuff in the wharf isn't as expensive as you might think it is because it's not really central. A 2 bed in a nice area of zone 2 might cost about 1500pcm, so that would be 750 for two sharers.

You are right, 25% is unrealistically low. People do have to spend more on rent here (which is one reason London salaries are so much higher - it really does all get consumed by expenses).

BitterAndTwisted

tonynz wrote: »

From what I've seen £660 for Canary Wharf is very cheap! A lot of places are so expensive and I'm starting to wonder if people are spending more % of their income on rent.

I never want to spend more than 25% but in London this is possibly impossible...

My niece is VERY fortunate as the rent she will be paying currently is about 25% of her take-home pay but she's worked terribly hard at her education for a long time to get where she is now and has been very, very lucky indeed to have secured the post she has and she knows it.

It might be possible to find somewhere to rent for 25% of your net pay but it might entail becoming a lodger in Zones 3 or 4 rather than flat or house-sharing in Zones 1 or 2

tonynz

princeofpounds wrote: »

A lot of the stuff in the wharf isn't as expensive as you might think it is because it's not really central. A 2 bed in a nice area of zone 2 might cost about 1500pcm, so that would be 750 for two sharers.

You are right, 25% is unrealistically low. People do have to spend more on rent here (which is one reason London salaries are so much higher - it really does all get consumed by expenses).

I think that tenants of places with rents £800-£1200, must earn a lot of money (i.e. £80k+) or must spend at least 50-60% on rent with no money to save!

princeofpounds

I think that tenants of places with rents £800-£1200, must earn a lot of money (i.e. £80k+) or must spend at least 50-60% on rent with no money to save!

Do you mean pw or pcm?

Anyway, yeah, a lot of people in their 20s manage to save absolutely zero in London, even on ok wages, even if they are not too extravagant in their lifestyles.

To be honest I struggle to understand who is renting all the 4,5 bed places that are regularly marketed at 800-1200pw (we aren't talking zone 1 here by the way, wandsworth not chelsea!).

Has always been a mystery for me. You would need an income in the top 1% of the UK to afford it and yet even if you say London is the top 15% of the entire UK population you would still struggle to magic up enough wealthy people for these sorts of properties at these rates.

I can only conclude there is a lot more money sloshing around out there than I realise, but I can't think where these people are getting it from.

1000pw is 52k pa, which assuming a huge 50% of net is 104k net, which is a salary of 170k. There are loads of 80-90 types in London, but 170k is big even here.

Out,_Vile_Jelly

tonynz wrote: »

I think that tenants of places with rents £800-£1200, must earn a lot of money (i.e. £80k+) or must spend at least 50-60% on rent with no money to save!

I certainly earn nowhere near £80k and pay approx 50% of my take home to rent a nice 1 bed in Wimbledon (zone 3). I still manage to have a good social life and save 10% and my annual bonus. Being single is financially punitive unfortunately.

The bigger the houseshare, the cheaper your outgoings tend to be in terms of shared bills. If you are able to cycle to work that can cut travel costs quite significantly.

tonynz

princeofpounds wrote: »

Do you mean pw or pcm?

Anyway, yeah, a lot of people in their 20s manage to save absolutely zero in London, even on ok wages, even if they are not too extravagant in their lifestyles.

To be honest I struggle to understand who is renting all the 4,5 bed places that are regularly marketed at 800-1200pw (we aren't talking zone 1 here by the way, wandsworth not chelsea!).

Has always been a mystery for me. You would need an income in the top 1% of the UK to afford it and yet even if you say London is the top 15% of the entire UK population you would still struggle to magic up enough wealthy people for these sorts of properties at these rates.

I can only conclude there is a lot more money sloshing around out there than I realise, but I can't think where these people are getting it from.

1000pw is 52k pa, which assuming a huge 50% of net is 104k net, which is a salary of 170k. There are loads of 80-90 types in London, but 170k is big even here.

I meant around £800-£1200 per month.... as much as I would love to live in these areas. (Victoria)... it would mean I can't save up