Is London living cost affordable?

movilogo

In light of recent housing benefit debate, I wonder how does a family (hubby+wife+toddler) earning say £30-£35k (household income assuming wife looks after the child) survives in London?

I understand mere survival is possible if leaving too far away (zone 6?) but one needs a reasonable amount of entertainment as well.

Buying a house at that wage is near to impossible. Cost of tube/overground fare is prohibitive.

Even rent + council tax is sky high.

Am I correct assuming that London population now mostly contains either rich people or poor living on dole.

Cleaver

movilogo wrote: »

In light of recent housing benefit debate, I wonder how does a family (hubby+wife+toddler) earning say £30-£35k (household income assuming wife looks after the child) survives in London?

I understand mere survival is possible if leaving too far away (zone 6?) but one needs a reasonable amount of entertainment as well.

Buying a house at that wage is near to impossible. Cost of tube/overground fare is prohibitive.

Even rent + council tax is sky high.

Am I correct assuming that London population now mostly contains either rich people or poor living on dole.

From a simplistic point of view, London seems to be made up of largely normal people, doing normal jobs and living pretty normal lives. I know what you mean, it does seem mad that people can afford to live there, but somehow they do.

I guess it's a lot about lifestyle choices - pretty much all of my London friends pay a lot of money to live in a flat with a bunch of other poeple because they love living in London.

ultrawomble

I existed in London for 10 years, now I no longer reside there I live.

Niv

Well I was in london last weekend so thought I would take a look in a random letting agents window in Paddington. The rent they were asking was ~half of the rent for a similar house in the Somerset Town I live in. It was a standard house 2bed type thing I looked at.

So it seems in this case (I am not saying all cases) that rent is not unaffordable in this area of London.

House buying however looked to be a very different picture.

drc

We live in London, on a not far off wage from that mentioned in the OP post.

We live in a very very small flat which we pay a high rent for and high council tax. We budget carefully and are very frugal. This is the area I grew up in and I like it, although over the last 10 years prices have gone mad. There is no way we could afford to buy in London, even just a basic flat around here (50sq meters) - asking price is well over £250k and that doesn't include the lease. I am trying to persuade hubby to move abroad as I hate what this country has become and how expensive it is, we shall see. But yes, you are right, certainly in Central London, the only people who can afford to live there are the very rich or the very poor. It's a strange world.

Jowo_2

I believe that the majority of LHA claimants are in employment, the working poor.

when you travel outside of the central London zones, the amenities and entertainment facilities don't suddenly cease - there will still be parks, libraries, pubs, gyms, restaurants,etc!

I thought that Westminster has one of the lowest council taxes in London, if not the UK - I've paid similar rates of CT in East Sussex and Scotland to those charged in London.

Wheezy_2

ultrawomble wrote: »

I existed in London for 10 years, now I no longer reside there I live.

Didn't you move to South Manchester?

Out,_Vile_Jelly

It all depends on your lifestyle and expectations I suppose. Buying is only possible if you're on an extremely high salary, or if you're a couple both on above average salaries. Renting is more competitive than in many other towns though, and most people in their 20s flat/house share which is generally fun and sociable and definitely cheaper for bills. There is a huge amount of stuff to do for free or on the cheap here; the main collections of all the major museums and galleries are free (unlike in most capital cities), there are lots of parks (it's apparently one of the greenest capitals), there are regular festivals/free screenings, the Prince Charles cinema is cheap as chips, and there are heavily subsidised tickets at the National, and being able to buy West End tickets direct from the Box Office, or getting discount ones on the day, saves money. There are cheaper pubs and places to eat (clue: not the ones the tourists queue up to get into around Leicester Sq).

More and more people choose to cycle, and I actually think a travel card is good value for the amount of journeys I make in a month. As it includes night buses, that cuts out the faff and expense of taxis (have hardly ever been in a black cab in my many years of living in London). Using Oyster pre-pay on buses can work out very cheap apparently.

Wandsworth Borough has the cheapest council tax in the UK IIRC (I moved 5 mins down the road and am now paying twice for a similar sized property).

princeofpounds

Yeah you are pretty correct.

I have been at that wage level (single) before. It wasn't a problem to houseshare in a decent enough area, but then I didn't have wife+child and I did have to watch my money despite it being way more than I thought I would earn at that age. With dependents, it would have been a nightmare.

Funny you mention council tax. It's often highest in the boroughs of London that are the poorest (places like Tower Hamlets being twice Chelsea, for instance) as they see paying for services for poor people as the way to correct the situation. Of course, to the working poor these sums are unaffordable, so it's even harder to be in a situation where work pays.

But the flaws in the current system are very obvious to anyone who works in London and doesn't get assistance. It's a bit hard to describe it all as there are several streams of HB/LHA/council housing all with different rules, but here are a few points on LHA which is the most prevalent I believe:

- The areas considered for housing are far too small. It makes sense to say that a person can present themselves in a council's area and must be housed in that area if we are talking something like Hampshire, or the East Midlands. But it doesn't make much sense when the council is Kensington and Chelsea, which is a simple walk from the cheaper battersea, a bus trip from the even cheaper wandsworth, and a tube trip (of less than 30mins) from a relatively cheap - for London - area like Acton.

- Combine this with the utter insanity of the way LHA used to be done (the rent should be at the median level for the area for the particular size of property). This meant that not only were people entitled to live at working people's expense in a nice area, but they were also entitled to an average house in a nice area, not even a cheap one. So *by definition* they were going to be better off than half the working population to start with.

- Finally, add to that the entitlement to space (especially for children) and we are talking large houses. 4/5 beds is not uncommon. So not only are they entitled to a)nice area, b)decent house, it can also be a big house. And because big houses tend to be in nicer sub-areas and generally better all round, they get an extra uplift from this too on the other factors.

So this is how you end up with the unemployed person living in the 5 bed georgian terrace in Chelsea.

What infuriates me when people oppose the reform of LHA is that this would be utterly impossible if such people were actually able to support themselves. So of course what such people will never do again is support themselves and to an extent I don't blame them because it would be suicidal to their standard of living.

Even the £400/w cap is actually astronomical. £20.8k/yr implies a salary of over £27k, which itself is a *better* than median salary for the UK, and that is housing allowance alone!

And to get to the cap you only need to qualify for a 1 bed in Kensington and Chelsea (if you qualify for the upper band) or a three bed (if you qualify for the lower). Qualify for a 4 bed (as plenty do) and your council will award you up to £1000 per week! That is an award that right away puts you in the top 2% of earners! These people are NOT poor, in terms of the services they are being given.

It kind of destroys the whole idea of welfare being a safety net, because we are not paying for people to live in acceptable conditions - we are paying them to live in conditions that no normal working person with exactly the same personal situation except the unemployment could ever dream of. So yes, you can only live in chelsea if you are a) rich or b) 'poor' and on something like LHA.

But what is the really tragic thing is that for every extra bedroom in chelsea provided on LHA, that directly takes away a bedroom in chelsea from a working person, quite possibly one with a child just the same. That is both in physical and in monetary terms (through taxes). Plus costs to administer the whole system.

Now, picking on K&C is obviously extreme, but the distortions here happen everywhere, just at a lower level. They are integral to the system.

How to fix it? I have some opinions, but I think that the coalition is at least trying to be more fair to taxpayers and to working people.

And I didn't even get on to the idiocy of targeting a median rent for LHA, because the average basically becomes a floor on the market for anyone willing to accept LHA clamants, which pushes the market up, which pushes the average up etc etc etc.

Sigh.

ultrawomble

Wheezy wrote: »

Didn't you move to South Manchester?

Yep. No regrets. Did my time in the filth and pollution. Never again.

movilogo

I am trying to persuade hubby to move abroad as I hate what this country has become and how expensive it is

May be instead of abroad, you might find it is better to move slightly above South East.

There are still decent jobs around and cost of living is far less compared to that of London.