71% of income on rent in London

chewmylegoff

Turnbull2000 wrote: »

Just shows that there's lots of scope for large rent rises in the other UK regions. If Londoners can tolerate rent at 70% of single income, so can tenants elsewhere.

The situation in London is as it is because of the sheer number of people trying to fit themselves into the available housing stock.

molerat

Lizling wrote: »

Just wanted to throw this article out there for debate.

http://money.aol.co.uk/2012/05/08/staggering-rents-swallow-38-of-income

The key bit (to me) is 'Meanwhile things in London are even more bleak, where rent takes up around 71% of income on average and adds up to £25,824 a year.'

If true, I find that absolutely shocking. I knew that 50%-60% of income going on rent wasn't unusual, but 71%!

Is it sustainable?

Of course it is sustainable when the taxpayer is footing a large part of the bill.

PasturesNew

Turnbull2000 wrote: »

Just shows that there's lots of scope for large rent rises in the other UK regions. If Londoners can tolerate rent at 70% of single income, so can tenants elsewhere.

No. 30% of a London wage can leave enough to live on. 30% of a wage outside of London might not even be enough to pay the council tax and utility bills, never mind food/commuting.

HappyMJ

The maximum LHA rate in London is £400 a week. To spend 71% of take home pay on rent someone would need to take home £563 a week. To take home £563 a week someone in London would need to earn about £40,000 per year.....but on that salary and the requirement to have a 4 bedroom house to get that rate and to house their children they would get housing benefit to pay a portion of the rent.

Generali

I have my doubts: I don't think the average rent in London is over £2,000pm. Even if yields in London were 5% (which they certainly weren't when I lived there) then that would make the average rented place worth £500,000.

As yields were more like 3%, that would make the average rented property value about £830,000!

sims01

I live in London and don't know anyone who pays 25k a year in rent.

chewmylegoff

sims01 wrote: »

I live in London and don't know anyone who pays 25k a year in rent.

We pay £19,200 but funded by two incomes. I only know one couple who pays more (£20,400 but their combined income must be close to £200k) and i dont know anyone who is renting anywhere on a single income. Given that pretty much everyone i mix with has two above average professional incomes coming in, I'm pretty confident the average is very obviously not £25,000 or anything like it.

FTBFun

Most people share when they're on moderate/low incomes. I'd concur with this article being a load of toss.

The-Joker

Lizling wrote: »

Just wanted to throw this article out there for debate.

http://money.aol.co.uk/2012/05/08/staggering-rents-swallow-38-of-income

The key bit (to me) is 'Meanwhile things in London are even more bleak, where rent takes up around 71% of income on average and adds up to £25,824 a year.'

If true, I find that absolutely shocking. I knew that 50%-60% of income going on rent wasn't unusual, but 71%!

Is it sustainable?

No it is not sustainable, and when the cuts come in next year rents will fall a long way. Repossessions will go up and property will fall also.

The other option is rents could take up 90% of some peoples income if they insist on still living in London. They will have to have a diet of rice and water, just so the Lanlords can keep paying their monthly mortgage payments.

There seems to be a lack of understanding just how big a deal this benefit cap is for London. It is such a big deal and rents/property would fall so far I can see it being postponed again.

the_flying_pig wrote: »

the changes will obviously, obviously put some downward pressure on the prices that would have prevailed had the cuts now been imposed -billions of pounds worth of state-funded demand will be sucked out of the system.

Not according to the perma propbulls, prices may actually go up as people will have to spend 90%+ of their income on the high rents, so that these Lanlords can keep paying their monthly mortgage payments as they keep going up every year from now on.

The-Joker

FTBFun wrote: »

Most people share when they're on moderate/low incomes. I'd concur with this article being a load of toss.

But people have to share a lot more now than in the past.

The next few years will see even more people sharing, even as rents and property tumble. Not due to any shortage but due to wages going down in real terms and unemplyment going up plus benefits cut and capped next year.