How do I calculate how much rent I can afford?

AJayneC

That's great. I just wanted a common proportion of salary people spend on rent.

I receive more monthly salary than the cost of rent for about 98% of properties in the area. Hence I just wanted a sensible estimate of what I should be spending.

I agree it is all about priorities, and it is for me to work those out. This is why I asked a simple question in my original post, and didn't invite anyone to help me create a budget or delve into my lifestyle. I was hoping to get a general consensus of the percentages of salary everyone spends on rent, hypothetical or actual. it seems to be around a third.

AJayneC

giddypenguin wrote: »

Your question is backwards - Other people can't tell you what you can afford. What are your monthly outgoings now? Can you reduce these? Do you want to? Do you want savings? Only you can work out how much you can afford to live happliy.

My question 'do I prioritise my housing or lifestyle?' Was rhetorical, I didn't want or expect anybody to answer it!

BitterAndTwisted

AJayneC wrote: »

I already stated I am living alone.

Actually, your first post did not disclose that information at all. If you are already living alone I don't understand why you don't have a vague idea of what the running-costs would be for a flat unless that is because your current rent includes CTax (if applicable) and utility-bills.


I know exactly how much it costs to rent a flat in the area I'm looking, although that wasn't my question.

What I want to know is how do I calculate/estimate how much I personally can afford, from the salary I will receive?

As none of us reading your posts know what your current income or travelling expenses might be, that's not a question anyone else can give you even a vague answer to.

As I said before, you should estimate about £200 a month as an absolute minimum for CTax and utility bills. Add to that whatever the the rent might be, your travel expenses to and from work, mobile phone and internet access.

How do those numbers stack up before you've added in your food bills?

AJayneC

I meant I will be living alone, when I start to rent. I am not currently living alone.

I have no travel expenses, hence not mentioned.

I don't want or expect somebody else to calculate the exact figure, my question was,how do 'I' calculate how much rent I can afford?

I must have worded the question badly, sorry. I was hoping people could give me insight into how much of their salary (a percentage) they spend on rent, and/or what percentage they would recommend.
From this percentage I can calculate my own.

nakiwala123

I have been told that it should normally be 1/3 on rent, 1/3 on bills and 1/3 saving.

How realistic this is is a different matter!

G_M

nakiwala123 wrote: »

I have been told that it should normally be 1/3 on rent, 1/3 on bills and 1/3 saving.

How realistic this is is a different matter!

'Should'? Who defines this 'should'?

Is this some sort of government guideline? Has the Nanny State extended into this area of our lives too?

It is for each individual to decide where their income goes. Some people just must have the latest phone, designer gear, fancy holiday and for them that is more important than renting a fancier home or saving for a pension.

Nothing wrong with that if it makes them happy.

Angry_Bear

nakiwala123 wrote: »

I have been told that it should normally be 1/3 on rent, 1/3 on bills and 1/3 saving.

How realistic this is is a different matter!

Hmm, I thought it was 1/3 rent+utilities+council tax, 1/3 general living, 1/3 savings. No matter.

OP, why don't you play with some numbers in here and see what you feel you can live to: http://www.makesenseofcards.com/soacalc.html

R_P_W

Don't take this the wrong way but 1. You appear to be making this more complicated than it really needs to be 2. You are getting quite defensive when all people are trying to do is answer your question best they can with the information they have.

The real answer is that people cannot answer it. So take you income and deduct ALL expenditure (bills, living, social, savings, travel, insurance) and then you will have an amount of money left (hopefully) that amount based on your income is the absolute maxium you can afford. Whether you choose to use it all or use less for rent is up to you.

There isnt a magic formula that tells you what you should spend on rent. In certain parts of the UK rent maybe very low if the local enomy isnt great and its not a desirable place to live/no jobs etc - so people there might have a relatively low rent. But then compare that to say central london - rent for some people might be more than 50% of their income (they dont want it to be but it just is).

Just do some simple maths

HappyMJ

Angry_Bear wrote: »

Hmm, I thought it was 1/3 rent+utilities+council tax, 1/3 general living, 1/3 savings. No matter.

OP, why don't you play with some numbers in here and see what you feel you can live to: http://www.makesenseofcards.com/soacalc.html

It was a guideline when rents were affordable. The guideline of thirds doesn't quite work out the same today as rents are quite a bit higher.

i.e fo me rent of £90 a week plus utilities plus CT would come to around £150 per week plus another £150 for general living plus £150 for saving would mean a take home pay of £450 a week. That's only 20% on rent.

In Central London rents alone of 40% to 50% of income are not unheard of and are quite common.

LittleMissAspie

I do 50% savings, 25% bills and 25% spending money. But I sneakily count my mortgage as savings because we're mostly paying capital off now.

When I was renting, my half of the rent was 26% of my take home pay plus about 16% for household bills. That was for a cheapo 1-bed house.