how much rent can i afford?

turtleneck

hello,
i earn a salary of around 23,500 and i just wondered how much i could afford to pay for rent?
i am put off trying to buy at the moment due to the ridiculous prices and don't want to get into a massive debt.
rents are also high round here but at least it's not such a commitment and i can save a little each month as a contingency.
so is there a rule of thumb for how much you should pay in rent?
thanks
turtle

19lottie82

turtleneck wrote: »

hello,
i earn a salary of around 23,500 and i just wondered how much i could afford to pay for rent?
i am put off trying to buy at the moment due to the ridiculous prices and don't want to get into a massive debt.
rents are also high round here but at least it's not such a commitment and i can save a little each month as a contingency.
so is there a rule of thumb for how much you should pay in rent?
thanks
turtle

Rule of thumb is no more than a third of your salary but that obviously depends on your lifestyle and other commitments

ClareTeaches

Not meaning to be facetious, but how long is a piece of string? How much you can afford isn't only determined by your income. I would recommend you sit down and work out how much you spend on different outgoings currently (mobile phone, gym, toiletries, magazine subscriptions, food, going out, savings, travel/car, etc), then do a bit of research to find out what your extra outgoings are likely to be when you rent (water, council tax, gas, electric, landline and broadband, cleaning products, etc). Look at how much you've got left and this gives you an idea of the absolute maximum you are likely to be able to afford to pay on rent.

I'd then compare with rental prices in your area/desired areas and see what you could get for your money.

Do you currently live with parents? Just asking, as (a) they can be a good source of advice on living expenses and (b) it can be a bit of a shock to the system how much 'living' costs, if you've not had to pay for everything before! Also, are you thinking about renting somewhere alone or as a house/flat share? This can make a massive difference to your outgoings - my partner and I are sharing with another couple (friends of ours before living together), which has really cut the cost of renting, allowing us to save a deposit, so if you'd like to buy in the future sharing or continuing to live at home (if that's what you do now) could help you save for a deposit.

I have heard a recommended max percentage of income, but don't recall it off the top of my head - I'm sure someone else will be along shortly to let you know!

monty-doggy

My first place out of parents I was earning £23000 and paid £450 rent plus all bills, I ran a car and managed just fine.

[Deleted User]

I've been looking for a new rental around here and a few of the letting agencies said that they would require proof that we earned 3 x times the the rent.

To be honest I'd not feel comfortable spending more on rent anyway.

turtleneck

well i only pay 200 a month at the moment. for nice one bedroom flats the rents are 700-800. council tax would be the only bill i couldn't do much about. i plan to use very little gas or electric. my only outgoing is a phone at 10 a month.

19lottie82

turtleneck wrote: »

well i only pay 200 a month at the moment. for nice one bedroom flats the rents are 700-800. council tax would be the only bill i couldn't do much about. i plan to use very little gas or electric. my only outgoing is a phone at 10 a month.

Internet? TV license? Water? Contents insurance? Food?

turtleneck

yeah i will have internet, wont bother with a tv, minimal water usage and no contents cover as i have few contents. i am a minimal person. food i have no idea, maybe 40 a week?

my main question was based on my salary is there a limit to what an estate agent will allow me to rent?

19lottie82

Some may want a salary equal to or above three times the annual rent

[Deleted User]

turtleneck wrote: »

my main question was based on my salary is there a limit to what an estate agent will allow me to rent?

Yes, 30x your monthly rent is a common figure (the one that all of my tenancies have been tested against at least).

£500 = £15,000 salary required
£800 = £24,000 salary required

However every agent is different.

Personally I think you would be insane to go from living at home to living in the most expensive property that you can "afford", the real world is far more expensive than anyone can ever imagine. Anything about 1/3rd of your monthly take home is too much in my opinion. I'm a minimal person too and it still caught me by surprise how expensive living independently is.

turtleneck

i'm not looking for the most expensive place i can afford, ideally i'd pay 500 a month but the market in my area is very expensive. there is very little under 700 apart from horrible studio flats and shared houses. as you get close to 800 you get some nice one bedroom apartments.

i would like to have my own place but have a couple of hundred left at the end of the month so i have the option of saving.