What Quarter of a Million gets you in London

Cornucopia

There seems to be some confusion over how people make decisions about how, where and what to rent or buy.

The need for shelter is pretty fundamental, and at the same time there are many ways to achieve it.

Buying or renting property is always based on a set of compromises - some of these compromises represent limitations imposed by lack of funds, and some represent reasoned (or maybe less reasoned) views about likely future risks and future financial planning. ie. I can afford this now, but what will I want 5 years down the line?

For many people, there will be a complex set of factors regarding size, location and price of property. These factors are complicated by the counter-play of purchase options vs. rental options. We know that London rental prices are suppressed vs. purchase prices. This is a feature of the market (based, IMHO, in the factoring-in of capital growth to the rental yield).

Add to that the idea that many people may be prepared to take on a high rent because it is fundamentally time-limited compared to a high mortgage payment. And then add to that the lower standards applied for affordability of rents vs. mortgage payments.

Is the decision ultimately about affordability? Kind of. It's about what can be afforded based on income, capital and external constraints. There may also be a consideration of relative value.

The one thing it isn't about is a notional evaluation of absolute value - because that is pointless. Like the Little Britain toyshop, you can wait around for something "less pirate-y" all week, and it won't help. Just as you can wait around for the £50K bargain in a £250K market... and not have the place to live that you need/want.

gazter

https://onedrive.live.com/redir?resid=161BD76D8E395DB8!6202&authkey=!AEEHwDrcNXfDIt4&v=3&ithint=photo%2c.jpg
This is what I got for £250,000 in a village on the edge of a city in the north of England, bought last year.
Find the fuss over London hard to justify.

AndyGuil

gazter wrote: »

https://onedrive.live.com/redir?resid=161BD76D8E395DB8!6202&authkey=!AEEHwDrcNXfDIt4&v=3&ithint=photo%2c.jpg
This is what I got for £250,000 in a village on the edge of a city in the north of England, bought last year.
Find the fuss over London hard to justify.

It really isn't hard to justify. London is strong job prospects, higher salary, a great experience, a life you can't achieve or live elsewhere, etc. I've lived all over the UK (mostly in the north) and I find London remarkable. It wasn't until I lived there that I fully understood what it was about.

shireknight

Snakey wrote: »

How long has it been since a single person working in a coffee shop or a factory has been able to buy, on their own, in a nice part of town? I know I couldn't do it in Manchester in 1993.

Phew looks like I just got onto the housing market by the skin of my teeth then because as a single guy working as a security guard on £3.00 an hour I just managed to buy a small one-bedroom house in Northampton in June 1992.

IronWolf

Snakey wrote: »

How long has it been since a single person working in a coffee shop or a factory has been able to buy, on their own, in a nice part of town? I know I couldn't do it in Manchester in 1993.

My brother works at Iceland supermarket. He's just bought a 2 bedroom house in Sheffield. Not a posh area but pretty nice.

chucknorris

gazter wrote: »

https://onedrive.live.com/redir?resid=161BD76D8E395DB8!6202&authkey=!AEEHwDrcNXfDIt4&v=3&ithint=photo%2c.jpg
This is what I got for £250,000 in a village on the edge of a city in the north of England, bought last year.
Find the fuss over London hard to justify.

London offers great career prospects and when (if) you decide to sell up and move away, you usually have great options. I am from the North originally too (Newcastle) but I opted to stay down South and move to Surrey (a minor downsizing) after about 15 years in London. Although it is quite possible that we may downsize again to somewhere like Devon in the future.

BillJones

chucknorris wrote: »

London offers great career prospects and when (if) you decide to sell up and move away, you usually have great options. I am from the North originally too (Newcastle) but I opted to stay down South and move to Surrey (a minor downsizing) after about 15 years in London. Although it is quite possible that we may downsize again to somewhere like Devon in the future.

I keep checking property prices back home in Newcastle, and it's hard to find a house as expensive up there as a good flat in London is.

One area that seems to be selling for close to London prices, though, are the new flats around the Quayside. They are offered at prices up to £1m, for what look to be not particularly spectacular homes.

kabayiri

AndyGuil wrote: »

It really isn't hard to justify. London is strong job prospects, higher salary, a great experience, a life you can't achieve or live elsewhere, etc. I've lived all over the UK (mostly in the north) and I find London remarkable. It wasn't until I lived there that I fully understood what it was about.

Agreed. I personally find it difficult to imagine what living in central London would be like.

I have worked and stayed in the London area for moderately short periods, but I don't expect it to be similar at all when it comes to permanent residence. My perspective is still rooted to the north. It does feel like the perception gap is widening too.

It would be unrealistic to expect similar wage incomes outside the S.E, but if you reset your expectations I think you can live pretty well if you have good skills.

I know a fair number of people who earn £60K+ up here. Even an assistant head of a secondary school up here can earn more than that. That sort of income gives you a reasonable lifestyle even in a "hellhole Northern town!" (this term copyright of Generali )

chucknorris

BillJones wrote: »

I keep checking property prices back home in Newcastle, and it's hard to find a house as expensive up there as a good flat in London is.

One area that seems to be selling for close to London prices, though, are the new flats around the Quayside. They are offered at prices up to £1m, for what look to be not particularly spectacular homes.

My parents now live in Bedlington (it's cheap as it is an ex mining town) but if I moved back up there I think Morpeth would be the place that I started looking or a rural coastal area. But I can't see myself putting up with those winters, I like outdoor activities, although we do plan to winter in Spain/Algarve eventually so I suppose it isn't impossible that we could do it from the North East.

Generali

kabayiri wrote: »

That sort of income gives you a reasonable lifestyle even in a "hellhole Northern town!" (this term copyright of Generali )

You can have hellhole Northern town. I have rights over Northern Hell Hole. Just don't try to pass off hnt as nhh.