What Quarter of a Million gets you in London

cells

Generali wrote: »

Right out in the 'burbs too:

http://www.telegraph.co.uk/property/propertypicturegalleries/10925298/London-homes-for-sale-for-under-250000.html?frame=2954071

The median household income in London is £39,000 and the BoE has recently said that the very riskiest mortgages should be 4.5x household income.

If you have £50,000 saved up, more than 3 years net income, and you take out the very riskiest mortgage on offer you still can't afford a tiny flat in a council block in Greenwich:eek:. Even someone on £60k, the median income for the top 10% will be pushed to buy in a year if prices continue to rise at the present rate.

Something's gotta give. There'll be a revolution at this rate.

Less than 50% of homes are now owner occupied in London and that figure is falling

So you need to ignore the bottom 50% altogether.
The 51 percentile can then afford the worst for sale om the market and going from there

I wouldn't be surprised if in twenty years time only 30% in london owned and 70% rented.....but what will that means

BTW this is what I mean by the real problem of the shortage. A market in a shortage tends towards BTL and a market in good supply tends towards owner occupiers all else equal

mayonnaise

Graham_Devon wrote: »

Life is about more than buying a house. It's about the joy of children, time with family, enjoying your life whie it's here.

I find life a bit more enjoyable as a home owner. And the joy of children is also that bit more joyful when you can offer them a stable home. But to each their own I guess.
Sure, sacrifices have to be made, nobody's getting a free ride.
In our case, it meant me putting in ridiculous long hours and taking on extra jobs for the first years into our mortgage.
Then we came to that point where we blitzed the mortgage far enough to enable Mrs. mayo to have our kids and stay home and for me to get back to normal working hours.

I wonder what changed? Is it our instant gratification culture? "I want it all and I want it now"?

Out,_Vile_Jelly

I work for one of the UK's top universities, in a department ranked first for its subject (a branch of engineering). Average salary for an experienced lecturer (top school grades, top degree, 4 years of PhD study, years of research, supervision and teaching) is ~£70k. We have a real problem in retaining lecturers in their mid-30s, at a time when they should ideally be starting to run their own group, submitting bids for large scale funding and putting their mark on their field. We often lose them to universities in Germany or the US where they can afford a 4-5 bedroom house and their partner can look after the kids, rather than two salaries funding a 2 bed flat in London. This isn't people moaning vaguely about unfairness on the internet- it's being discussed at the highest faculty level as it's a problem that didn't exist when profs currently approaching retirement age were raising families on an academic salary in London.

setmefree2

Generali wrote: »

Right out in the 'burbs too:

http://www.telegraph.co.uk/property/propertypicturegalleries/10925298/London-homes-for-sale-for-under-250000.html?frame=2954071

The median household income in London is £39,000 and the BoE has recently said that the very riskiest mortgages should be 4.5x household income.

If you have £50,000 saved up, more than 3 years net income, and you take out the very riskiest mortgage on offer you still can't afford a tiny flat in a council block in Greenwich:eek:. Even someone on £60k, the median income for the top 10% will be pushed to buy in a year if prices continue to rise at the present rate.

Something's gotta give. There'll be a revolution at this rate.

To be fair, it never was that easy to buy a flat in London even when I got here in the mid 80s. It usually took 2 salaries in your mid 20s - everyone I knew bought with a partner or friend even friends plural.

setmefree2

Generali wrote: »

The median household income in London is £39,000

The average Graduate starting salary in London is £27,000.

Cornucopia

Out,_Vile_Jelly wrote: »

I work for one of the UK's top universities, in a department ranked first for its subject (a branch of engineering). Average salary for an experienced lecturer (top school grades, top degree, 4 years of PhD study, years of research, supervision and teaching) is ~£70k. We have a real problem in retaining lecturers in their mid-30s, at a time when they should ideally be starting to run their own group, submitting bids for large scale funding and putting their mark on their field. We often lose them to universities in Germany or the US where they can afford a 4-5 bedroom house and their partner can look after the kids, rather than two salaries funding a 2 bed flat in London. This isn't people moaning vaguely about unfairness on the internet- it's being discussed at the highest faculty level as it's a problem that didn't exist when profs currently approaching retirement age were raising families on an academic salary in London.

Depending on where in London you are talking about, it will never have been particularly affordable. Many parts of Zone 1/2/3 London simply don't have a large supply of 4/5 bedroom houses.

setmefree2

Bantex wrote: »

Seem to remember people saying that when a grotty one bedder in an unfashionable part of SE London hit £100,000.

I remember people saying that to us when we bought a semi in central Ealing for £98k in 1993......

AndyGuil

Graham_Devon wrote: »

So what are we left with? A couple of lawyers working full time, with kids, but essentially, who already own a house, with equity, who are moving to a cheaper area....which suggests moving even further out of the areas that Generali posted.

Prices will be affordable then?

Fantastic. Won me over.

That really depends on what you want. In this example an extra room is necessary and so moving further out isn't needed. If they were after a 4 bed detached then further out is. Of course this situation is very modest in many real cases.

setmefree2

Graham_Devon wrote: »

Fantastic. Won me over.

You do seem to want to lounge around all day doing nothing and live in a big house.... when was life ever like that?

setmefree2

mayonnaise wrote: »

Ah yes, forgot to add.. we have 2 kids.

We have 2 sons - one 18 and one 20. (The eldest just finished 2nd year at uni, the youngest should start in Autumn). If they earn the average graduate starting salary in London of £27k and had a partner, and if we give them a deposit (which my parents did) then they would be able to afford the one bedroom flat that we bought way back in 1987 when we were 24.

So as far as I can see they are in exactly the same position as we were in 1987.

(To move up the ladder we bought 2 houses in need of serious updating in the 1992 dip, and the 2002 dip ie the worst houses in the best streets)