What Quarter of a Million gets you in London

cells

Graham_Devon wrote: »

When you consider just how many bar workers, shop workers, and all service workers there are in London, it would surely be about right.

There are some very well paid people in London.

However, I doubt there are many checkout operators on anything excessive, and there will be a hell of a lot of checkout operators, hairdressers, bar staff etc.

I really have no idea how these people live in London to be honest.

I like the fact that one of the highlights for one of the homes shown in the article above is that is has central heating..... 250k and the big plus point is central heating!

Ex council flats in council blocks in z2 are now 350+ minimum more lile 400k+


700,000 council flats amd homes rented at well below market rent is how 1.5 - 2 milliom poorer off live

housing benifit probably provides for 500,000 homes in London, plis probably most of the 700,000 cpuncil homes too

the other about 2.2 million homes is a combination of rich people, companies, and those who bought before prices were this high


oh and of course the illegals and semi illegals living 20 to a flat and the sheds/garages with beds

BillJones

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...

Yes, academic pay in the UK is pretty poor. I remember when I told my profesor back in the '90s what I was going to be getting as a starting salary as a graduate that he looked shocked, and said that it was more than he earned after decades in his field.

I'm not really very surprised to hear that it's still poor.

IronWolf

Honestly, anyone can see that prices in London are ridiculous. A 2 bed in Balham, not even central, will now set you back £600k. A 2 bed flat would be a starter home anywhere in the UK, except London - where you need to be a top earner to even hope of getting a mortgage on it.

Rental yields in some parts are crazy low, you have to wonder who is giving out these BTL mortgages where rental yields dont even cover the mortgage payments. Or maybe a lot of cash rich people are just being reckless.

Look at this 2 bed flat in Balham, for sale for £600k
http://www.rightmove.co.uk/property-for-sale/property-30567231.html

Now here is a nicer flat on the same street for rent for £1.6k a month
http://www.rightmove.co.uk/property-to-rent/property-45938738.html

Take off £100pm for service charge and that is £1.5k a month gross yield, i.e. 3%! That is crazy! Gross yields should be closer to 6%, which implies the flat is only worth £300k, half what its for sale for.

My parents just bought a house and are getting a 10% gross yield on it, ofc its not in London.

I know a lady that lives on Whitehall, in a £3m flat she bought 30 years ago. She tells me every new person that buys and moves into the building are either Russian or from some other country. A bit sad that our own people now aren't buying our best properties - not that she can complain she's Polish

setmefree2

IronWolf wrote: »

Honestly, anyone can see that prices in London are ridiculous. A 2 bed in Balham, not even central, will now set you back £600k. A 2 bed flat would be a starter home anywhere in the UK, except London - where you need to be a top earner to even hope of getting a mortgage on it.

There are still plenty of flats around London that are affordable for graduates in their 20s. A flat that is £600k today was never affordable to most young people even in the 80s.

IronWolf

setmefree2 wrote: »

There are still plenty of flats around London that are affordable for graduates in their 20s. A flat that is £600k today was never affordable to most young people even in the 80s.

Rental yields speak more than coulds and shoulds, and at £300k the flat would still be beyond most graduates.

JencParker

onlyroz wrote: »

To call it Putney is a bit of a stretch, but this one's just round the corner from where I used to live:

http://www.rightmove.co.uk/property-for-sale/property-44461147.html

Bit basic, but there's this one:

http://www.rightmove.co.uk/property-for-sale/property-42614605.html?premiumA=true

And if you're after a 3-bed:

http://www.rightmove.co.uk/property-for-sale/property-45110068.html

Mmmm that's the complete dump of a high rise estate where Colin Stagg lived - no one would mistake Roehampton for Putney. LOL

JencParker

HAMISH_MCTAVISH wrote: »

Absolutely.

When London prices have risen so much that enough people are prevented from buying in London so as to equalise supply and demand, prices will stop rising.

But as London is a global city, and demand comes not just from the millions of Londoners but also from tens of millions of wealthy people world wide, that may take longer than many people think....

I'd expect London to slow at some point in the near term, and HPI in the rest of the country to start catching up with London, as the ripple effect already seems to be spreading.

The problem is that you're not just talking about people wanting to buy homes, but foreigners looking to park money as an investment (and in many cases not even renting it out), particularly the Chinese. That money is still coming and as yet has shown no signs of stopping, in fact, they are buying in Greater London and the Home Counties now so little is available in central London.

JencParker

mayonnaise wrote: »

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"?

No, it's the 'I've got one and if I get another I can make even more money out of someone who needs to find somewhere to live and can't afford to buy, and then I'll get another to make even more money!' - It's the greed and materialistic culture that has caused this chaos. Having a home is not enough, have a decent wage is not enough - people want more and more money and that means someone else will get less.

wotsthat

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.

If these are the only people that find London prices affordable that might be indicative of a severe housing shortage where only the richest can afford to buy.

Not a universal view of course. Others think it's down to foreigners, speculators, the BoE doing nothing et al

Surely you must be starting to think the former is the most significant issue?

alexanderalexander

IronWolf wrote: »

Look at this 2 bed flat in Balham, for sale for £600k
http://www.rightmove.co.uk/property-for-sale/property-30567231.html

Now here is a nicer flat on the same street for rent for £1.6k a month
http://www.rightmove.co.uk/property-to-rent/property-45938738.html

Take off £100pm for service charge and that is £1.5k a month gross yield, i.e. 3%! That is crazy! Gross yields should be closer to 6%, which implies the flat is only worth £300k, half what its for sale for.

I agree with your assessment -- although rental yields will always be slightly lower in decent London property (due to perceived lower risk and the plentiful supply of top quality professional tenants), yields this low suggest that the boom in capital values is not in fact being fed entirely or even mainly by genuine underlying demand for places for people to actually live in.