How much rent can I afford?

blujam

Hi all,

Long time reader, first time poster.

I've managed to stay with my parents through university, paying a small rent after I got a part time job, so I've done well so far to save my money for a mortgage deposit. This year I will graduate, get a full time job (contract already signed) and will be moving out with my girlfriend (still at university).

We want to move into a two bedroom flat (spare bedroom for extra space / guests we know we'll have) ideally close to a train station as well as good parking. We have seen a few examples that we like, but don't know whether we can afford them.

I know how much the incoming money will add up to, but outgoing money such as utilities, phones, insurance etc I have no clue about! Since so many of these depend on your specific household circumstances, for example the type of locks on your front door affecting your contents insurance, it seems almost impossible to tell how much all the bills will cost.

On the one hand I don't want to rent a flat we can't afford and end up dipping into my savings, but on the other I don't want to move into a flat that we'll be unhappy living in.

What is the best way to approach this? I don't like the idea of just taking the plunge and adopting a "what will be will be attitude."

Cheers

Lokolo

http://www.stoozing.com/calculator/soa.php

All the things to think about.

If it helps - my 2 bed flat (poorly insulated)

Water: £30
Gas and Electric: £90
CT: £120 - you can look this up beforehand as it depends on property and area. If it is just you and your gf you will get single persons discount whilst she is a FT student
Broadband: £20
Line Rental: £18
Sky: £30
Food for 2: £150-250
Contents Insurance: £200 - again you can look this up beforehand using GoCompare etc.
TV Licence: ~£14

agrinnall

I'm assuming Lokolo's figures are monthly apart from contents insurance which looks to be the annual cost (so around £17 monthly). They seem to me to be in the right ballpark, although I'd save the £30 a month and not bother with Sky.

The big cost of course will be the rent, and without having any idea where you live we can't offer any guidance on that. The other costs are likely to be broadly similar wherever you are.

WibblyGirly

Our rent and bills is just under half of our monthly budget. Our house is pretty cheap to run though and we don't have Sky. We also don't have contents insurance as we own barely anything of value except for our macbooks.

tiger_eyes

Many letting agents will want your household monthly income to be at least 2.5 times the monthly rent, or in other words, the rent is a maximum of 40% of your income. Even that might be tight bearing in mind utilities, food, entertainment, travel, pension, other savings. Take a look at properties in that price range and see what you think.

blujam

Thanks folks, very helpful. We've done a budget now after researching a bit more and it looks like we'll be in the green even with flats I thought were on the top end of our budget. We don't want to go for the top end though as we need to save but we should be fine!