How much should I be spending on rent

zoe.broad

I am taking an apprenticeship from September about an hour and a half away from home so I will be moving out.
I'll be earning about £11000 per year and will be keeping my weekend job at least until December (earning around £400 per month).
How much can I afford to be spending on rent (with bills included)?

hazyjo

I think the general consensus is 'up to a third' although it tends to go up to half or more in London.


Jx

Barejester

When I was renting a metric that some agents used was if the monthly rent multiplied by 40 would be higher or lower than my wage - if it was lower then they would consider it unaffordable once you take into account the general cost of living. If you were to use this as a consideration, that would suggest on the salary of £11,000, you would be able to rent a place costing £275 excluding bills.


Entirely dependent on where you are, but at that amount I would think you could maybe get a single bed room in a houseshare which could build into the price bills and council tax.


Could you also consider staying at home still and making the 90 minute commute? It may seem like a long time per day, but if it's public transport you can utilise the time well - I've had commutes of upto 2 hours, and my current commute is 50 minutes which cost's me £60 a month in bus tickets and I use that time each day to catch up with friends/family, work on CPD and watch TV on my iPad.

gingercordial

zoe.broad wrote: »

I am taking an apprenticeship from September about an hour and a half away from home so I will be moving out.
I'll be earning about £11000 per year and will be keeping my weekend job at least until December (earning around £400 per month).
How much can I afford to be spending on rent (with bills included)?

This is going to be very difficult for us to advise on, but here's what I would do:

You can earn £11,500 tax-free this year. That means you won't be paying tax on your apprenticeship income. However you will be paying tax on your weekend job for most of the year.

That means each month you will be bringing home roughly:

£917 from the apprenticeship (£11,000 / 12, tax free)
£272 from the weekend job (£400 less 20% tax and 12% NI)

Total = £1,189 take-home pay per month

I have not factored in any tax credits or any other income, which you would need to check as I don't know your circumstances.

First of all, is the weekend job even worth it after tax? Does the £272 a month make up for all the transport costs of getting there and back? Is it every weekend, both days, staying over with your parents? How often do you have to make that three-hour round trip and how much does that cost in train fares? Or if you drive, how much does it cost in petrol and could you even get rid of the car (and all the insurance costs etc) if you didn't keep this job? Could you get the same kind of job where you are moving to and save the travel costs - if it's something like a supermarket they will often allow transfers.

Now look at where you are going to move to. Find the local council's website and check council tax. If you are going to live alone you can take 25% off as a single person discount.

Think about transport - how are you getting to/from that job? Factor in fares or petrol, insurance (split your annual renewal into 12), set some aside for repairs.

Then I would prepare a Statement of Affairs (essentially a budget) from here: http://www.stoozing.com/calculator/soa.php

Be realistic, include everything you can think of including some fun money. If you don't know what to put for utilities, food etc, try asking your parents what they pay. If you have any debt/credit card repayments you need to include those. Leave zero for rent for the moment.

What does that leave you with as "spare"? This is your maximum rent.

Then look on rightmove, spareroom and similar - can you actually rent somewhere close to your new work for that amount? Or could you get a room in a flatshare for that, maybe even including some of those bills?

If not, you either need to cut some costs from the budget or live further away - but remember that will increase your transport costs.

If you are having trouble making it work you could post your SoA over on the Debt-Free Wannabe board as they are brilliant at spotting savings or where you have not been realistic (too low or too high). You don't have to be in debt to post there - they will happily give advice that will stop you getting into debt!

Good luck.