Is £500 rent affordable on £1650 take home income?

dmnsr94

I've recently started a new job and want to rent my own place, but I just need a sanity check on how affordable this will be.

I don't drive, and will pay £50 for a monthly bus pass. Does this sound like a reasonable amount to pay on my income? 

FtbDreaming

I doubt you could rent much cheaper than that anyway no matter where you live. Seems ok to me

dmnsr94

There are a few flats available for slightly less (around 450)

The reason I'm looking at renting this one is because it's furnished. My alternatives are renting a shared house and staying with parents, neither of which I want to do (I have enough money for a deposit for buying a house later down the line) 

NewShadow

The letting agents around here work out affordability by comparing your annual income with (rent x 30) 

Ballpark suggests a take-home of £1650 is around £19,800 gross pa? 500x30 = £15k and therefore you'd meet the local criteria. 

When it comes to if you can afford to live on the remainder... that's up to you and how you choose to spend your money. 

Priority bills are rent, council tax and utilities - make sure they're paid as close to payday as possible, then budget for how to spend the rest. 

I'd suggest setting out a budget using a SOA calculator - don't forget to put something towards the long term savings... emergencies happen. 

annetheman

dmnsr94 said:

I've recently started a new job and want to rent my own place, but I just need a sanity check on how affordable this will be.

I don't drive, and will pay £50 for a monthly bus pass. Does this sound like a reasonable amount to pay on my income? 

I think that's a bit tight but it's up to you, and your lifestyle etc. It helps to think about the percentage proportion of your pay that you need to commit to rent and bills.

I'd say keeping your rent/bills to 40% or less and you will feel pretty comfortable. Anything above 45% is going to feel like a squeeze.


E.g. I was previously taking home just over £2100, paying £675 rent (in Hertfordshire, it's a minor miracle) and I was comfortable but not rich living the high life. Remember the bills on top ~ £900 per month so just over 40% of my pay.

I'm on more now £3098 take home, but I'm in the middle of purchase via Shared Ownership, which when including the rent and service charge, will cost ~£400 more per month. I will also soon be paying out more for things like house insurance, life insurance etc.

So technically I'm earning way more but paying out more so percentage of my outgoing on mortgage/bills will still be about 40%. 

Therefore, I won't really expect to "feel" any better off - but look at the bigger picture, mortgage/building equity > rent.

JustJane101

Excel is your friend here!!!

My takehome pay is around £1850 per month, and my (rough) Outgoings if my mortgage gets accepted will be:

£520 mortgage

£100 Electric (No gas to the property)

£90 Council Tax

£25 TV Licence

£26 Broadband and phone

£15 Home / Contents insurance

£5 Life insurance

£39 Car insurance

£100 Fuel

£100 Food

£80 Credit Commitments (Max)

£300 Savings

That's a rough figure of £1400 - So I think your well in the affordability if your budgeting skills are good. If you're getting takeaways every weekend, on the other hand probably not