Single earner with 2 kids living in London on top-1 percentile income here. 60% of that monthly income is going towards rent, taxes and utilities for a terrace in Zone 4, plus nursery charges for our toddler. My wife can't find a job here, as she's an ex-journalist, and not a native speaker. No tax allowances (due to £100k+/y income) and no recurse to public funds (I'm on Visa, and not an EU citizen) doesn't help either. Apparently, I supposed to be rich enough for London to be taxable on 50% of my income (effective tax rate: 41%).
Thought of buying a 2bd flat recently, but it'll take us two years of struggling for every extra penny to just get a mortgage for a very moderate £250k place.
Income means nothing in this city. Either you got your housing issue settled 15 years ago using 'right to buy' or some other form of government housing subsidies, or you somehow generate wealth on a side (obviously, not through the salary, as even £200k/y doesn't seems to be close enough), or you are going to rent until you loose your source of income (i.e. due to old age) - and then you'd probably die on a street.
An economy of landlords drawing the money from their own kids. In a few decades all that accumulated wealth will be probably burned away on anti-cancer treatments, and then heavily taxed and rented younger generation will just quit on trying to build a welfare state, throwing their lives away only to provide a comfort living for older people. Hope our grand-kids will be at least able to start from blank.
I'm on the same boat. When people know my salary they think I'm rich, but the truth is that I can't save much more than I did when I was living in Holland making ~40% less.
Now I have a baby and the wife can't really have a career because a nursery would cost more than she can reasonably expect to make as a designer at this stage.
The 200k/year requirement feeds into the incomes discussion in other ways. Take today's scandal of Malcolm Rifkind, complaining that £67k is "not enough to live on".
Rifkind earns £67,000 as an MP, a further £14,876 as chair of the ISC and received £270,868 in directorships and consultancies between January 2014 and January 2015. (Guardian)
Rifkind's party instituted the "bedroom tax", taking ~£25/week off many people who were living on benefits and who have now been pushed below the breadline, resulting in a number of suicides and deaths of disabled people due to malnutrition.
One one level, MPs are perhaps not paid enough to not need outside payment. On another, we're constantly told that "austerity" is so necessary that we must withdraw the tiny amount of money that is keeping many people alive.
I understand that is a possible option, but isn't the whole point of this that it's not feasible to live in the city? Being forced further out to commute is kind of the point.
It's maddening that property owners can vote against new construction, when they have a deep conflict of interest. The community may require housing, but the homeowner has an interest in seeing housing prices go up forever.
It's similar to this ridiculous notion that expensive housing is a good thing. We give absurd tax breaks to homeowners (why can't I deduct the lost interest on my rent?), and people lament falling house prices, as though homelessness were desirable.
Couple all that with building codes that make it illegal to build modest (small with no parking) housing, and you have a situation where it's impossible for most people to live in a city.
The above issues don't apply everywhere. London, thankfully, isn't dumb enough to go for parking minimums, and doesn't offer a tax deduction on mortgage interest. The general forces at play (landed incumbents voting to screw over the young) are much the same, though.
What? London is full of new housing under construction. Many of the flats will be tiny as well. The problem (for those trying to live in the city) is that the houses will be hugely expensive.
For London in particular, the problem is that there are too many people who want to own a house there. That's why the prices are high. You can't call the place underdeveloped, it's not a lack of supply due to regulations.
If you want the prices to be lower, you need to reduce the demand.
It's a matter of perspective. On the one hand you're right that it's sheer demand that is a big part of the problem in London. On the other hand it is obvious that everywhere in the UK has serious restriction of supply, because house building has been less than half of what's necessary for many decades, house prices are spiralling, and median house price to income ratios are double now what they were 15 years ago (again, that applies to all parts of the country, even unfashionable places far away from the capital [1]).
Obviously there's the issue with green belts, but even beyond that there's massive potential for increasing the housing density of outer London. Both because of its current low density, and because a lot of the existing housing stock is made up of grey suburban estates which would be more or less unmourned if redeveloped. Look up 'densification' for more information.
Also, of course, it is important to try to reduce demand by making the Northern cities an alternative centre of gravity (HS2, HS3, new local powers for unified city mayors in Manchester and Birmingham, and so on).
As I understand it, the problem is that new construction is outstripped by increasing demand. Hence the increasing prices. I read an article in The Economist's recent suburbs/cities issue where they said a lot of the problem lies in how people are prevented from developing the green belt.
The lack of reasonable property tax is a big part of pushing valuations into the stratosphere. Look at the outrage over the "mansion tax", for example, which would only apply to million-pound homes.
Apparently socialist New York has a 1.8% property tax? Edit: Austin, Texas has 3% property tax! If you tried that in the UK you'd be denounced as a Communist.
I also left London recently, although I moved due to the weather.
For every 29-year-old graphic designer who moves to Cambridge to buy a family home, there's a 22-year-old who's just started their career who's willing to live in a bedsit in Wood Green (as, coincidentally, I did at 17, trying to break in to the big city).
You're meant to get older, and move out of the city. Circle of (urban) life. Give it 50 years, and Reading will be a suburb of London, rather than just a commuter town, CrossRail will have priced out current residents near the stations, and the city will keep trundling on.
That you see yourself as being one of the "original" residents doesn't give you some inherent right to below-market-prices in property. That the same graphic designers and digital media folk who priced families out of Brick Lane are now feeling the same effects of the gentrification cycle they were part of is not meant to be a surprise.
I hear Peckham is the up-and-coming part of town at the moment, but there's no damn way I'd live there, just like I wouldn't have lived in Brixton or Isle of Dogs 15 years ago. But give it 15 years, and you won't be able to afford in Peckham, either...
I agree with the idea of the 'urban cycle'. New, young professionals are happy to share a small bedsit in a bad area if it means a high salary, but at some point in life you have to rebalance your quality of living.
That's a problem I have with London- the constant churn. Everyone is transient. Friends you make are leaving in a year or two, maybe to go abroad or to buy a house in the suburbs. Many, many of the people living here do not consider it a 'home' but a stepping stone towards their goals, and I think this contributes to a lack of community spirit and feeling of belonging. I never felt like a 'Londoner' because there never seemed to be such a thing. On the other hand, this vast diversity and anonymity is of course one of London's great strengths.
>You're meant to get older, and move out of the city.
This is the perspective of someone who moves into the city from their suburban and small town homes and families. They plan to make a lot of money, meet a partner and drink a lot, get married, get a dog, have a child, then move back to the suburbs in a senior position at a remote BigCo to a house that looks just like the one they grew up in.
Most people in the city were born there, live there all of their lives (or maybe switch cities), then die there. Those people are being displaced by what are ultimately temporary residents who can always go back home.
Are you surprised when you see older people who live in the city?
You can't get figures for how many were born outside of London very easily, but glancing at my Facebook feed for the first ten people I know who live in London, only one was born there (and he's from Enfield, which might as well be Scotland). This percentage feels about what I'd expect.
>That you see yourself as being one of the "original" residents doesn't give you some inherent right to below-market-prices in property.
It speaks volumes that you implicitly put the rights of Russian oligarchs and Arab oil barons to buy property (which they often leave empty) above those of the working and middle classes of London.
I'll come back to London when they start taxing the wealthy again. Until then I'll watch from afar as every last drip of culture and life is squeezed out of every community by rising property prices.
> It speaks volumes that you implicitly put the rights of
> Russian oligarchs and Arab oil barons to buy property
> (which they often leave empty) above those of the
> working and middle classes of London.
Sure. But if we'd been having this conversation 20 years ago, it'd have been the rights of the Yuppies above the East End families, and then 200 years ago, it would have been those wealthy landed gentry pushing out the good hard working Hugenots, and so on and so forth and you still don't seem to see the irony of bearded new media workers being priced out of the same market they were busy pricing others out of a decade ago.
I'm also curious about just how many Arab Oil Barons and Russian Oligarchs you think there are, as a percentage of an 8m person city? Because right now, blaming a handful of immigrants who are buying multimillion pound properties that almost no-one else can afford smacks of racism.
> It speaks volumes that you implicitly put the rights of Russian oligarchs and Arab oil barons to buy property (which they often leave empty) above those of the working and middle classes of London.
It's not about putting anyone's rights "above" anyone else's -- whoever is willing to pay the most gets the property, that's all there is to it.
I'm leaving London with my girlfriend in a week, to move to Edinburgh. Been here seven years, both on a good salary, yet we live in an impoverished area and would never be able to afford to buy a decent place to live even where we are now. Edinburgh offers us an objectively better standard of living in every measurable aspect except proximity to Europe. I won't miss London.
Moved to Edinburgh from Cambridge. It's brilliant; all the advantages of a large city - working public transport, lots of culture - in the space of a small compact city with a walkable core.
I lived in Edinburgh for eight years, it's a beautiful place and you'll love it there. If you're into beer, check out the Blue Blazer - it was my favourite bar.
I spent my childhood in London, moving overseas after graduation - not financially motivated. With two kids now I often entertain ideas of moving back, primarily because it really is an amazing city and because of the opportunities my children would have.
Unfortunately, even with the handsome salaries senior devs earn I cannot see how I could possibly pay rent and support children.
So I often wonder where all this money is coming from? If a salary many multiples the average would not cover living costs, who is pushing up prices? Who is buying these houses?
"even with the handsome salaries senior devs earn"
People working at Google etc think they're paid handsomely, but in reality in London they are paid a fraction compared to what you can get in the financial sector.
This article and the comments here talk about software developers and graphic designers, and the reality is there's a whole community above you earning much more. That's who's able to buy the houses.
Another factor is generational wealth. Most of my friends who own houses in London earn less than me but were given large amounts of money by their parents. When you have a 20-40% deposit the monthly mortgage payments become much more affordable.
That's what I suspect, but it's crazy. The average salary in London is £27k, a senior dev will earn 3x that (I'm guessing). And that's still barely enough to live comfortably.
I guess that's the point of the campaign in the linked article, but I can't see how that will change, unless the financial bubble bursts.
Interestingly I discovered that a former colleague of mine actually does this. He'd considered buying a property in London and managed to find a number of of houses in Murcia (Spain) which cost the same as his deposit in London would have been.
There is a slight twist which enables this international "commute" however. His job has involved being on-site in with a client (in Scotland) for the last while, so even if he lived in London he would've been put up in accomodation anyway. So in reality his Spain->UK\UK->Spain round trip only happens once a week, but technically he's still doing an international commute :)
The cost of living in London is insane and it is a really interesting thought experiment. A lot of my friends are moving out of the city and I can't see myself staying here more than another year or two.
But for some context, West Hampstead is a fairly nice suburb on three different train and tube lines.
The rent for a one-bed flat is high as they are bid up by couples who are both earning. You are at a big disadvantage looking on your own. In my experience there is not much difference between prices for a one or two bed flat.
I think a big problem is the price of national rail transport into London from the commuter belt. It can easily cost £4,000 a year for a season ticket, wiping out most of the saving on rent or mortgage payments compared to living in the city.
I commuted between London and Berlin for a decent amount of time, and I certainly remember having more money then compared to now when I live in London fulltime.
I have sort of a different experience. I just moved to London, from Dublin, a few months ago. I make a good, but not outrageous, salary: pretty close to a reported average for software developers in London.
I live in a somewhat rundown area, just outside zone 1. The rent is expensive, but not unmanageable. I have flatmates; the area feels safe; its close enough to bus and tube lines that getting around is simple. I live fairly frugally otherwise. I don't at all feel like I can't afford to live in the city, and I can't imagine having the access to the range and depth of culture and social events anywhere else.
Maybe it's that I don't have any interest in buying a home, but I feel like so much of this doesn't apply to me. Maybe it's also that I moved here from Dublin, another very expensive city, that I don't feel like it's so bad.
How old are you? You mention that you have flatmates, but not everybody wants to live in a shared apartment far into their thirties, especially if you would like to find a place for you and your partner. The problem is that housing in London looks like a commodity that big sharks trade like many other long-term investment commodities. Problem is, that's the places where people would actually like to live that you're trading like it was crude oil barrels. How is that even barely sustainable for a city in the long term? Not limiting that by rules of law is a big mistake, but no politicians would be ever called into account for that.
I'm late-twenties/early-thirties. I'm probably just on the old side to still be perfectly happy to rent a room in a shared apartment. If I find myself in a long-term relationship then I imagine my priorities will change, but part of the reason I moved to London was because I thought it would be easier to meet romantic prospects.
I completely agree that property prices in London are insane, and that the political system is doing nothing to reign it in (quite the opposite, from my point of view).
But, from what I've experienced, if you don't want to buy your own property, then it's perfectly possible to live in London without earning crazy hedge fund money.
It's completely possible to live in London. But imagine trying to stay here, like, for life. Starting family, raising kids, buying your own place. Not possible, on any income. You need wealth, and in London there's no way to build it for salaried professional.
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Thought of buying a 2bd flat recently, but it'll take us two years of struggling for every extra penny to just get a mortgage for a very moderate £250k place.
Income means nothing in this city. Either you got your housing issue settled 15 years ago using 'right to buy' or some other form of government housing subsidies, or you somehow generate wealth on a side (obviously, not through the salary, as even £200k/y doesn't seems to be close enough), or you are going to rent until you loose your source of income (i.e. due to old age) - and then you'd probably die on a street.
An economy of landlords drawing the money from their own kids. In a few decades all that accumulated wealth will be probably burned away on anti-cancer treatments, and then heavily taxed and rented younger generation will just quit on trying to build a welfare state, throwing their lives away only to provide a comfort living for older people. Hope our grand-kids will be at least able to start from blank.
Now I have a baby and the wife can't really have a career because a nursery would cost more than she can reasonably expect to make as a designer at this stage.
Rifkind earns £67,000 as an MP, a further £14,876 as chair of the ISC and received £270,868 in directorships and consultancies between January 2014 and January 2015. (Guardian)
Rifkind's party instituted the "bedroom tax", taking ~£25/week off many people who were living on benefits and who have now been pushed below the breadline, resulting in a number of suicides and deaths of disabled people due to malnutrition.
One one level, MPs are perhaps not paid enough to not need outside payment. On another, we're constantly told that "austerity" is so necessary that we must withdraw the tiny amount of money that is keeping many people alive.
With great typo comes great wisdom.
It's similar to this ridiculous notion that expensive housing is a good thing. We give absurd tax breaks to homeowners (why can't I deduct the lost interest on my rent?), and people lament falling house prices, as though homelessness were desirable.
Couple all that with building codes that make it illegal to build modest (small with no parking) housing, and you have a situation where it's impossible for most people to live in a city.
The above issues don't apply everywhere. London, thankfully, isn't dumb enough to go for parking minimums, and doesn't offer a tax deduction on mortgage interest. The general forces at play (landed incumbents voting to screw over the young) are much the same, though.
For London in particular, the problem is that there are too many people who want to own a house there. That's why the prices are high. You can't call the place underdeveloped, it's not a lack of supply due to regulations.
If you want the prices to be lower, you need to reduce the demand.
Obviously there's the issue with green belts, but even beyond that there's massive potential for increasing the housing density of outer London. Both because of its current low density, and because a lot of the existing housing stock is made up of grey suburban estates which would be more or less unmourned if redeveloped. Look up 'densification' for more information.
Also, of course, it is important to try to reduce demand by making the Northern cities an alternative centre of gravity (HS2, HS3, new local powers for unified city mayors in Manchester and Birmingham, and so on).
[1] - https://www.gov.uk/government/uploads/system/uploads/attachm...
It's full of empty housing too. This happens when people try to use housing as a means to store their unimaginable wealth.
> landed incumbents voting to screw over the young
That pesky "democracy" and "giving everybody a voice" getting in the way of what I want right now.
(oh, and a small nitpick: Homeowners don't have conflict of interest, they simply have a different interest which may conflict with yours)
Apparently some people are a fan of the type of democracy that limits voting rights to property owners.
Would you like to return to a time when blacks and women couldn't vote either?
Can people from outside of London who want to live there vote on those issues?
Apparently socialist New York has a 1.8% property tax? Edit: Austin, Texas has 3% property tax! If you tried that in the UK you'd be denounced as a Communist.
For every 29-year-old graphic designer who moves to Cambridge to buy a family home, there's a 22-year-old who's just started their career who's willing to live in a bedsit in Wood Green (as, coincidentally, I did at 17, trying to break in to the big city).
You're meant to get older, and move out of the city. Circle of (urban) life. Give it 50 years, and Reading will be a suburb of London, rather than just a commuter town, CrossRail will have priced out current residents near the stations, and the city will keep trundling on.
That you see yourself as being one of the "original" residents doesn't give you some inherent right to below-market-prices in property. That the same graphic designers and digital media folk who priced families out of Brick Lane are now feeling the same effects of the gentrification cycle they were part of is not meant to be a surprise.
I hear Peckham is the up-and-coming part of town at the moment, but there's no damn way I'd live there, just like I wouldn't have lived in Brixton or Isle of Dogs 15 years ago. But give it 15 years, and you won't be able to afford in Peckham, either...
That's a problem I have with London- the constant churn. Everyone is transient. Friends you make are leaving in a year or two, maybe to go abroad or to buy a house in the suburbs. Many, many of the people living here do not consider it a 'home' but a stepping stone towards their goals, and I think this contributes to a lack of community spirit and feeling of belonging. I never felt like a 'Londoner' because there never seemed to be such a thing. On the other hand, this vast diversity and anonymity is of course one of London's great strengths.
This is the perspective of someone who moves into the city from their suburban and small town homes and families. They plan to make a lot of money, meet a partner and drink a lot, get married, get a dog, have a child, then move back to the suburbs in a senior position at a remote BigCo to a house that looks just like the one they grew up in.
Most people in the city were born there, live there all of their lives (or maybe switch cities), then die there. Those people are being displaced by what are ultimately temporary residents who can always go back home.
Are you surprised when you see older people who live in the city?
You can't get figures for how many were born outside of London very easily, but glancing at my Facebook feed for the first ten people I know who live in London, only one was born there (and he's from Enfield, which might as well be Scotland). This percentage feels about what I'd expect.
It speaks volumes that you implicitly put the rights of Russian oligarchs and Arab oil barons to buy property (which they often leave empty) above those of the working and middle classes of London.
I'll come back to London when they start taxing the wealthy again. Until then I'll watch from afar as every last drip of culture and life is squeezed out of every community by rising property prices.
I'm also curious about just how many Arab Oil Barons and Russian Oligarchs you think there are, as a percentage of an 8m person city? Because right now, blaming a handful of immigrants who are buying multimillion pound properties that almost no-one else can afford smacks of racism.
It's not about putting anyone's rights "above" anyone else's -- whoever is willing to pay the most gets the property, that's all there is to it.
Genuinely curious.
Unfortunately, even with the handsome salaries senior devs earn I cannot see how I could possibly pay rent and support children.
So I often wonder where all this money is coming from? If a salary many multiples the average would not cover living costs, who is pushing up prices? Who is buying these houses?
People working at Google etc think they're paid handsomely, but in reality in London they are paid a fraction compared to what you can get in the financial sector.
This article and the comments here talk about software developers and graphic designers, and the reality is there's a whole community above you earning much more. That's who's able to buy the houses.
I guess that's the point of the campaign in the linked article, but I can't see how that will change, unless the financial bubble bursts.
Deleted Comment
b) Landlords, who rent the houses to people who can't afford to buy, but can afford rent
There is a slight twist which enables this international "commute" however. His job has involved being on-site in with a client (in Scotland) for the last while, so even if he lived in London he would've been put up in accomodation anyway. So in reality his Spain->UK\UK->Spain round trip only happens once a week, but technically he's still doing an international commute :)
edit: Tidied up the rambling sentences
But for some context, West Hampstead is a fairly nice suburb on three different train and tube lines.
The rent for a one-bed flat is high as they are bid up by couples who are both earning. You are at a big disadvantage looking on your own. In my experience there is not much difference between prices for a one or two bed flat.
I think a big problem is the price of national rail transport into London from the commuter belt. It can easily cost £4,000 a year for a season ticket, wiping out most of the saving on rent or mortgage payments compared to living in the city.
I live in a somewhat rundown area, just outside zone 1. The rent is expensive, but not unmanageable. I have flatmates; the area feels safe; its close enough to bus and tube lines that getting around is simple. I live fairly frugally otherwise. I don't at all feel like I can't afford to live in the city, and I can't imagine having the access to the range and depth of culture and social events anywhere else.
Maybe it's that I don't have any interest in buying a home, but I feel like so much of this doesn't apply to me. Maybe it's also that I moved here from Dublin, another very expensive city, that I don't feel like it's so bad.
I completely agree that property prices in London are insane, and that the political system is doing nothing to reign it in (quite the opposite, from my point of view).
But, from what I've experienced, if you don't want to buy your own property, then it's perfectly possible to live in London without earning crazy hedge fund money.
It's a good place to spend one's youth though.