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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

To ask about London and money

306 replies

Maisy313 · 09/10/2015 20:33

How much do you think you need to earn as a working couple to support a family of four (one year old and reception aged child) in London and have a reasonable standard of living? Would just be really interested in your thoughts... Someone told me it was impossibly to survive on less than a joint income of 100k in London which seems exceptionally high to me...

OP posts:
Mintyy · 10/10/2015 14:25

Ah well you would indeed be unusual then, if the first property you buy has to be a nice family home with a garden in a nice area of London. I can't think of anyone I know who has been able to do that! Not even in the halcyon days of the 90s.

Good luck with it all.

Artandco · 10/10/2015 14:29

Minty - a one bed flat in Hammersmith is now around £375-400k, a 2 bed £450-550k. Even with £100k deposit they couldn't afford a £400k mortgage on a £75k income. Especially as they would need full time and part time childcare at least ontop of mortgage payments each month

Our rent for 1 bed flat is almost £2k a month. Full time childcare was £1400 a month per child. So rent £2k, childcare £2k, means you need at least £4k cleared a month just for house and childcare. Obviously bills and food ontop. £75k gross would be less than they need

The only way would be if only one parent worked at hospital, and the other worked from home in evenings and cared for children in the day, hence no childcare needed and could live further out as only one commute fees and there for the early/ late childcare needed

Want2bSupermum · 10/10/2015 14:38

cactus you still have not answered the question about your mortgage.

Also when I lived in London I covered the Japanese market or the american market. I lived in shepherds bush, officially brook green but I was very close to the green so don't consider it as such. I had to be at work for 5:30am and on days I covered the american market I finished at 11:45pm at the earliest. The night buses only ran once an hour so it was either take a taxi or run home. So yeah there were days, when my employer wasn't paying for the taxi, that I ran home from Liverpool street to shepherds bush. There was no way I could afford a taxi of £60-70 on my salary back then of £35k a year. As soon as the head of the trading floor heard I was running to shepherds bush or to the office in the morning he gave me blanket approval to expense the cost of a taxi. He was apologetic and told me that my salary was based on a 8-4 workday so any extra costs of my commute would be met by them.

If you have a higher income job you are normally working many more hours and a commute of over an hour makes a huge difference. DH and I refuse to have commutes of over an hour. I don't think it's unreasonable in the least to have that as priority on your list.

Want2bSupermum · 10/10/2015 14:44

cactus with 2 kids under 5 what do you do for childcare. I'm genuinely interested because friends who are doctors have twins and are paying just over £35k a year in childcare. They have an income of £120k a year and live hand to mouth. I just sent them shoes for their kids as I know they can't afford new and I got a fab deal here.

Mintyy · 10/10/2015 14:48

Sorry, I got sidetracked.

legalegret · 10/10/2015 14:57

We are west London and only just moved into a 'family' home (rented) at over 4K per month. Raised DS1 to 18 months in a small flat. Fine but not what I had envisaged as my son's start in life when I was studying for my big professional job! It's the deposit and stamp duty that is the hurdle. We will realistically be another 2 years saving for those outlays to buy a 4 bed in our neighbourhood (probably 300k all in on top of savings), and by that time am I really going to want to take on a mortgage for that amount in my early 40s that won't be paid off before retirement? I say this because it helps demonstrate how salary levels are almost entirely irrelevant in London to ability to buy a house. Maybe at the starter flat level it still matters, but the tiny 1 bed a few doors down from me just went for £575k. That flat should be for a young professional getting on the ladder, but would require a salary over 150k.

CactusAnnie · 10/10/2015 15:02

This reply has been deleted

Message withdrawn at poster's request.

Chippednailvarnish · 10/10/2015 15:34

The hours you worked - 5.30am to 11.45pm - are completely outside of the norm, you must recognise that there is almost no one in the world who works those hours with any regularity

Except there are. I can guarantee that my DH and his colleagues do and I have done. I don't know of anyone who is working part time or full time who isn't using paid childcare for at least some of the week.
I live in zone five which used to be affordable on an average salary, but now isn't. Just because I was lucky to buy here when the prices were reasonable doesn't give me the right to make ignorant statements like "People seem to expect to live in the lap of luxury in a huge property in the centre of London"

People are struggling to afford London whilst living in tiny expensive flats. A mortgage of £1,000 a month means that you have clearly had huge benefits from the price increases, most young people won't have this luxury. Shame you can't see it.

CactusAnnie · 10/10/2015 15:43

This reply has been deleted

Message withdrawn at poster's request.

Runningupthathill82 · 10/10/2015 16:13

"A comfortable standard of living to me is having a family home, with a garden, in a nice area, where each child has a bedroom and each adult has

ChocolateWombat · 10/10/2015 16:42

People do have such different ideas of what an acceptable or comfortable standard of living is.
For some it needs to be a 'family' house with a garden in a good area and with good schools and money spare for holidays abroad and a new car every three years. People who bought in London 15+ years ago might achieve that on incomes of less than £100k which were considered quite standard, mostly because their mortgages are now relatively small, so those outgoings are small and because if they bought back then, their children are probably not of a a ge to be in full time childcare.
Those looking to start in London now won't achieve that same standard of living, in terms of family houses unless they have somehow got a big deposit or earn loads.
So most families who are starting up on the property ladder for the first time in London don't have that standard of living...it is flats, and managing workloads and hours to minimise the amount of childcare needed - quite different....but becoming the norm for an increasing number. Being in a flat with children sharing bedrooms is no longer seen as odd or a sign of poverty, because more and more people ar doing it....and are quite happy with it. They might like a garden, but life can still be good without one.

London is unusual. In other areas, even those in commutable distance to London, 2 decent salaries of around £60-70k in total will be enough for the house, rather than flat. And because most of us probably grew up in houses rather than flats, it is one of the reasons why people still feel having a flat with children is somehow a poor option or failure to provide properly.....times have changed and it is perfectly the norm now.

People living in London are right that they can feel not especially well-off,with earnings of £100k due to the cost of housing etc. They might not have loads left after costs of living......but they should still recognise, that this in itself doesn't make them poor - with earning of that level,they are certainly still in the top 5% of incomes in the country and recognising that fact,regardless of whether they feel rich or not is important. It shows a total lack of empathy for others and the choices (or lack of choices) others on lower incomes have,to fail to recognise it, or to say that the only acceptable standard of living is one of a family house, with a garden and private education and holidays abroad, in London,mor anywhere as a matter if fact.

Because the OPs sister has a deposit of £100k, the figures upthread suggest that the income of 75k is likely to be enough to get them a flat in London or a house outside of the M25, especially if they can bear an interest only mortgage until the childcare costs end. So it IS doable, if they can tolerate living in to flat or having longish commutes. And that is what loads and loads of people are doing now - having a flat or a longer commute. It might also be doable down to about £60k, but much below that.....to buy, to travel to work and to pay childcare might not be possible...of course if one of those requirements such as travel costs or childcare costs can be reduced or got rid of, lower incomes still might manage.

We could say the Ops sister is 'lucky'. She has a deposit of £100k which many with young families won't have, because they have never owned before and haven't been able to save much. They also have a family income of 75k and 'only' 1 child needing childcare. Many others of a similar age with 2 children wouldn't be able to take the London job because they would need to put 2 children into childcare and haven't got a deposit sufficient to get a mortgage big enough or to service it monthly. It is those who have even more limited choices.

vulgarbunting · 10/10/2015 16:59

Put perfectly Chocolate.

But sad to hear you think I don't empathise. I really do. We are well aware that we are incredibly lucky to have what we have. And that we could lose it in an instant (constant threat of redundancy in my sector at the moment makes this even more real.)

All I wanted to highlight is that the op's sister's standard of living is likely to change from what she is used to, and to be aware of just how much it costs to buy here. My friends and family are appalled at the rent I pay and the London house prices.

ChocolateWombat · 10/10/2015 17:01

Vulgar , my comments were general, rather than to you or anyone specifically.

fredfredgeorgejnrsnr · 10/10/2015 17:24

Vulgarbunting do you have high debts from elsewhere, or are saving an awful lot for a pensiob? We have that in London on 2/3rds of your income. We choose not to earn more for enjoyable jobs too, so if we actually needed more money we could probably do it.

Lndnmummy · 10/10/2015 17:24

It so depends on what you consider doable. We live in a small flat in a lovely area in zone 2. One ds. Joint income of roughly 100k. Our nursery fees are £1.5k pcm and we live hand to mouth. I would not consider us comfortable and it is def not how I envisaged how I would live. Bit we made a choice that I would work part time. We can not afford more than one child. This sadens me enormously.

Chippednailvarnish · 10/10/2015 17:29

Hang in there Lnd it does get easier!

And cactus a £1k a month mortgage would have need a fair size deposit. Not everyone can do it.

Lndnmummy · 10/10/2015 17:34

Aww, thanks chipped x

newname12 · 10/10/2015 17:41

Apart from housing, what on earth do people spend these huge (to me) incomes on?

We have a monthly income of about 2k. Interest only mortgage means £400/month (rather than over 1.5k repayment), leaving us £1600 for bills, food etc. My latest budget leaves me about £200 spare for day to day coffee, trips, bus fare etc.

People tell me London is more expensive, but apart from housing I don't find it much different to other cities I've lived in. A coffee in a chain like starbucks is the same wherever you go.

Mintyy · 10/10/2015 19:23

That was my point newname.

We had a poster taking home £6,000 to £7,000 per month, no children, and rent of £1350.00 complaining that she lives a "basic" life in London. I mean Hmm.

Runningupthathill82 · 10/10/2015 19:31

YY Minty. Is it class A drugs? Michelin-starred restaurants? Twice-weekly trips to the opera? I'd love to know...
(Household income of £1,600 take home per month here, so I have no means to access any of the above)

Want2bSupermum · 10/10/2015 19:50

An interest only mortgage isn't sustainable. If that is what is enabling london to be affordable for you then that isn't sustainable. Also not to save anything is not sustainable.

As for London having the same prices in places like Starbucks, I think the issue is that many things are more expensive. A cup of coffee isn't even an option when you are dropping ££££ on housing and childcare.

cactus for three months of the year I work 9am -3am. It's really hard on me and my family. For those months it isn't a viable option for me to bring in home made lunch. Also a commute of over an hour kills me. My regular hours are 9am-7pm. If I don't look after myself during my regular hours I'm dead going into crunch time.

Mintyy · 10/10/2015 19:52

God, your job sounds terrible Supermum.

newname12 · 10/10/2015 20:00

Why isn't it sustainable supermum?

What do you suggest I do? It is what it is.

How is an interest only mortgage any different from renting? Is renting not sustainable for those who rent?

I'm fairly sure there are many people, all over the country, who can't or don't save.

For me, a job like yours isn't sustainable.

CurlyBlueberry · 10/10/2015 20:01

I haven't read the WHOLE thread, just skimmed it. Bit Shock at some comments. We own a house in sw London, 3 beds, garden, zone 3. Have a repayment mortgage. Earn £36k between us, for two adults, a 2.5 year old and a 1 yo. We're currently living off savings as childcare is extortionate (we saved up before we had the kids, having done the sums) but we're doing ok and will be breaking even once DS is 3, then making enough money to save some once DD is 2 (fees get cheaper). Excellent local schools so we don't have to worry about private. I feel like we live pretty comfortably. I'd be over the moon with £100k a year!

Admittedly we did get some parental help to buy our house, but we could have stayed in our 3-bed flat (which we bought ourselves) instead. Things would be tighter money-wise but doable.

Want2bSupermum · 10/10/2015 20:08

I'm an auditor working for big4 and I audit SEC clients so our deadlines are awful. I'm not the only one working these hours. Dh is the one earning big bucks and his day normally starts with a flight departing at 6am. That means he has to be at the airport for 5am and he doesn't come home until 5:30pm. If doing a daytrip he is sometimes home until 8pm.

There are plenty of people working more than 12 hours a day in professional roles whose salary looks good until you look at the detail. My hourly rate when I first started worked out to be lower than minimum wage. With working these hours on a long term basis cutting back on your commute becomes a priority.