Poor people being priced out

[veggifriedbreakfast]

I live in East London and need to move, I currently rent a 2 bedroom flat. But, looking around now, for a 2 bedroom the minimal is £1400 a month up to £2000 for a 2 bed!!!

It seems to me that what is happening is that actually poor people are being priced out of London. I lived in Stratford and had to move out of there due to the market going up and now where I am again it's happening. How can people on lesser incomes afford this? I am now looking to having to uproot ds again and move even further out because of this. Aibu in thinking that this is a part of forcing the poorer people out of London?

Give over LoveinTokyo,

Someone on a salary of £45,000 PA takes home £2,831.74 PCM.

Now even when you take into account student loans and possible pension payments this would still give them a disposable income of over £1k after all the bills on that flat in Walthamstow and significantly more on this one

www.rightmove.co.uk/property-to-rent/find.html?locationIdentifier=REGION%5E85310&sortType=1&index=24

I'm all for understanding people when the cost of living is high, and it is, but someone on that level of income can afford far better than a house share.

Yeah its called marriage before babies, aka birth control.

What the fuck are you on about?

Apart from the very obviously error in your ridiculously naive thinking, marriage before babies dot not equate to birth control.

topcat1980 - yes I know positive discrimination already occurs for businesses but not nearly enough to make it REALLY attractive. Because if it did, then this wouldn't be so much of a problem would it? Simple really. the government has to do more. It would have to be radical - no business rates for 10 years if you relocate. Not messing about with a few quid here and there.

landing tax on freight coming into London - huge and prohibitive. Goods would still be imported but would come into other airports.

you seem to be very good at knocking down other peoples arguments whilst making no meaningful suggestions of your own.

If you want to tackle this problem then the solution has to be big bold and radical. not the same old tinkering at the edges crap.

ban second home ownership in seaside towns.
Ban buy to let mortgages
Stop housing benefit altogether - completely across the country.

But you see, no single political party is going to do this is it. Because in the period where housing benefit stops and rents go down and become more tied to wages and more affordable and wages go up, millions are going to struggle.

so all parties of whatever colour, nibble away at it and don't affect any real change.

I favour a radical solution but recognise that there will be people for whom there is massive hardship in the short term. how do we get over that? I am struggling to come up with a solution but only radical action will sort this out.

Someone said they spent half their salaries on childcare and rent. In 1984 we paid half on the childcare alone even before the mortgage kicked in!

I do notice a lot of people who want the highest quality areas actually on the thread. we live in zone 5, people get stabbed etc. It is all we could afford in 1984 and all now. it's fine - you just live with it and commute in like most people. Also rents are currently falling in London hence my link to the Queen's Park pretty nice area with the reduced rent flat earlier on the thread - 2 bed £1250 a month.

My son's house (3 bed terraced very end of a tube line cost £325k about a year ago - not cheap but not impossible if you do what we, my parents and their parents did - buy before you have children, put off babies, have two full time salaries)

So BarbaraofSeville has actually put their finger on it.

Are there lots of flats in London for £250k? In areas that are not shithole?

Its not that there are no affordable flats in London. its that everyone wants to live in the naice areas and the flats there aren't affordable.

so move into the shithole and make it better?

Does your "disposable income of £1,000 per month" take into account any regular savings?

If not, I think you'll find that they will want to be paying a shitload more than the minimum into a pension in the hope that when they eventually retire they will have enough of an income to be able to continue to pay rent for the rest of their life. Because if they can't save a substantial amount each month then, barring a massive inheritance somewhere down the line, they have no hope of ever owning their own home.

Someone on £45k is earning nearly twice the average salary. They shouldn't really be the kind of people who are priced out of owning a home within commuting distance of where they work. (Incidentally, does your £1,000 per month take into account commuting costs?) They also shouldn't be worrying about being able to save enough for retirement, or about whether they'll ever pay off their student loan.

But they are.

"Someone on £50k could get a mortgage of £225k, so they could buy at around £250k if they have a £25k deposit, which of course would be piss easy to save while they were paying London rents."

It has always been significantly harder to buy as a single person in London.

A couple earning the London average salary of £34,473 could get a mortgage of £310257 with a 4.5 x ratio.

Can have these, in Highams Park

www.rightmove.co.uk/property-for-sale/property-65763784.html
www.rightmove.co.uk/property-for-sale/property-54707424.html

Or quite a lot of property in the less "desireable" areas for significantly cheaper than that.

But then as I said, people turn up their noses at having to compromise.

Part of the problem has been stagnation of wages in lots of jobs (not all - two lawyers in London can buy the house today we bought in 1984 - small 3 bed terraced zone 5 which today costs about £420k). I remember in London in 1984 the school had to offer teachers a flat where we started married life as that was the only way people could afford to live particularly teachers moving down from the North and at one point the wages from the teaching were about the same after tax as what we paid for childcare but then teachers got a pay rise so he carried on working. Wages have stayed low because of state support via tax credits and in London a vcery stead increase of workers every year. I am a Remainer who is pro immigration but we have certainly had in the UK about 240,000 more people coming last year than left which it is hard to argue does not put a strain on house prices and rents and housing in the places with jobs. Now house prices are dropping, landlords often now pay tax on profit they don't make (interest is not set off against rent in the way it was) and extra 3% stamp duty when buying, annual tax on properties held in companies (ATED) etc etc hence current falling prices but wages aren't going up much so that doesn't help a lot so far.

"Someone on £45k is earning nearly twice the average salary."

Not in London.

"They shouldn't really be the kind of people who are priced out of owning a home within commuting distance of where they work. "

As shown above, they aren't.

"They also shouldn't be worrying about being able to save enough for retirement, or about whether they'll ever pay off their student loan.

But they are."

Someone living in shared accommodation on 45k a year should be able to make significant savings.

However, buying as a single person in London has been a significant challenge since the 80s and what people have had to do is to move into areas that are not as desirable.

People I know well bought in Walthamstow in the early 2000s and told others it was up and coming, everyone laughed and said they lived at the end of the earth, and continued to rent in Stokey and Islington.

They aren't laughing now.

I don't think you should automatically have the right to live somewhere because you grew up there. London is a finite space. Yes we can cram more people and houses in, but not endlessly.

What about the people who DON'T want to stay living where they grew up, because there's no good jobs, no niche industries, inferior public transport, not enough theatres, not enough variety of jobs, or any of the other myriad of reasons people move to London? Why should they never be able to have that opportunity because the market rent is artificially held lower for people who have always had the opportunities London has to offer?

Lowering rent in London will make it more attractive, thereby attracting more people to London, thereby driving prices up. Market rent isn't high because landlords are greedy, it's high because people are willing to pay it rather than move out of London.

@gardengeek

If only I had had that sort of understanding when I was younger. I did it all ‘right’, got married, saved a deposit for a house but it was never enough and we never had the right ‘credit rating’. Divorce screwed me over and I’ve moved to the coast now and am forever chasing the property ladder. Rents rise so fast I’ll be a grandma and will inherit a house before I buy one now

I am now advising my friends to consider strongly investing and buying outside of London, and then using the rent to pay the mortgage and subsidide your London rent. This way you can build equity and still live in London. Lots are starting to see what I am saying.

I asked a mortgage broker about this three years ago and he said it would be extremely difficult (or perhaps impossible) to get a BTL mortgage if I wasn't already a homeowner.

My son's house (3 bed terraced very end of a tube line cost £325k about a year ago - not cheap but not impossible if you do what we, my parents and their parents did - buy before you have children, put off babies, have two full time salaries)

Again, like many comments above, I'm afraid this is naive.

I don't know how old you are, but my parents were able to buy before having children because they bought in their early twenties. (In fact, my dad bought his first house at 24 on a single salary and he and my mum sold it before they turned 30 because they felt it was too small to have two children in. The same house is currently on the market for £600,000 and a season ticket into London from that town costs over £4,000.) The problem young people have now is that they're having to scrimp and save for so long to get on the property ladder that by the time they can afford to get on the property ladder with a starter home, they're at the age when they want to be having children, and the starter home that would have done for their parents isn't really big enough. They can only afford to buy a starter home when their parents at the same age might have moved on to their second or even third home with more space for their growing family.

It might be taking people ten years longer to get on the property ladder than their parents did, but women aren't fertile for ten years longer than their mothers were.

"Does your "disposable income of £1,000 per month" take into account any regular savings? "

I was pointing out that your friends could live in a two bed flat quite comfortably, rather than having to live in shared accommodation.

In fact I was quite generous with the amount they would have to pay in bills and added £300 to the rent, so maybe they could actually have a bit more.

People I know well bought in Walthamstow in the early 2000s and told others it was up and coming, everyone laughed and said they lived at the end of the earth, and continued to rent in Stokey and Islington.

Uh huh.

And now people are being priced out of Walthamstow and no one normal lives in "Stokey and Islington".

Where does it stop?

This issue has been a long time in the making.
The Conservatives introduced the Assured Shorthand Tenancy in 1988.
Labour did absolutely nothing to reverse the damage.
Owning property has been deliberately turned into an investment and nobody cares because so many have "benefitted" from the resulting house price inflation.
Now a whole generation have been priced out and people are tutting that their grown up children will never be able to own their own property (but at the same time moaning about how the government are attacking buy to let landlords, who after all are "just providing a service").
It's such a shambolic mess.
And why are the government still propping up prices with help-to-buy and ultra low interest rates?
Makes my blood boil

Move to Highams Park?

Or further out, like has ALWAYS happened?

Yes but there comes a point when it is no longer doable.

Especially once you have children. Are you really going to commute for two hours each way AND pay for your season ticket AND stick your children in childcare for an extra four hours a day? (If you can even find a childcare setting that is open for those kinds of hours.)

Also, "move to Highams Park" is not an answer to the question "where does it stop?"

But you're kind of proving my point for me with that response.

Lots of people have to move away from where there parents live/lived in order to have a decent standard of life. It's not limited to 'poor' people.

I had the opposite. I grew up in a poor area (Stoke on Trent), I had to move to the South East for a decent career, there's not many opportunities in Stoke.

That's life isn't it?

Yes, it's a pain. I hate being so far away from my DM who I'm close to, I hate that my own DC won't have the chance to build a close relationship with her and childcare will be difficult plus when she gets older we'll need to think about moving her in with us down here but...that's how the world works and it was the better decision overall.

Living in a rural area, I do so love the advice of buy a 2 bed cottage in said rural area and rent it on Airbnb.

really? that moves the problem down the road doesn't it because now the young person in that rural area who wants to live near their family just the same as people in London want to live near theirs cant afford a cottage in the village because Londoners have bought them up to rent as holiday homes!

so I guess as long as all the people in London get to live exactly where they want on low rents then the rest of us can go hang.

some people living and working in London should try doing this in a rural area with no transport, no wifi, no shops, no culture, no entertainment AND being priced out of the residential market.

Its not even a case of finding a less desirable area because the cost of transport is your car.

rural poverty is a huge issue, yet no one speaks about that because just so long as Londoners get to whinge they don't actually care about the rest of us.

Any situation that precludes people purely on the basis of not being able to afford it is inherently wrong.

Hilarious.