To think we could live in London on £55k?

[Londonline1]

DH has been offered a job in London on a salary of around £55k. I'm mainly a SAHM; I do some pt work from home earning around 4k a year or so, but we're about to have baby #2 and I've no idea if I'll get back into it / if the work will have dried up etc.

We currently live in the North East and survive comfortably on an income of around £50k (including my earnings and CB). We have a fairly modest lifestyle and put most of our money into our mortgages which we were hoping to pay off early - we don't do holidays other than to visit family elsewhere in the UK; we live in a small house in a cheap area, and we have a flat we rent out in another city (income from that adds towards paying off the mortgage so it's effectively building up a savings pot but I haven't included that in the £50k above).

My question is whether we could realistically relocate to London with a £55k budget. Would expect to have to downsize and rent. Would prefer not a crazy commute for DH (to Battersea). Don't need to live anywhere fancy, but would like to feel safe and have some green space nearby for kids.

Please feel free to tell me it's ludicrous. I genuinely have no idea.

You might be able to live on it, but it wouldn’t be a very nice life

Not comfortably. The pay increase doesn’t sound anywhere near enough to justify the move.

A £5k increase in salary when moving from NE to London will in no way cover the increase in the cost of living. You could live on £55k in london (or Surrey and commute to Battersea) but it will not be the standard of living you are used to.

There would likely be job opportunities for you there too, but childcare for two DC will cost loads in London/commuterbelt.

I wouldn't. I did London on £45k by myself and it wasn't good. I made ends meet but I wish I hadn't.

I agree with the others. I think the big issue is that to rent a house in zone3/4 easy commute to Battersea would cost much more than 50% of your take home. So you are looking at a rented flat with two kids.

Thank you, this is helpful so far. It's an increase of around £10k from what he's earning now, but I'm guestimating an overall increase of just £5k by factoring in a possible loss / reduction of my earnings and CB.

So possibly doable but maybe a bit grim...? Does anyone feel able to elaborate about the sort of lifestyle that could be realistic? We certainly don't expect to be near to as comfortable as we are now. I guess we are trying to calculate the 'cost' vs the benefit as career wise it would seem to be a good move.

Oh cross post @RicStar - that's super helpful.

I think it depends where you live, living in zones 4/5/6 would be less rent, but more on travelling costs.
As others have said it would be possible, but would probably be quite a significant lifestyle change from what you’re used to.

You would be spending all the money you currently spend on your mortgage, and more, on rent, and that would be money gone - it wouldn't add to your equity, which would be important if you decided to move away from London in the future to somewhere where you could buy.

You'd be living in a smaller house. Much smaller if you wanted to "feel safe" and have green space.

So what are the positives?

Schools might be better, and employment prospects would be better for your children - but who knows what'll happen in the next 15 years or so?

I would not make the move unless I was clear that the positives outweighed the negatives - for the whole family, not just for DH.

It will be tight, you need to factor in loosing some child benefits, huge rents/house prices and generally higher costs for some things though some things like council tax are cheaper. A lot depends upon whether you would like urban living in such a busy place, and whether it's permanent, and how easy it would be to return if it doesn't work out. We factored in costs when we considered it a few years back and we needed an extra £20k net to break even ( we didn't move)

Even £10k increase isn’t much.

Perhaps look up housing, transport and childcare costs in places commutable to Battersea. The main issue is likely to be quality and stability of rental accommodation, and what proportion of your household income it eats up.

If you want to stay near London until DC are school age and want a popular school, housing costs will be even higher.

Won’t that increase put him in a higher tax bracket?

Have you thought about living in Surrey/Hampshire and he commutes?

You need to look at the cost of housing, whether you will be renting or buying. And consider the transport costs, and time for the commute, as this will effect the quality of life.

Start off by looking at Rightmove for theoretical properties. The hardest bit of living in London was finding reasonable house prices in the catchment of good state schools.

You can make it work but you'll be living hand to mouth or commuting far with that salary alone and a 2nd child on the way. I think a household take home of £65k minimum is what you need for a nice life in London with some serious budgeting skills.

Unless you have other significant reasons to move to London or can make savings elsewhere (I.e. family providing childcare for free) , the offer's not a good one.

Just that Battersea is less than an hour's commute from where I live and I could quite easily survive relatively comfortably here on £55k. Even with commuting costs.

I think you would be mad to do this.
Renting is dead money and would likely cost more than your current mortgage.
The wage increase isn't enough to offset the Increased costs

The cheapest 2 bed flats on Rightmove in Battersea are £1500pcm. How much would you have left to live on after that?

How much equity do you have in both places? Would it be feasible to sell up and put down a substantial deposit on a place in London? Mortgage rates are still low, and this would be cheaper than renting, would give you more security, and (for better or worse) would connect you to the London housing market.

Just to be clear, when you say you currently have £50k coming in including child benefit, do you mean £50k net?

I only ask because (obviously) salary is taxed and CB isn't so just trying to get a handle on what the £55k would actually be - £55k net being very different to £55k gross, clearly.

I think it would be fine in London at £55k net but very tight at £55k gross - small house in a not great area, etc.

To be honest, there's no way I'd be moving to London for a 10% increase unless there was a very clear and certain path to something much more lucrative which depended on the move happening.

You need to look at the difference in take home, he'll lose quite a bit extra in tax and student loans if relevant. If he pays into a pension, you might keep most of your CB.

Then compare with how much extra the rent will be over your mortgage, but if you've been overpaying a mortgage on the house that you live in, that will be extra money you have available, as you won't have a mortgage to overpay.

Obviously consider how transport costs change. If you won't have cars, that's a lot of extra money to put towards commuting, public transport, the odd taxi or hire car.

Other bills, food extra will probably be much the same. People always say that London has lots of free things to do, so you might spend less day to day if you do the free things not paid activities.

Nope. We didn't have much of a life on 60k so moved out of London. Both DH and I would 100% never ever return either!

Have a look at properties in Sidcup and around, properties cheaper there and easy commute into London.