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.

It’s 6.9 x DH salary!

Having a comfortable life with 2 kids on £55k in a half decent area is impossible. You’ll also need to be earning. In London SAHM is for the very rich or people on benefits.

@fancynancyclancy agree especially when childcare costs are added in.

As I posted upthread I think it’s highly unlikely any lender will lend 380k on an income of 55k.

I know, but until they apply they won’t know for sure.

She’d have a 25% deposit. It’s not like she’s after a 90%er.

In London SAHM is for the very rich or people on benefits

I live in London
I'm a sahm to school age dc
We're not rich
We're not on benefits

A 25% deposit is pretty standard & why many people find themselves paying more in rent then they would in mortgage because they can’t save up the required deposit.

I think if you want to be borrowing 6 x your salary you probably need a 50% deposit.

Even if they find this unicorn lender would you want to commit to such a hefty mortgage. It’s not like they are going to have copious amounts of disposable income to save in case of a job loss etc.

Someone posted coating up thread and quotes in 1400 rent which left £660 for food etc.

A mortgage of £1538 would leave even less circa £500.

I do think it’s highly unlikely that a £380k mortgage is a possibility

i would not want to try living on £550 a month which needs to cover food with two kids.

In London SAHM is for the very rich or people on benefits

Unless you bought yrs ago/have loads of equity/ low mortgage etc.

Some posters are not comparing like for like. I mean I could use my mum as an example, she lives on quite a bit less than 55k a yr & holidays every other month. The trick is she is mortgage free & her children have left home. Also she bought her 1.9m home for 80k.

25% is standard now, before the financial crisis 10% was quite normal.

In London a 380k mortgage is not ‘hefty’.

Someone posted coating up thread and quotes in 1400 rent which left £660 for food etc.

And someone else quoted 1600 rent for a 2 bed flat.

500 a month interest only is far less than they would be paying in rent.

In London a 380k mortgage is not ‘hefty’ When it’s more than 6 x your salary it is!

25% is standard now, before the financial crisis 10% was quite normal.

OP is buying today though & lending is now tighter so no point in looking back to a decade ago.

London property is very expensive. 5x salary mortgages are not uncommon as lenders have relaxed since the crisis. They tend to use affordability tests rather than simply salary multiples. But 6x might be pushing it, it’s true.

When our mortgage was 2 x DH's salary when ds was born 95 and I gave up work. We were very very stretched that year. I guess interest rates were higher.

I live in London
I'm a sahm to school age dc
We're not rich
We're not on benefits

Correct me if I am wrong but aren’t you also a Londoner born and bred? If you haven’t moved very recently (in the last year or two) then I really think you would be surprised at how sharply property prices/rent prices have risen. (And I generally mean actual London, not a ‘London Borough with a Kent/Surrey/Essex etc postcode’)
It truly shocked me. I genuinely think people coming into the Capital right now, will have it hard without equity, certain benefits, inheritance or amazing salaries or relocation allowances.

Our first property purchased in 2009 was a one bed flat in Chingford bought for 125,000k. Around £520 a month mortgage.

Our second property was a 3 bed terrace in Woodford bought for 320,000k in 2013 and sold in 2016. Around £800 a month mortgage.

I used to live in South Woodford. Yes, it has an E postcode but is also one road away from Essex so very far out and therefore much cheaper as a result (as your post confirms). A world away from Battersea as in the OP and hence the replies (and a very long journey on the Central line!)

And I generally mean actual London, not a ‘London Borough with a Kent/Surrey/Essex etc postcode’

I have an actual London postcode thanks

And I generally mean actual London, not a ‘London Borough with a Kent/Surrey/Essex etc postcode’

What like Richmond?

I have an actual London postcode thanks

You missed my point though. Unless you have bought in the last year then you really are lucky not to be stung by the current massively high prices and therefore more likely to be able to manage on a figure like the OPs. We’re talking properties going up by a hundred grand or two in that short space of time alone. It’s crazy.

OP I will be interested to know what you decide, if you get a chance to update

for me it's not about the amount, it's about the comparison. I guess those of us who can't wait to get out of London are a bit baffled by someone wanting to get in, knowing they will sacrifice a nicer life.

Prices have gone up dramatically in East and SE London since 2013 it’s true.

We were extremely fortunate to buy our 4 bed terrace in SE18 in 2013 on first time buyers budget - we got in at just the right time. House has gone up approx. £200k since then.

Hmmmm.

So reading the posts it's a mix of you can (from people who do it) and I couldn't and chose not too (from people similarly positioned).

I think there are three questions you need to ask yourself:

1. What is the true impact on DHs career prospects? Will it significantly enhance / could he get a better paid job off of the back of it in a year or two? PP are right, this is a pay cut in relative terms.

1. What do you want as a family ? Are you up for an adventure/ something different for the next few years? We have three DCs under 5 and the opportunities in London (the brilliant play parks, museums, free classes, swimming pools) are amazing (especially compared to friends who live more rurally). You can do loads for free.

1. What are you like with budgeting ? As much as there is to do in London for free. It's also very easy to be tempted to spend beyond your limits. Most people are on budgets, so you wouldn't be alone. But we have a friend (who is rubbish with money) who did very similar to you and moved to London for DHs job on a similar salary. They constantly over spent and we're both stressed by it and still paying off debt years later.

Don't sell your house in the NE. Hopefully you can rent and that will pay your mortgage. You don't know what you'll want to do in a few years and the housing market is really off right now