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.

The move doesn't make sense to me as you would be paying rent, and the pay increase wouldn't cover that plus loss of child benefit, so you be worse off and have a higher cost of living.

Not a chance. You will be just making ends meet and that would be with a commute for your DH. I would expect you would see him less as well due to the commute. Don't do it.

Its doable depending on two things:

Your housing costs- renting or buying/ how big a mortgage?
Childcare costs: assuming you have none if a SAHM

I manage it fine, living in zone 4 with 1 DC but a very small mortgage- 1 holiday a year, the odd home improvement. Im happy.

Assuming DH pays into a pension you will have about £3k a month to live on.

Rent and council tax for a two bed flat in a nice area will cost about £2k.

So you will have about £1k left for commute costs, food, car, utilities, everything else. How much do you have for this now?

You will have to factor in commuting. Battersea is not cheap.
It can be done but you would need to be sure that the job is worth it. If it is likely to lead to a further promotion/pay rise in a year or two it is doable.

If you already have a property in London then it’s doable particularly if you bought years ago. The problem is paying today’s rents, they are too high & make the move not worth it.

If you are going to do it then rent out your property in the NE so you can go back if you need.
People do live in London on less but sometimes this is helped by social housing, sometimes it is just tough.

I presume you will be getting rental income from both properties which will cover some of the rent?

£55k in London is about £3k per month. Your housing costs (just the rent/mortgage part of it) is likely to take up 2/3 of that. Travel costs in London for your dh is likely to be £100 (ish) more per month. Bills between £100-200 pm (utilities, c tax etc).

That doesn't leave very much, imo.

I also would consider £55k in London to be a pay cut from £45k in the NE. Not a pay rise. Worth using this to push for more money from the new employer?

The counter to that is I think there are way, way more career opportunities in London and I found it fairly easy to go from £50k per year to £100k per year over a period of about 5 years. So that's worth factoring in. But then I was single and able to focus all my energy and time etc on my career. I perhaps was also in the right place at the right time. That also helped a lot.

I think it’s doable but you’d be surviving, not thriving. IE just about making ends meet with not a lot left over. London can be expensive with many random costs, eg congestion charges.

Do you have friends in London or? I love London and wouldn’t live elsewhere, but the majority of my friends live here so it’s a different atmosphere for me than it would be if I had no one

I wouldnt. DH and I were on £80k combined, living in a small mid terrace zone 4/5 spending most of our money on mortgage and bills. It was a struggle to save. We've moved out and our standard of living is much better.

I think you'll struggle on that salary alone. Could you go back to work?

Could you sell & buy? Maybe after you do a trial of 6 months (unsure of DC age).

If you look at my road (not too far from Battersea) there are households on 60k but because they got on the ladder yrs ago have £600 mortgages & with one partner at home/very part time/ close family minimal childcare costs. Then you have others on 100k plus household incomes but paying 3k plus in childcare & mortgage/rent.

What does it mean in terms of career advancement and your earning potential? Can it be considered an investment?

Is that before or after tax? Either way I’d imagine it’s gonna be pretty tight. London rent is ludicrously high. Where I live you could live very comfortably on that, but not in London.

You could look at Epsom and Croydon which are on the train line to Battersea. Croydon property is relatively cheap for its proximity to central London, it’s about 30 mins to Battersea Park, Epsom is about an hour.

I agree with PP - it would be very, very tight and would be a significant downgrade in lifestyle. Sample costs for a 2 bed flat within reasonable distance of Battersea:

Rent and council tax: £2,000+ (and this budget would probably not stretch to a flat with outdoor space)
Bills: £200+
Travel (assuming travel card for DH plus maybe a bus pass and the odd tube trip for you): £200

That leaves around £600 for everything beyond the bare minimum (food, clothes, insurance, car, any entertainment, any activities for the children etc). If you decide to go back to work at any point you are looking at £1,200 minimum per child for full-time childcare, so would need an additional £2,500 or so per month for both children.

Unless DH (or you, if you decided to return to work) has significantly better earning potential within the next few years if he stays in London - by which I mean, he could expect to be on £100k+ within a few years - I think it would effectively be a pay cut rather that a pay rise.

What’s the value of your current house + flat?

Could you sell both to fund buying a house in Croydon/Surrey?

£55k gross is around £3100 after tax/NI and a reasonable pension contribution.

Like with anywhere you need to just do sums - shove everything on a spreadsheet.

I suspect it would be tight and not ‘easy’.

We have!take home of £4700 ish and whilst we’re ‘fine’ we can’t build up savings etc although this will change once baby is out of childcare.

The difference is not worth the upheaval. You will be in a rented flat in London's hot summer missing the sea air and freshness of Newcastle. The buzz quickly wears off when you can't afford to do anything and getting to the free parks is awful with a buggy on the bus and impossible on the tube. You are likely both to need at least that salary to buy anything, and twice the salaries to buy something akin to what you might get in the NE.

Croydon property is relatively cheap for its proximity to central London

But state primary schools in Croydon? There are very good state schools in the sidcup/chislehurst/orpington and even Bromley area. But that would be a fairly long commute for OP.

How about Purley area if you want a decent commute? Though I know nothing about the schools.

Purley schools are pretty good to be fair. In the Purley/ Old Coulsdon area there are 3 schools in the top 10 of Croydon.

I live in Zone 4 OP . Madly a station down the road is Zone 3 .

If you don't mind paying a return ticket of £9.50 per day to go just 3 station stops then do it . Its not cheap even here in Zone 4 Zone 1 or 2 , forget it . Not being unkind in my wording , its just the truth,

You want to be careful where you live. If he's working in battersea and you look for somewhere on that Trainline then fares will be lower as you won't have a London terminus.

If you look where I am which would be 25 minutes I to Clapham junction / battersea park then a 2 bed house is around 1200-1300 I think.

I think it would be very tight though.

The biggest expenses in London are housing and transport. Have a look on Right Move and see what you can get for your money in the area you want to live or look a bit farther out to find something cheaper then work out how much a season ticket will cost you every year. If you genuinely have no idea then I think you are in for a shock when you see property prices. It's hard to know what your budget will be without knowing what your current house is worth and what type of property you see yourself living in. Sidcup has been mentioned - I know nothing whatsoever about Sicup, but a quick google throws up This Property for instance, near the station. A season ticket into London Bridge costs £1,828 a year. I'm guessing you'd also probably still need a car in Sidcup.

I think it would be manageable were it not for the fact that you're looking at paying for childcare??

London is what London is - you cut your coat according to your cloth (or whatever the expression is)