to ask if I can afford to live in London long-term?

[Coastalwalks]

Hi all,

First time poster! I start with all the caveats about how I know I am relatively fortunate and have nothing to complain about, and hope that all advice given will reflect this.... hard hat on!

I am 28 and live in a rented flat with DP in London. We recently had to move because our previous landlords could no longer afford their mortgage payments due to the Truss 'mini-budget'. We are now paying the highest rent I've ever paid, and I'm really starting to chew over the feasibility of living here long-term.

For context, I used to work in professional services on a p good salary (£45-55k), so I had OK savings. Last year I was offered a training contract with a law firm, and am now studying the legal conversion course before I join the firm. I applied to a firm that offered interesting and varied seats over one that would pay an eye-watering salary. If I qualified in London I would likely do so in 3 or so years on around £75-80k.

I have lived in London for 10 or so years, since uni. All my friends live here, and there is loads I love about the city. I nearly bought a tiny flat a couple of years ago, but pulled out as their were subsidence problems. However with every year that passes housing just seems to get costlier and costlier - even with current mortgage rates.

I have had to dip into my savings to support myself whilst studying (the stipend from the firm just doesn't cover my rent and living expenses... the London rental market is mad...) meaning I have £20k left in an ISA, earmarked for a housing deposit. But the simple fact is that realistically that's not even 10% on a shoe-box in Catford. I find myself increasingly exasperated by the fact - with current house prices - you can't have a 'normal' lifestyle in London unless you have an abnormally good salary.

All of my friends who own their homes do so because their parents paid for them! And I just don't come from that kind of background.

AIBU to think that in order to have a 'normal' life (i.e. house and kids) DP and I should move to a different city? and if so, where?

Thanks !

75k x 4.5 (multiplier for mortgage) = £337,500

partners salary say £40k (you said less but haven’t said how much so just a rough example)
40 x 4.5 = £180,000

Mortgage = £517,500
Deposit = £20k
Looking at houses of £530k + which is a workable budget in London suburbs

It is doable, your main holdback is probably your deposit. You should try and keep saving up a bit of money as the above doesn’t factor in stamp duty etc.

My example is just to illustrate that on two good salaries buying a one/two bed flat in London is definitely feasible. It’s mostly just very unaffordable and hard on one salary.

Salaries are higher in London. How can you move if you are doing the conversion course and haven’t started training yet? You need to hang on in there and then reevaluate.

Thanks for all your responses again ladies.... all this said, I just find it absolutely bonkers that it is widely considered normal to spend the guts of half a million on a flat !!! I don't understand how you're meant to do that without parental help, if you're earning a regular salary, or if you're single. Long-term I really think this will be to the detriment of the capital as every city needs people on low / normal incomes to do the 'normal' jobs (admin, hospitality etc), and should they all have to spend their whole lives toiling away so they can pay £900 for a room in a house-share... really awful. And on a more self-interested note, I never even dreamed of living somewhere as 'naice' as say stoke newington, but equally think it's really mad that everyone of my generation has to fund the triple lock to keep the most asset-rich generation in knitted bed socks whilst we scramble around trying to pay over the odds for an ex local authority flat for an arm and a leg in Bellingham!

You are stuck on half million pound flats! £500k or so will get you a perfectly serviceable terraced house in the outer SE and E suburbs.

Also there is nothing wrong with Catford or Bellingham, don't be so snobby.

I own a 2 bed flat in London and it is worth nothing like half a million. But then it is (whisper it) near Catford.

@Ginmonkeyagain I would honestly LOVE to live in Catford! It has beautiful parks! I just can't believe that everything is so expensive. I know some people would say it's entitled, but I just wish that property wasn't so expensive.... sticks in my craw to think that if I am really lucky I will spend the bulk of my working life and salary on something that was comparatively so much cheaper for previous generations...

If you can afford a 2-bed flat you could rent out a bedroom while you train and until you get a high enough paid job to pay the mortgage without that extra income?

If you rent out a room in your own home, I think £7,500 of the rental income is tax free.

Rental prices are high and it's not easy to find places to rent, so chances are you could choose the tenant you like the most amongst the various applicants?

That qualification salary will go up quite a bit- if it’s £80k NQ it will be around £100k 3y PQE. You can definitely afford to live in London. It’s a head-fuck how expensive everything is- I think if you asked the average person what sort of house someone on £80-100k lives in they wouldn’t say a 2 bed flat in Catford- but it can be done.

I went to uni in London. Moved in with my boyfriend and we rented Z1/2 border. My starting salary was quite low (less that yours), and I seemed to go out all the time (a lot of house parties too though). Managed to buy a lovely flat in that area, sold up as broke up, but had made a bit on the flat as lived there for 5yrs. Now have a house in Z3, children, and it’s manageable. Just looking to upsize now. If you and your partner earn £70-80k each in the future it’s definitely doable, we bought this place when we were both on less than that. I love London, can’t see is moving out, there is too much here! Out of my core group of 10 friends, only 3 moved out. Have also made local friends.

There’s a lot of focus here on buying a 1-2 bed flat, which there’s nothing wrong with, of course, but you’re talking about staying in London long term and having kids etc, so unless you’re happy to squash in to a 2 bed flat forever, I do think you’d need a significantly higher salary.

The first place I bought was a 2 bed terrace in SE zone 5 back in 2009, which was £206k. That place sold for £450k last year. The next place I bought was in SE zone 3, a 2 bed flat at £380k in 2015. We had two kids in that flat (it sold this year for £425k) and we were completely priced out of the area in wanting to ‘upgrade’ - a 2 bed terrace was around £550k and 3 bed flat with garden around £600k. And that was in 2018.

I think for a decent family home in London, you’re looking at around £700-800k at today’s prices, which may be doable on your salaries, but you need a much heftier deposit and you’ll have a big mortgage. No shame here - I have a big mortgage myself! What things will be like in a few years, it’s anyone’s guess.

@Coastalwalks I am of an older generation - I went through exactly the same when buying first property ( ie where can we afford ) So - I sort of get your point but I wasn't handed a house on a plate. Went through 90s negative equity - now that was hard. I hope no young people have to go through that again.

Lots are already! Prices have fallen recently so if you bought at a high price fairly recently, then you might well be in negative equity.

It really is more difficult to buy now in London but as you cannot turn back the clock, you are where you are. Law salaries are high if you keep going. DD has many law friends and £150k isn’t uncommon very quickly but it’s seriously hard work. I’m rather sensing you resent not being given money by your parents. Many are not in a position to give. You move in circles where it’s normal. Unlike when I was young when it was rare. So all you can do is work and earn well when you get the chance to prove yourself.

You might find prices too high but my DDs both have Rent a Room tenants. Helps a great deal financially.

Erm Manc isnt cheap - looked at relocating there redently myself
Trickier public transport/ grid locked during rush hour on main roads

Catford is probably cheaper

I bought 1 bed Acton while on training contract with £20k deposit. Then upsized to a 4, then 6 bed. You can do the same (in Catford)

Relax your life will be great, start flat hunting now!

Thank you @nameChangerTummyTuck this is the most reassuring message of all ! I should really do my tort reading rather than freaking out on mumsnet lol

It will only get worse in the long term. If you can, and it sounds like you can, I’d commit to London for now and consider moving later once you’ve established your new career. Your salary will likely be much higher in London too. I say this as someone who bought (and struggled) in London (Zone 4) in 2010 on a low salary. My salary has increased a lot since then and getting on the ladder early enabled me to make my next move.

Op, I started out very well and it has all gone wrong as you put it so rightly.

Don't saddle yourself with a big mortgage. You never know what is around the corner!

I grew up in Catford and went to school in Lewisham and Eltham.

Small world isn't it.

I'm so impressed by you. Keep your well earned money in your own pocket.

Other than by living with parents, how does an adult keep their money in their own pocket? It’s impossible. Every adult in a partnership needs somewhere to live. It’s better to buy in the long run and there two salaries in this case. She’s not a single buyer. There’s a second salary.

If neither of you are from London and you aren't tied for work, I'd have to love the absolute bones off the place for itself to be willing to stay put, when the quality of life is going to be so much better in a northern city and you even have family there.

As DP is from the north west, Manchester and Liverpool are the obvious options. The legal sector in Manchester is bigger but you'll get more house for your money in Liverpool, so it's a difficult choice. Is she close to her family?

Generations that had no minimum wage so there were always people for whom property was unattainable. Don't forget the properties that older generations are in now are their finishing point, not their starting point. My parents generation mostly started in homes with no double glazing, no central heating and fairly often no inside loo. They didn't buy their cozy modern bungalows at the age of 23.

My central London wage after university in 1997 paid the grand total 12k per annum. Unsurprisingly I couldn't afford a big property or a 'nice' area but I had a lovely 1 bed flat in ....... Beautiful Bellingham, then a two bed ex-council terrace in Grove Park, then a three bed semi also in Grove Park. Then we left London for a bigger three bed semi in a small town which is probably our forever home.

Accommodation now is more expensive in real terms than it was for the preceding couple of generations. It just is.

@TrashedSofa As the Op is converting to law and has a training position to qualify as a solicitor, I don’t see how this job is portable right now. This company are spending a lot to train her so presumably expect some work in return. In London unless they have branches elsewhere.

Sorry for assuming the sex of your Dp, OP.

House prices in London are ridiculous, for sure. But you are going to be in the higher earner bracket and will have employer pension contributions (which a huge proportion of current pensioners never benefitted from until it was made law). So maybe don’t fall into the trap of blaming pensioners for your ‘hardship’ when many scrape by on frugal means.

If you do want to stay in London, you can buy a much cheaper 2-bed flat if you consider going slightly further out like West Norwood, Forest Hill, Sydenham, Lewisham (more like £350k). Or consider shared ownership just for a few years as it would then mean you'd have more money for a deposit.

OP is asking for advice about the longer term, ie after she qualifies. That's what I was responding to. The firm may well have a regional office yes, that's worth considering, but she may not actually want to stay with them once qualified anyway. Quite common for people to move.