Why do people overstretch when it comes to renting?

[juntie]

Granted everyone needs a roof over their heads, I'm talking about those who are not struggling at the bread line or to have a home. I live in London where the average wage is a lot higher but also rents are higher too.

Regularly I overhear/get in conversations with people about renting. Some single people or even couples admit to spending 50% of their take home on rent when they could spend 25% and still have something nice. A junior colleague of mine earns 50k, so take home of about 3k a month. She spends £1,500 a month for a room in a brand new air con flat in Zone 1. Another colleague earns 50k and his partner earns the same amount, they spend £3k for a two bed. During the conversation we were having, they both mentioned they found it difficult to have enough money to fund eating out and travelling, let alone save for a deposit.

So I wonder, why do people spend way more than is necessary for rent? Especially those who are earning a decent amount

Because the alternatives are usually death traps and flatshares are shit.

Why do landlords charge so much rent ? There fixed it for you .

I mean,.for many people it's.their only way to get anywhere to.live.

Having said that, I did rent a tiny and fairly grotty studio flat for several years while i.saved up a house deposit,.and I could have easily afforded to rent a 2-3 bed house. And I am so glad I did that.

Are the overstretching? Doesn’t sound like they’re over stretching but more a ‘wanting everything’ wings. Sounds like they can afford it but then can’t do things that are ‘optional’, so choosing to live in nice places instead. I only lived in house shares before buying because I wanted to save and eat out.

Pretty much everyone could spend a bit less on housing if they wanted to but they value what the extra money buys them - a nicer area, a shorter commute, an extra bedroom so kids don't need to share or one can be a study.

Your colleague must know she can rent a room for £1000 but what does the extra £500 buy her? She prioritised that over other spending or saving I guess.

Most people when they get into their 30's don't want to share their home with strangers as they would have done during Uni or when they were younger.

Maybe they just want to have some private space or bring a date home without the awkwardness of housemates, and are sick of having to clean the bathroom after someone else, or put up with their food going missing etc.

I have some horror stories from flat sharing (and also made some good friends), but there comes a time in your life when you just want some privacy. Obviously it's worth it to them to pay more for the privilege.

£1.5k for a nice room in zone 1 with air con isn't actually that bad.

It's not a "choice" though. My son is currently looking for a studio flat to rent for his first graduate job in a different city. Competition is insane. Agents' viewing sessions are filling up within minutes of the property being listed. Viewing days are often the next day and by the third day, the landlord has decided which offer they're accepting. If you can't move that quickly (i.e. don't currently live in the area), then you're stuffed. You have no choice but to go after the more expensive ones that are less popular, in the hope that you can get a viewing a few days later which you can get to, but the landlord still decides the day after, when the viewers lodge their offers. That's why the crazily expensive ones still get rented - if someone is desperate to find a flat for work, then they'll have no choice but to stretch themselves.

I really don't think people understand just how bad the housing crisis has become. We were genuinely shocked when it came to our son looking for a studio/flat for work, moving to a different city. Holiday lets and student housing have really screwed the housing market in touristy/university cities.

Exactly my thoughts!

The rental market is nuts. I rent out a flat because I couldn't sell it for what I wanted and I had prospective tenants competing for it. My last tenant paid £1400 pcm and I've just had someone sign up for 3 years paying £1900.

Well you spend a lot of time in your house don't you, you may as well like it.

I wanted to ask the same question too. My sister in law doesn't rent in the uk but in a very expensive country (where buying is the norm and rentals are also insecure). She spends the equivalent of £1500 for a 120 sq meters 3 bed room flat. I know she does have a baby and a dog so probably needs more space than me. She thinks my 60 square meters 2 bed flat (which I own) is too small. I am not suggesting she rents a flat that is the same size as mine (though it is quite likely to have a child in my flat before I will be able to move onto a bigger 3 bed flat though it probably wouldn't be 100 square meters; i would rather own my own modest 2 bed flat and make do than rent a big place). But surely there is a middle ground.

Her household income is definitely less than me & DH: and overall cost of living (groceries and clothes) cost more in that country; tax rates are roughly equivalent.

Because stock is low and often people have no choice.
most renters I know are paying 75% of their income on renting not by choice but because it’s that or homelessness.

It's because they want more space ? A nicer location?

Maybe its because I'm Northern but I really wouldn't begrudge someone who was on £50k a year (or on any full time wage) a 1 bedroom flat near where they work. Our country is completely bonkers that someone renting a 1 bed flat on an above average income is considered excessive though. £1500 a month left over is doable especially as I assume no car or expensive commute if their in zone 1. Rent is bananas even up North with the cheapests 1 bed flats in my town (although a desirable commuter town) carrying a £800 price tag. House shares can be horrible and stressful too. If she has a nice place I don't blame her prioritising that. I imagine house buying is off the cards for alot of Londoners too so I can totally see a "fuck it, may aswell enjoy where I live" approach to housing.

There really needs to be strict rent controls put in place though now, housing should not be leveraged like a gold brick commodity.

rent controls wouldn't solve the issue which is lack of supply. The landlords would just increase rents accordingly to address that.

What is needed is social housing. The reality is that income and wealth are two entirely different things and the latter is much more useful when it comes to buying property! And 50k is not really a 'good income' in a London context and esp not for living in zone 1 (granted you could easily spend the same amount living in zone 3 if you account for commuting fares). I speak as someone who earns around that amount in London (but I do have a DH and we got our mortgage for a 2 bed flat in zone 3 mainly based on his income).

The liability with renting usually only stretches to 12 months, then you can leave, if you made a mistake.

You might overpay to try out a nice area, or a certain type of property relative to others. In the case of London new builds there is a certain element of paying a premium because your neighbours are overwhemlingly likely to be professionals, and the blocks have better security features and are closer to transport.

For instance a robbery might be quite likely in a ground-floor conversion. Not that likely on the 10th floor of a new build where you need a RFID pass to get through multiple sets of doors....

And if people don't buy the cheapest property in their budget why should renters be any different?

A mortgage is a long-term bet against interest rates, and that similar rates will continue to be available.

Looking at the papers it rather seems to me that more house buyers have overstretched relative to renters.

But property has made a lot of us financially dumb. Just read some of their stories.

Of course it wasn't long ago where borrowing as much as you could was a good thing.

Hell is other people....I would probably stretch the budget to rent a small flat rather then share with others too.

Their money/their choice I would have thought.

I suspect its because many people have borrowed against the value of their home to build an extension.

I laugh when I hear people are spending shock 25% of income on rent. As a single person renting a spare room on a full time wage was easily spending 70% of my wage. Take home 1500 rent 900. Would loved to spend £400 but would have had share a box room for that

In my experience a lot of people prioritise location. So they want to live in Islington for example and would never consider SE London even if they could get a whole flat there for the price of a room in a flatshare somewhere central.

Obviously it has its benefits if you go out a lot or want to be near work so the commute is 25 minutes and not an hour...

Most don't have much choice. My DS and his GF pay nearly £1500 for a studio flat in London. They can just about afford it between them, but it's not exactly living the high life.

Someone sounds foolish.

OP: have you actually looked at rents in London?

And the ferocious competition for getting a flat? The more so for cheaper priced, I would have thought?

And then … choice/ close to work / cheaper or no transport costs / not at mercy of rail, bus and tube strikes.

And what does ‘overstretched’ mean in renting terms anyway? It’s not the same as being trapped in a mortgage you can’t afford or having children you can’t feed and house. If you can’t afford it there are at least some options.

Or was your q just judgey-in-disguise?

A flat share is really not attractive to lots of people post student years.

So they choose to spend money to live differently.

That would be my choice, if I could afford it and get by.