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

Well, here's a way you can answer your question - go on Spareroom or Rightmove, put in the amount of money you currently pay for your rent/mortgage, and have a look at what it can get you.

" 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."

I live in SE London, rooms are £800-£1k a month, often not including bills.

Also, you don't have full free choice. The rental market now is completely different to 10-15 years ago. Then, you saw something you liked advertised, viewed it, did the checks and moved in. Now it's more akin to a job interview with lots of prospective tenants chasing one property, and letting agents introducing even more hoops to jump through and selecting their favourite. For example, it's common now to have a single viewing for all interested parties in the middle of the working day at the convenience of the agent. If you can't make it you won't get it.
This naturally means that people may miss out on cheaper properties and be forced to spend more than they'd like.My SIL's just been through it and it was bruta.l

Exactly! It's not rocket science, is it?

Yep, we've just been through it with our son moving to a small Northern city 3 hours away for his first job. It was indeed brutal.

Couldn't even get a viewing for the first 20-30 despite phoning them as soon as they appeared online as the few (typically less than 10) viewing slots had been taken within minutes. Completely pointless filling in online enquiry forms or giving your details to be put on their list. The agents admitted that they don't have time to do call backs etc as their phones ring off the hook as soon as they put a property up on the websites.

We managed to get a viewing slot (5 minutes - no choice of time nor day) - and yes, it was lunchtime. They don't allow you to go ahead without viewing it (we asked). The agent said 8 people had viewed it before us and all had asked to be put forward. He said they give the landlord a list of the people, their age(s), occupations, wages, pets/smokers/single (yes or no), and let the landlord decide. He also said the only way to improve your likelihood was to offer to pay in advance, either 3, 6 or 12 months which usually "swayed" the landlord in your favour, but he said 3 of the others had already offered that (though he wouldn't say for how long). We asked him if we could offer more than the asking rent, and he said he wasn't allowed to suggest it to viewers, but that, yes, it would help bump son up the "favoured" list. So in the end, we offered 12 months upfront and a 15% higher rent than advertised. Thankfully it was enough to pip the others and he got it!

All that for a simple/small one bedroomed flat, and it was still not close to the city - still on the outskirts with few local amenities.

As you say, it's brutal. I just don't know how anyone without the funds to pay in advance could get a flat to rent. We've continued to look on the listings websites since and they're still showing as fully booked for viewing within about 15-20 minutes of going live. It's absolutely insane.

Is being asked to pay up front now replacing guarantors? Because when we were last looking it seemed to be common even if you were both in professional jobs with salaries that could easily cover the rent - we were really worried about being asked to provide a guarantor given we were both in our 30s with parents that were retired, especially given that they haven't been responsible for funding our cost of living for a long long time!

I can't think that many people can just produce £15k or so to cover a year's worth of rent, it's another way to exclude people who are starting out in their lives and/or are unable to rely on help from friends and family.