
UK survey: 40% of respondents pay more than 50% of their incomes on rent - temp
https://www.nationalrentersalliance.co.uk/news/affordability/renters-uk-spend-average-62-per-cent-incomes-rent/
======
dogma1138
Probably even more if you count the commute cost. If you commute to London you
can expect yearly ticket costs to be easily £5000 (that is if you can afford
to buy a 12 month pass, if you do not you can pay as much as double, train
pass loans are very common in the U.K.) for even a relatively short commute
(Oxford or Luton to London for example). £5000 is 1/4-1/5th of the median
salary in the U.K.

If there is anything more depressing than U.K. rent it's its seasonal ticket
rates:

[http://vt.nationalrail.co.uk/service/seasonticket/search](http://vt.nationalrail.co.uk/service/seasonticket/search)

~~~
djmobley
Larger employers typically offer season ticket loans, repaid pre-tax through a
salary sacrifice arrangement, so you can effectively discount the cost by your
marginal tax rate.

Higher rate (40%) tax payers therefore only pay £3,000 for a £5,000 season
ticket (less if you include NI and other deductions)

~~~
isostatic
They aren't pre-tax, which is a major reason I work from home - when I took my
current job I refused to work in their office as it would be £2500 a year,
which means I'd have to earn about £6500 more just to pay for the commute, add
the extra 2 unpaid hours a day and the commute would mean I'd want an extra
£20k pre-tax (that's £100 post-tax per week for the time, or £10 an hour)

My effective marginal tax rate because of this (income between £50k and £60k)
is 60% -- 40% income, 2% NI, 18% reduction in child benefits. The company has
to pay employer NI too. That means for every £1138 they spend on a payrise for
me, I get £400.

While my income is in the top 10%, our household income is pretty average for
people with 2 children because my wife only works on occasional freelancing
projects to keep fingers in the pie (say 10 days a year), and I work from home
the majority of the time - we don't want to outsource the upbringing of
children. If we do pay for child minding, it's an inlaw, which means petrol
costs and a bottle of wine - which all comes out post-tax, so doubles in price
compared to sending kids to a factory tax free (or "childcare").

------
mckoss
Take the report with a grain of salt. It appears to be sourced by an
investment firm with an interest in selling real estate securities. There are
no details given about how their sample of 10,000 renters was created; the
data also seems self reported by the renters, so I would have accuracy
concerns.

The figure seems dubious given most landlords would balk at extending a lease
to a tenant who's major share of income would be going to rent (high credit
risk).

~~~
dilemma
As opposed to media organizations with an interest in selling capturing and
selling reader attention. The implication that unbiased reporting exists is
ridiculous; this isn't critical thinking.

~~~
haukilup
> As opposed to media organizations with an interest in selling capturing and
> selling reader attention. The implication that unbiased reporting exists is
> ridiculous; this isn't critical thinking.

There's a jump required to get from the parents comment to yours.

Readers should still take the source with a grain of salt, like most sources.
It helps to consider what biases the article/report/whatever is likely to
have.

------
NiklasMort
The rent prices around the world in big cities are absolute perverse. And it
will only get worse I fear. Partially due to rich foreigners and partially due
to AirBNB & Co. Good example there is Prague, no normal Czech citizen can
afford to live there anymore, the rent prices are ridiculous even compared to
some German Cities.

~~~
oh_sigh
How can it be any other way more people than ever want to live in cities and
cities are Naturally constrained buy pre existing infrastructure and land
area? People just need to get used to the idea that they can only afford to
live in a second or third tier city.

~~~
NiklasMort
you'd be amazed how much rent prices are artificially inflated

------
ZenoArrow
I'm currently converting a van to a campervan, in part to escape this money
drain, in part to give me more freedom of where to live. It's not an option
for everyone but I'm glad it's been working out so far (I should point out
that wild camping is of dubious legality in many parts of the UK).

An alternate option is living on a boat (narrowboat, Dutch barge, etc...) on
the UK canals, which even with mooring fees can be more affordable than
renting.

~~~
DaiPlusPlus
I understand that if you live the canal-boat lifestyle you also don't have to
pay council tax.

~~~
slap
But you also have to move "forward" at least every 14 days if you don't want
have a mooring.

~~~
ZenoArrow
To give some idea of mooring costs, the marina in my home city charges around
£300 (a month, I believe, though it's not 100% clear) for mooring costs:

[https://bwml.co.uk/bath-marina/moorings/](https://bwml.co.uk/bath-
marina/moorings/)

The main challenge is getting a place, as moorings spots are fairly limited.

I have heard of people making alternative arrangements. For example, paying a
farmer whose land is next to a canal to moor there. Costs would most likely
lower but there's also likely to be less in the way of on-land facilities.

------
hanoz
> renters across the UK spend an average of 62 per cent of their income on
> rent

> 40 per cent of renters pay more than 50 per cent of their incomes on rent

If 60% of renters pay less than 50% of their income, that leaves an infeasibly
high number of renters paying at least 80% of their income, to make an average
of 62%.

Much as I think the high cost of housing and woeful tenancy rights are an
absolute disgrace in the UK, I can't take these figures at all seriously.

~~~
rwnspace
After some digging around gov.uk and looking for the back of an envelope,
median income seems to be around £24k, and median rent/mth differs wildly
between London (£1500) and the rest of England (~£750); can't seem to find a
recent source for median income (London) and median income (rest of England).

After tax I shouldn't suppose median income across the UK exceeds £20k. An
educated guess would suggest most people spend 40% of income on rent alone.
Given the decline in real wages I would imagine living costs in total soak as
high as 80% of after-tax income for many. No comment on the content of the
article itself since others have critiqued it so nicely - the above is mildly
informed speculation.

------
denzil_correa
I have been kind of struggling with this question lately. As a rule of thumb,
what percentage of your income would/should be spend on rent? I can totally
understand there are many variables but I'm assuming the cost of buying a new
house could be one on that list.

~~~
DaiPlusPlus
The rule of thumb is 1/4 of gross income before tax, 1/3rd of net income after
tax - reasoning that 25% of your income is lost to taxes.

Another approach is to take your salary, max out your pre-tax retirement
contributions, find out what dollar amount you need to maintain your current
lifestyle in non-accommodation costs, set aside at least a few hundred $
monthly buffer, then whatever's left will be your budget for housing.

~~~
closeparen
I've found it useful to consider transportation + housing in aggregate. It can
cost the same to have a centrally located apartment vs. a suburban apartment +
car. Also, your commute time and sanity (avoiding transit, avoiding rommmates)
may be worth some sacrifices to lifestyle/entertainment expenses.

------
wmonk
> Overall, 40 per cent of renters pay more than 50 per cent of their incomes
> on rent, the report found

This feels much more telling than the title of this article.

------
nugget
Couldn't this be a predictable result of deflation in other expense
categories, i.e. as "stuff" becomes cheaper consumers will just reallocate the
savings to competitive markets where demand outstrips supply (e.g. housing
near good jobs)?

------
throw2016
Something changed in the global economic system in the 1990's that has led to
asset inflation in nearly all major global cities.

People buying are indebted for decades for more than 50% of their usually dual
incomes and renters have equally large monthly outflows.

This is global economic rent seeking in action. Wealth is not used for
investment as economists insist but speculation and asset inflation led by
banks being the main beneficiaries. The consistency and pattern of sharp
increases across global cities cannot simply be a coincidence.

------
namelost
The green belts need to go. Cities should be allowed to expand outwards.

~~~
tim333
I like the green belts. There are other options - upwards in London or allow
more building outside of the belt. Personally I think tall residential
buildings in London could work quite well. In places like HCMC, and China they
are throwing up 30 story blocks like nobodies business - I think only planning
restrictions stop that here. I live in a 5 story block in London and think no
one would be much inconvenienced if it had 45 stories instead. Prince Charles
might moan but who cares.

~~~
ZenoArrow
Is the transport infrastructure of HCMC something you'd like to emulate too?

[http://static.thanhniennews.com/Uploaded/thuyhang/2016_01_06...](http://static.thanhniennews.com/Uploaded/thuyhang/2016_01_06/ket_xe_o_hcmc_HRJI.jpg)

You shouldn't invest increased housing density without an increased investment
in other types of infrastructure, including transport. Transport in London is
already uncomfortable at peak times. It could be argued that having more
people living in London would mean more people could walk / cycle to work,
reducing the strain on public transportation, but it's not a gamble I'd be
willing to make.

~~~
tim333
I was thinking of the new light rail and associated developments
[http://sggpnews.org.vn/hochiminhcity/first-metro-route-to-
co...](http://sggpnews.org.vn/hochiminhcity/first-metro-route-to-come-into-
operation-by-2020-59169.html)

The stuff you linked is what they got from low rise sprawl and roads.

~~~
ZenoArrow
Thanks for the link, good to see that the Vietnamese government is investing
in light rail for HCMC.

------
NikolaeVarius
Whats the breakdown between 1br/Studios and Roommate situations?

------
richliss
TL:DR - We're screwed - blame politicians on both sides.

This is only going to get worse because the politicians are beneficiaries.

One in three UK politicians are landlords:

[https://www.theguardian.com/housing-
network/2016/jan/14/mp-l...](https://www.theguardian.com/housing-
network/2016/jan/14/mp-landlords-number-risen-quarter-last-parliament-housing-
bill)

One in three UK politicians has a significant percentage of their wealth
dependent on rising house prices and rising rents which is why:

1\. Help to buy schemes increase demand but not supply therefore increasing
prices.

2\. Large scale bulk buying of properties by dirty offshore money where
apartments are not being rented out hasn't been stopped - its better to buy
London property than pay for gold storage:

[https://www.theguardian.com/society/2014/jan/31/inside-
londo...](https://www.theguardian.com/society/2014/jan/31/inside-london-
billionaires-row-derelict-mansions-hampstead)
[https://www.theguardian.com/society/2017/jun/13/foreign-
inve...](https://www.theguardian.com/society/2017/jun/13/foreign-investors-
snapping-up-london-homes-suitable-for-first-time-buyers)

3\. Train prices in London are the most expensive in the world, so many will
decide to spend more on rent and have the extra hours per day back than travel
and pay almost the same price once train costs are factored in:

[http://www.bbc.co.uk/news/uk-england-
london-39806865](http://www.bbc.co.uk/news/uk-england-london-39806865)

4\. Increased population growth into London due to political focus on the
South East - 100,000 extra per year increasing demand :

[http://www.dailymail.co.uk/news/article-3834825/London-s-
pop...](http://www.dailymail.co.uk/news/article-3834825/London-s-population-
growing-100-000-YEAR-immigration-high-birth-rate-turns-capital-megacity.html)

5\. Not enough homes are being built to satisfy a single year's needs let
alone the cumulative shortage:

[http://www.telegraph.co.uk/finance/property/news/12127141/Fe...](http://www.telegraph.co.uk/finance/property/news/12127141/Fewer-
homes-being-built-in-London-as-UK-house-building-falls-25pc-short-of-
target.html)

6\. One in six Baby Boomers (who are the generation that has caused the
property problem) intend on spending the inheritance their children could use
on a deposit or buying their home, and therefore may remain renting:

[http://www.dailymail.co.uk/news/article-3818803/The-baby-
boo...](http://www.dailymail.co.uk/news/article-3818803/The-baby-boomers-
spending-kids-inheritance-One-six-50-70-year-olds-say-plan-use-money-die.html)

The most depressing thing is that its starting elsewhere in the UK now because
people see the UK as a good place to invest, and its gone crazy in the best
cities in other English speaking countries - Sydney, Melbourne, Toronto etc.

~~~
isostatic
> 1\. Help to buy schemes increase demand but not supply therefore increasing
> prices.

The biggest obstacle to buying a house is the requirement for a 10%, or even
5% deposit. 5% on a £300k house is £15k, which takes many years of trying to
save while paying really high rents and seeing prices continue to increase.

Once you get that deposit, you'll be paying far less on the mortgage.

Many people buy using the 'bank of mum and dad' to get them out of the rent
trap, or by living with mum and dad while they save for a deposit. This serves
to increase wealth amongst the wealthy. Your daily mail link is blocked by my
firewall, but if baby boomers are spending their money, that would be a good
thing.

> Train prices in London are the most expensive in the world

And the most crowded. Any cheaper they'd be even _more_ crowded. That said, a
season ticket from Hastings is £448 a month, for 21 days of commuting on a 140
mile round trip, 15p/mile, not an unreasonable charge. From Tonbridge it's
18p/mile, reflecting the increased demand.

> The most depressing thing is that its starting elsewhere in the UK now
> because people see the UK as a good place to invest, and its gone crazy in
> the best cities in other English speaking countries - Sydney, Melbourne,
> Toronto etc.

Aukland's real estate prices was one of the factors that stopped us
emmigrating.

> 4\. Increased population growth into London due to political focus on the
> South East - 100,000 extra per year increasing demand :

The funny thing is many (not in London) people in the UK think 'immigration'
is terrible, but don't even consider internal migration in the UK.

