
London Rents Eating Up 57% of Twentysomethings’ Income - randomname2
https://www.bloomberg.com/news/articles/2016-06-13/london-rents-eating-up-57-of-twentysomethings-income-chart
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lordnacho
And an annual season train pass into London can be £3-5K. Not cheap either, in
fact several months' rent.

I do wonder whether people feel trapped. You get paid a lot working in the
City, but you have to spend a lot, too. You can try your luck elsewhere, but
it's hard to think of where exactly, and you know for a fact there's this huge
network that's the big city.

~~~
madaxe_again
I got the hell out of London ten years ago, moved to the south West, started a
web development company.

We're now 40 people and we're struggling to hire developers fast enough - we
mopped up the local talent, and we're now hiring EU nationals mostly, as while
we offer a relocation package etc., the cost of living here is a fraction of
London - but folks coming from London usually want a London salary - and
aren't willing to negotiate. So they stay in London and moan about their rent
trap, while most of our employees now own their homes.

Shrug. Inertia's a bitch.

~~~
intoverflow2
> now own their homes

Most londoners don't consider that a plus if it's in the middle of nowhere
with no culture or anything to do.

~~~
madaxe_again
And most Londoners consider Bristol to be the middle of nowhere. I rest my
case.

~~~
stuaxo
Would like to move to Bristol, but doesn’t seem to be enough contracting work
doing python to sustain a career.

------
pmlnr
Solution:

people: get the hell out of there.

companies: make more remote job positions.

~~~
simonswords82
I think remote job positions are the way forward. However, I think we're going
to need an entire generation of management to get out of the way before BigCos
in the city start to take this approach mainstream.

~~~
jon-wood
Startups are somewhat more open to remote workers, but even then I've had to
be in the office anywhere from twice a week to twice a month. My aim at some
point is to completely remove the commute from my life, but at this rate I'm
going to have to start my own company to do so.

------
Shivetya
Well going solo is always more expensive so I am not really surprised or
dismayed. The rapid rise is an issue but usually can be traced back to some
over zealous restriction on what can be built and where.

Cities have expensive housing because those who own housing either want to
keep their property values up or don't want a different class of people near
them. They also tend to be very good at communicating the need by
misrepresenting the reasons, hide behind protecting historic area, quality of
life, environment, and such.

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dazbradbury
Caveat: I'm the OpenRent Founder.

I would dispute the research slightly, not only is CountryWide data probably
not the best out there (they'll deal with higher end vs. _huge_ non-"high
street agent" market), but grouping all of London together will be massively
skewed by the unbelievably high rental values in prime central london.

That's not to say London isn't expensive, and a big chunk of income goes
towards it, but in terms of the actual percentages - I'd take it with a pinch
of salt.

Most referencing companies will look for 2.5x rent -> gross salary. So if you
earn 30k annual salary, you can afford 1k per month on rent. If you look at:

[https://listentotaxman.com/30000?plan=0](https://listentotaxman.com/30000?plan=0)

You'll be taking home roughly £1,950. So that's roughly 50% of take home going
on rent (54% if you're repaying student loans). Anything higher than that, and
a referencing company won't pass you - so it seems odd CountryWide are
suggesting their _average_ is 57%.

~~~
UVB-76
I should think the vast majority of twenty-somethings in London on £30k+
salaries are repaying student loans, so you'll be taking the 54% figure.

~~~
dazbradbury
Of course - but I'm taking the _top-end / maximum_ eligible rent, whereas the
article is talking about averages, which are unlikely to be accurate in
relation to what the majority of people are paying as a % of disposable.

~~~
UVB-76
You are assuming, of course, that landlords stick to conservative
affordability limits and turn down willing tenants who fail the test, even by
a small margin.

I agree this dataset is not ideal for these sort of calculations, but the
figures are supported by my anecdotal experience.

~~~
dazbradbury
I am not assuming - we reference more tenants than any other rental company in
the UK and know how a reference decision impacts a tenancy going ahead (it has
a _massive_ impact). We also know how many landlords order references (again,
nearly all).

I kind of wish the data presented was more thorough, but that's probably
because I'm too close to the industry - the headline is certainly catchy, and
the comparison over time certainly more interesting, I just wanted give a
heads up about the actual % figure not being representative.

------
andy_ppp
It's only going to get worse, everything new built in London (very very small
studios/1 bed flats) cost about £600k+ in the area I live in. Property
developers are laughing.

~~~
TheOtherHobbes
Not for long. There's a glut at the very high end >£1m and prices are already
dropping fast. This will only get worse when the foreign money dumps all its
empty "investments" on the market.

The high end >£600k will follow.

I'd guess prices in the cheaper brackets will remain stable unless there's a
big rate rise, because they're kept inflated by buy-to-let.

But landlords with big mortgages are in a precarious position after the tax
changes, and it won't take much for them to start losing money.

The rental income on a typical BTL with an 80% mortgage used to be just £2k a
year, now it's less than half that. Mortgage relief is dropping already, so
expect to see some changes.

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Swizec
Sounds about right.

Hello from San Francisco.

~~~
ekianjo
But if your salary is huge the 43 percent left could be very significant.
Thats why you need both absolute AND relative metrics.

------
chillydawg
Probably the only good reason for anyone to vote to leave the EU is to reduce
demand on housing stock.

~~~
matrizao
true, but that will probably decrease wages too

~~~
deviate_X
The aim of BREXIT is to reduce immigration.

_IF_ that truly happens (and i seriously doubt that the "Borrises" are
actually genuine about this) then local-uk wages will increase especially for
skilled labour. Low wage producer's will simply be replaced by foreign
imports, increasing the deficit unless of course the UK engages in a
protectionist war with EU and EVERYONE else... (which it won't do).

~~~
ZenoArrow
> "The aim of BREXIT is to reduce immigration."

That's not the only aim.

The EU isn't truly democratic. The central body of power in the EU is the
European Commission, and they're not democratically elected. The European
Commission is the only group in the EU with the power to propose new
legislation, no members of the European Parliament can do so.

I'll be voting to leave purely because I believe in democracy. I want elected
representatives to have the power to represent the public, instead of being
employed provide a veneer of respectability to a deeply flawed institution. I
certainly won't be doing so over immigration as I believe immigration provides
a net benefit to the UK.

~~~
DanBC
> I'll be voting to leave purely because I believe in democracy.

Without looking them up are you able to name all your local councillors?

~~~
throwaway049
I can't, but I did get a vote to pick them. I don't think your question speaks
to the issue of the European commission being unelected.

~~~
DanBC
It might not be the case for HN readers, but a lot of people who complain
about the undemocratic nature of EU never vote in local elections.

Being interested in democracy means using your vote (or making a decision to
abstain). Not bothering to vote is incompatible with the declared interest in
democracy.

~~~
UVB-76
> Being interested in democracy means using your vote (or making a decision to
> abstain). Not bothering to vote is incompatible with the declared interest
> in democracy.

That's a strawman.

Plenty of people are not _interested_ in all or part of a democratic system,
but appreciate that it exists, and that it provides channels through which
they can influence the way they are governed, if they deem it necessary.

