No, seriously: renting a 2 bedroom flat in a not brilliant suburb of London costs around £25,000 a year, or US $40,000. Then you can add council tax (another £2000), water, electricity, and gas bills, and travel. Upshot: the fixed costs of living in London are on the order of US $50,000 per year (two beds) or around $40,000 per year (one bed). Note that I focus on the two bed option because that's the practical minimum for a family unit, or for someone who telecommutes from home. Note also that the average gross income in London is a little under £28,000 per year (before tax).
Upshot: normal people and normal families can't afford to rent in London any more. The only thing propping up these insane prices is the scarcity induced by the current bubble in the foreign investment housing market. The crash, when it comes, is going to be epic.
I mean, you can match those Barcelona prices in nice market towns a short train ride from central London (probably a similar door to door time to many parts of central London to commuting from West Hampstead), which many London workers actually do. They can think about buying in those areas from £75k as well.
But the investment bubble at the high end of the property market is a largely separate phenomenon; middle-class renters are more likely to take advantage of cheap rents from a lazy letting agent managing the investment property of a foreign owner who's not too savvy about what their buy-to-let income should be than they are to be affected by the unoccupied flats in Belgravia not being on the market. For that reason, for £28000 a year I got five large bedrooms, two reception rooms and a garden in a desirable south London suburb three years ago, so I'd expect a pretty impressive[ly located] 2 bed flat for £25000....
Things might be a bit more subtle than that; Barcelona is in catalunya, which is actually doing quite well for itself in spite of the catastrophe in the balance of Spain.
It's true that Barcelona by itself is probably still doing pretty fine - but I would say that's for different reasons - there's no shortage of people from all over the world coming there to live/work/study, be it Erasmus students or business people (a lot of Germans my experience is telling). That keeps the renting market busy.
On the other hand, 680€ for a three-bed flat in Les Corts? That's insanely cheap, so either the OP found a great opportunity or the prices really dropped down in a last year (or, third possibility: I overvalue the attractiveness of Les Corts)
Taking a cursory look at the (current) prices in the area, Chelsea and similar areas look like you might find a single place or perhaps two at those prices, but it won't be terribly appealing - attempting to actually rent for £480/wk looks like it gets you a studio/1bed flat.
Edit: So essentially, £25k/yr will get you almost nothing in upscale areas, a hell of a lot in downscale areas.
There's plenty of choice of central locations with good housing, transport, reputations and nightlife where £25k per annum gets you a very nice flat indeed.
OTOH it is also somewhat fair to say that trying to stay close to upscale areas whilst not being in them can in quite some number of cases place you in slightly risky areas to live.
Being happy to commute can really help.
I'm trying to argue that housing is expensive in those areas - really expensive student accommodation really helps my cause. :P
3 bedroom place then becomes a 6 rent unit property off the books. That would explain part of the rocketing prices. I've known chinese nationals who stayed 15 to a london property. All cash. Authorities do nothing and some are in on the shuffle taking kickbacks.
1. This isn't a widespread thing. No idea how you've decided that it is.
2. How does overfilling properties lead to rising prices? If anything, it would serve to keep prices lower.
3. Which authorities are "in on the shuffle taking kickbacks"?
When one family rents a 2 bedroom flat, they may be able to afford say 1K (husband and wife working). But when the same flat is rented to 4 singles, they might be able to afford 2000. Each person's share is just 500. So when the landlord asks them 1200, they would happily pay for it as the effective rent per person is only 300.
A friend of mine lives somewhere in North London (I believe it is Golders Green), paying 1300pounds a month for 2 and half room apartment, paying council tax and so on, all on a minimum wage as a porter which is around 1200 pounds a month(why he prefers being a porter over a Perl programmer that is one of his skills is another question).
If he were not subletting the room and half, there would be no way he would be able to work in London for a minimum wage. The situation is similar to most people working for minimum wage that he knows.
Still, I think this overfilling is a symptom not the cause of high property prices. This overfilling by the poor has always happened in big cities.
Yup, that is the whole point of market economies, they self correct eventually. I totally sympathize with the folks in London it sucks not being able to find an apartment, so you end up either in a horrible commute or working elsewhere. That makes it harder to find people to work there, so if the imbalance persist the jobs move elsewhere, and the revenues go down, and the economy cools off.
So if you're in your 20's today, something to think about is how this might self correct. Either telecommuting could take off, or something like Musk's Hyperloop dropping off people from one urban center into another. Ask yourself what is it about London (other than the job) that makes it a desirable place to live. Can those things be replicated outside of London? Can you build an urban 'night life' center and split the night life from the work life? What is it going to do to the cost of businesses that have to be in London? Can those businesses be made more efficient or profitable by enabling them to minimize their local footprint? On and on. It really isn't sustainable, and as Charlie points out the crash is going to be pretty epic. So think about how you might turn that to your advantage in 10 years.
So, building lots of co-working spaces in England's market towns and regional cities seems like a sensible move right now.
It's certainly cheaper to move bits than bodies, so why don't companies realize this already? Why do they keep placing more jobs in places people can't afford to live?
One cynical suggestion is that the people making these decisions do live there, and their inflated property values depend on keeping demand high. But this explanation is obviously false because it would be a violation of fiduciary duty.
Naturally :%s/London/Silicon Valley/g among others.
It is the whole 'working at home' issue which not all companies can deal with. Whether it is employees who take advantage of not being visible or managers to fret over what they aren't able to see, it challenges them to be as productive as if they were all in the same room. There is also a certain energy "boost" from having everyone together for whatever reason.
On alternative might be something like the dedicated co-working spaces with high bandwidth connectivity. Imagine that you're "office" is a just a mile or two away, has perhaps 8 or 12 offices/cubes/spaces and is set up so that it is connected at 10gbit to the main 'campus. When you are there you are "virtually present" in other working spaces around the country connected similarly. Large projection screens providing views of the other spaces with real time teleconferencing type audio links with spatialized volume management. The result is you are "near" your home in the lower cost area, everyone at "work" sees and can hear the other folks at work, and rather than paying to heat/cool/lease a multi-floor space in downtown you are paying for a bunch of dedicated 10G point to point lines between many smaller, more efficient spaces.
That's not the only point.
The other point is that flights are still much too cheap:
And that is because airline companies/consumers are still allowed to externalize the insane environmental costs. Meaning: we are allowed to pollute, without having to pay for it. That means, a) we promote pollution (the externalized costs) and b) these costs are paid for by the entire world population (1st, 2nd and 3rd world, even if the latter have never ever polluted in the slightest way).
25k/year here will give you an upscale serviced short-let apartment, or a 5 bedroom, 3 reception room house with a large garden.
In other words, the prices you give are based on assumptions about living in a really expensive part of London.
(and for the record, the prices I cited are for some of the nicer parts of Croydon - in the (few) shit holes you'd pay much less)
Frankly, I'm not moving anywhere else in London again. If I ever strike it rich, I'll still stay here, because what you get for your money here is insane compared to elsewhere in London.
Up to and including huge mansions off private roads (Croydon is home to one of the wealthiest areas in the UK, in parts of Purley) of a size and with gardens that require "staff", that go for less than what many people pay for tiny flats in Central London.
If it's worth thousands a year to avoid having a Croydon post code, I have no sympathy.
I have my own 2 bedroom flat in a professional neighbourhood, no through road, so it's pretty much a private community. Paying under £700 a month on a standard variable rate mortgage (I could push it even lower switching mortgage providers).
Looking out my living room window I see trees. In winter, I have views of Caterham valley. It's quiet and peaceful. This morning just the rustle of leaves and my clock ticking away. I'm surrounded by green, rarely hear traffic, a rumble of a train every now and again down the East Grinstead line. It's everything that London is not.
So it's part of Croydon, zone 6. A choice of two train lines, decent access to London. The 40 minute commute each way is good for hacking away at a personal project, laying down foundations for next steps, bolstering/improving unit-test coverage.
Granted, front-door-to-front-door, it costs me 11 hours to do an 8 hour day, but the time outside of that is all mine, in an environment conducive to lots of thinking and reflection, and coding zones.
And earning less than colleagues doing the same role, I have a lot more disposable income as a single tech-guy working in London.
Snub Croydon if you want, but you also chose to justify market prices of North London rent. That's why London has a series of commuter belts running parallel to the train lines. There's a tradeoff of cost, time and quality of life to be made.
I quite like the southern parts of Croydon: South Croydon, Purley, Kenley, Warlingham, Caterham. Croydon has good parts and bad, both can change over time, as people living there slowly change. I'm in a once-family area that's mostly professional couples now. On the commuter belt into London.
This right here is the reason I'm moving from Brixton (short tube commute) to Caterham/Warlingham/Whyteleafe next year (longer commute, better quality of life, cheaper rent).
Also to add to @brackin's comment, the Croydon tech scene has been gaining momentum for a few years and is at a really exciting stage. There's a real opportunity for Croydon to rival Shoreditch as a UK centre of technology.
More info: http://thecroydoncitizen.com/croydon-tech-city-2/
I also know people who work in this style from Newcastle and Manchester - though the train tickets are often more expensive than flying, there is the added benefit of power, space, and being able to arrive ~5 mins before your train departs.
EDIT: Currently attempting the same from 1hr outside of Paddington, where my rent is less than 50% of my London rent. Though it's certainly a lot more dull than living in Zone 2!! I wouldn't advise it :-(
London property prices will decline if and when London loses its role as an important financial center. Maybe if the UK leaves the EU, Singapore's gravitational pull increases, or some important regulatory changes take place.
I don't think such a decline would have any effect on the supply side; it won't suddenly create more houses, or release more houses from ownership to rental.
What effect would it have on the demand side? Well, people in the financial industry who could move to Singapore or Zurich or whatever might well do that, and so stop wanting to rent houses. But there are vanishingly few such people - you're talking about the elite. Their loss (if we call it a loss) wouldn't have much impact on demand. The kinds of stupendous penthouses and townhouses they rent mean they're not even competing in the same market as the normal middle-class mugs. The majority of people in the financial industry - from bank apparatchiks down to post-room clerks - aren't about to up sticks and migrate to a tax haven. If their jobs go away, they will be looking for other jobs in London.
Even if they decide to give up and go and become shepherds in the Dales or something, how many of them are there? Finance is big in London, but it's far from being a dominant employer. There are huge numbers of people working in all the other sectors of a post-industrial economy too - law, media, IT, corporate head offices of all sorts, academia, healthcare, culture, not to mention all those civil service jobs. If we accept the (forecast) 2013 numbers in http://www.london.gov.uk/sites/default/files/wp51.pdf then finance employs 357 000 people, out of a total of 4 859 000 - 7.3%. Significant, but not enough that anything short of a collapse of the industry will have a significant effect.
Property prices do not simply depend on the number of people looking to buy. They are also determined by how much people are willing and able to pay. If you strip out the inflated salaries they pay in finance, it's going to trickle down to all other salaries and prices.
The financial sector employs large numbers of foreigners. If they leave, demand gets crushed. Also, let's not forget that London property isn't just bought to live in. It's also an investment for rich people from all around the world. If finance moves on, these investors will follow suit.
I'm not sure about trickle-down effects. These highly-paid finance people are not competing for the two-bedroom flats in Seven Sisters that i and other more ordinary middle-class people are after, are they? They're looking rather further upmarket. So, their demand drives a high prices of nice flats in Greenwich or townhouses in Chelsea or whatever. If that demand goes away, prices of those will fall. Then, some people who are currently looking at flats in Seven Sisters may switch to looking at these cheaper houses in Chelsea (choosing a barely affordable place somewhere nice, rather than a cheap place somewhere not so nice). That will reduce demand in Seven Sisters, and should let prices fall. But the degree of fall isn't related to the prices that the finance people were paying in Chelsea, it's just a function of the number of people who shift their attention out of Seven Sisters. I would expect the effect on prices in Seven Sisters to be muted. As opposed to, say, a collapse in the publishing industry, or the government getting serious about moving the civil service to the frozen Northern wastes, which would directly reduce demand in the middle of the market.
The point about international investors doesn't make any sense to me. People don't invest in the London property market because this is where the financial industry is, they invest because it's a safe investment with a good return. The only connection to the financial industry is indirectly, via demand. And since my belief is that a substantial decline in the financial industry would not reduce demand very much, i also believe that such a decline would not cause a flight of investors.
The really terrible situation with no viable alternatives seems limited to SF and NY. (Maybe Paris? News about Paris always makes the cheap suburbs seem dangerous and non-French.)
So much for that...
Or is this merely a German joke about a rough town?
(Now I'm wondering if this is like the PRC, where Beijing has the rich history of a capital but bland areas like Shenzhen are where the money is made.)
The jokes about Berlin would be mostly about its horrendously mismanaged prestige project - the new airport.
I didn't say Mitte, though, but close to Mitte. Central areas like Friedrichshain, Kreuzberg, Prenzlauer Berg.
Even with the relative costs of living taken into account, some cities are more expensive that others - London & Sydney are still right up there.
You don't have to live there. You can commute. And if it gets too hard to find good people in London because both the rent and the commute are terrible, companies will eventually open offices in more fertile areas.
So, not supply and demand, then. Just demand.
Considering that housing benefit was set for a long time at the median market rate, this surely drove rental prices upward.
If landlords know they are guaranteed the median by way of housing benefit, they set their rents at the median (given a housing shortage, they can guarantee to rent out any old dump at the housing benefit rate with no disadvantage: and this is evidenced pretty well by distribution of rent prices), which has driven the median upward - a vicious circle of rent increases.
For example its obvious you don't, otherwise you would realise The Guardian has been banging on about the cost of London for donkey's years (at least 20) and against the bubbles of buy to let. I remember lots of stories flogging against it as the journalists were complaining they couldn't afford to live in London.
Their also complaining against the current schemes the UK Government which Gideon is pushing regarding mortgage guarantees and everybody (whether in the UK or not, whether working in banking or not) is saying will just create another bubble along the lines of buy to let.
It does appear that in 2008 the Guardian Media Group bought a magazine company called Emap, and set up a company in the Caymans as part of some (allegedly quite standard) scheme to avoid some of the stamp duty they'd otherwise have paid in the acquisition. Maybe that's dodgy or maybe it's just standard operating procedure (in which case something is dodgy but it might not be in any useful sense GMG's fault), but it's a very different matter from what you claimed.
I am in any case unable to follow your logic at one key point. Let's suppose for the sake of argument that the Guardian is owned by a tax-avoiding holding company. What exactly is the connection between that and the statement that "left and right is pretty meaningless these days"?
(Full disclosure: I read newspapers seldom but the Guardian less seldom than others. I do not work in law, the media, or the civil service, I do not have a PR agency or any mates who are spin doctors, and I would hazard a guess that my pay is within a factor of two of yours one way or the other. So far as I know, I have no financial or professional interest in the success of the Guardian or its allied companies.)
GMG is selling a product. They (the owners, editors, writers) no more believe it than at McDonald's corporate HQ they live on cheeseburgers for every meal.
You know The Guardian is unlike other newspapers and runs at a loss.
"Miller admits that he does not foresee the newspaper earning a profit anytime soon. Rusbridger said, “The aim is to have sustainable losses.” Miller defines that as getting “our losses down to the low teens in three to five years.” But at some point, if the Guardian does not begin to make money, the trust’s liquid assets, currently £254 million, would be depleted."
"... owned by The Scott Trust, a charitable foundation existing between 1936 and 2008, which aimed to ensure the paper's editorial independence in perpetuity, maintaining its financial health to ensure it did not become vulnerable to take overs by for-profit media groups. At the beginning of October 2008, the Scott Trusts assets were transferred to a new limited company, The Scott Trust Limited, with the intention being that the original trust would be wound up. Dame Liz Forgan, chair of the Scott Trust, reassured staff that the purposes of the new company remained as under the previous arrangements.
The Guardian has been consistently loss-making.
The Guardian's ownership by the Scott Trust is probably a factor in its being the only British national daily to conduct (since 2003) an annual social, ethical and environmental audit in which it examines, under the scrutiny of an independent external auditor, its own behaviour as a company. It is also the only British daily national newspaper to employ an internal ombudsman (called the "readers' editor") to handle complaints and corrections."
You've been bamboozled by the Graun's PR and branding, which they should be slick at, that's their main demographic.
Unlike the companies you mention, The Guardian operates more in the social economy sector (http://en.wikipedia.org/wiki/Social_economy) than the private sector.
That page says that the Guardian's owner owns a company in the Cayman Islands. It doesn't say that the Guardian's owner is registered in the Cayman Islands, nor that the Guardian's owner pays no tax.
In other words, that page says exactly what I already said, and does not say what you said.
> They [...] no more believe it than [...]
It's far from clear exactly what "it" means (presumably something like "the opinions printed in the Guardian", but those are far from monolithic) -- but I would be interested to know your evidence that the people writing for the Guardian do not believe what they are writing.
And, also just out of curiosity, are there any left-leaning publications that you think are sincere, or is it your opinion that everyone whose politics you dislike is a hypocrite?
The real issue is a lack of properties in the places people want to live.
b) Just because some landlords do not want to deal with non-claimant tenants doesn't mean that non-claimant tenants will only want to rent from such landlords, if it means cutting themselves off from lower rents. Theoretically removing those 850k people from the housing market would undoubtedly make the prices fall, if only for a while.
There are strict rules about over-accommodation too. The bedroom tax has been operating for many years for everyone except those in council houses and housing association properties.
Not sure what you mean there
> The bedroom tax has been operating for many years for everyone except those in council houses and housing association properties.
Universal Credit will cause tenants to be paid their housing benefit directly.
There are a number of different approaches to addressing the extra risk this will introduce to rents, with things like Jam-Jar accounts, but it's generally expected to introduce more insecurity and thus limit the amount that can be spent on new housing.
Housing benefit gets paid directly to the tenants. Many years ago you could ask for it to go direct to the landlord, but organised gangs set up claims in the names of dead people.
I suppose it's possible you and I are talking about different kinds of tenancy, but I don't think that the numerous news stories on this can just be hand-waved away either.
> Southwark Council
> Minister Steve Webb said: "We currently pay housing benefit directly to one million people in the private sector and that works pretty well.
> "We are trying to treat people in council houses the same way, but we want to get it right."
That change is for people living in council housing or housing association properties.
It hasn't been possible to get HB for a regular property paid direct to the landlord for many years.
For example see what this gets you N1, a pretty central and desirable postcode:
Don't forget there are other costs that the OP might have added to equation: water, ec, internet, phone...
However, there is much better value to be if you move out a bit. I rent a 3 bed double story semi-detached house in zone 5 NW London in an awesome residential area. Its located in a cul-de-sac, we have a proper front and back garden, no 1950's council flats anywhere nearby, near a great high street and lots of green spaces around. Rent is £1350 per month.
Oh, and there is a fast train (no stops) to Euston which takes only 12 minutes.
the upshot of this is for the average income in London (28k) the affordability limit is 70k. And there were last month 66 properties advertised for sale in London at 70k or less - for a city of 8milllion
just agreeing with the parent post here
Even ignoring north of 96th street (which, check a map, is part of Manhattan) there are plenty of neighborhoods where you can find a two bedroom for $3k or less. Yorkville, Chinatown, far LES, parts of alphabet city, the far west 30s, and probably others I'm not familiar with.
That you could say such a thing says more about you than the rental market.
Oddly, Brooklyn and Queens were not cheaper.
1400/month will give you a large house with a garden many places here.
Heck, if I could get 1400/month to rent out my 3 bedroom house with a garden, I'd have enough left after paying my mortgage to rent a 2 bed flat nearby (though that admittedly is because I struck it lucky with a very favorable tracker mortgage).
(Oh! Or are you one of those denialists who thinks rent control isn't actually destructive, and prefers your own vision of reality to what the consensus among economists has to say about the matter? because if so I've got some people you should meet who don't believe climate scientists on global warming, or the medical establishment about things like homeopathy, and i think you can all be friends)
One scheme used in some European cities is to let the prices float freely, but kick in a subsidy for existing residents when rent in an area increases by more than a certain % of their salary, softening the impact of market shifts on neighborhood turnover. This of course has the impact of increasing prices for newcomers relative to a situation where such a subsidy didn't exist, because fewer existing residents will be forced out due to rent increases, thereby freeing up fewer empty apartments for newcomers to rent. But that's the goal of the program, to reduce the number of existing residents unwillingly forced out of their neighborhood by rent increases, by shifting the margins a bit. With some kind of actual quantitative assignment of utilities it'd be possible to rationally design a subsidy program that buffers the impact of large changes without neutralizing them or setting up a long-term two-tier market (for example, subsidies can cover less than 100% of increases, and phase out over time).
I can't see any problems with this plan.
So in the same apartment building you have a new tenant paying $3000 and an old tenant paying $400 for same size apartments. I.e. the new tenant is overpaying to subsidize the old tenant who is underpaying.
To be clear, there is a "black market" of sorts wrt apartments in Sweden -- not sure how that works, but I think it is people illegally sub-letting at a higher price and/or owners taking a "bribe" on top of the regulated rent -- and it can be hard to get apartments in certain areas (high demand, too few new buildings) -- but my impression is that on the whole, it works much better than an unregulated marked, like the one we have in Norway.
Perhaps someone from Sweden can comment further.
I mean, the point of the article is a little shocking, but it carefully doesn't mention the commute time, which appears to be the thick end of 7-8 hours per day (2h 30 flight each way, and Stansted is not exactly in the heart of London).
As a result, there's no shortage of people paying London's high rent prices. I'm one of them, and I wouldn't trade cheaper rents for that kind of commute (or, honestly, even commuting for 1-1.5 hours from the many towns outside London where such a thing is practical). So why does London need rent control?
No - the author does not suggest that he plans to carry this out: note that he uses only hypothetical averages. He only points out that it is theoretically possible, which is outrageous enough in itself.
I object to the idea that people in general have the simple option to "work harder" to make up 387 difference. In truth, that amount is enough to legally employ 1.5 people.
Poor people (up to and beyond median earners) are excluded from options that you describe as investments precisely because they are investments - if you need to spend your labour and capital on survival, you can't afford to "spend it in smart ways".
I rented a loft for 6620€/year. It's mint condition and it's in the outskirts of Barcelona. I'm 12 min in subway to the plaza Catalonia and in 7 min using the train or 20 mins in bus. To be honest, I would never never again will rent in the centre of the city. It's expensive and all buildings are antique, without the proper commodities.
If you want to come Barcelona, check the outskirts, get a scooter or enjoy the Barcelona transportation system. It's wonderful.
I want to add some more info about living in Barcelona.
The weather is magnifique. It barely rains all the year. You can go mountains withing 2h car travel if you want to enjoy the snow in winter.
Eating can be really cheap IF you go to the supermarket, buy all the meals and cook yourself like I do, I saved 300€/month doing this instead eating outside. If you can compile rails, you can be a chef, :). I do buy the meals and stuff for around 90€/month. That includes the 40lts of water i buy. Then daily i try to buy meat, fish or vegetables for the week and it cost me no more than 220€ month.
I pay 90 euros electricity, 30 gas and 40 water every 2 months. 60 euros for 100mbit fiber connection + phone and mobile and that's all.
At my job we all speak english. And sometimes we speak mix english / spanish but its rare.
Its a hard lifestyle - by about the 10th of these flights you will be sick of the security hassles (and RyanAir) - but it was way better than living in London full time (no offense).
I did it for 18 months before finally burning out on it and moving to a full time remote position (which paid less but I decided that that was worth the upgrade in lifestyle).
Remember that 1 bed flats are especially in demand at present as a result of the (in)famous bedroom tax. A single person or a couple are only allowed 1 bedroom if they need to claim housing benefit (unemployed or low-wage, and remember that in London 'low waged' is a pretty high threshold, e.g. teachers, social workers, retail staff, bus drivers &c).
Bear in mind that building 1 bedroom flats has (hitherto) been regarded as a waste of money for housing associations or councils, so that really only commercial lets are available (at usually twice or three times the rent of a HA/council flat with 2 beds), so, ironically, the tax payer will be paying more to move couples out of 2 bed high rise flats in rough areas which are hard to let into expensive private let 1 bed flats. There will be no takers for the high rise flats (unsuitable for children) so they will be mothballed then expensively demolished.
Yes, bonkers, but the UK is run by the Daily Fail and other populist idiots.
Edit: OK anonymous downvoter, state your reasons
Bonus: It's a three hour commute to London .
Leeds? York? I suspect not.
Bear in mind that single bedroom flats are mainly built in areas where land is expensive, because it is only then that the small space saving over a 2 bed flat outweighs the similar building cost.
Birmingham: 3 bed house commercial, way outside city, is £750 pcm. That will increase when H2S happens (if it does).
This is in Bramley / Pudsey, 4 miles out from Leeds city centre (well within the Leeds / Bradford urban area). I imagine you could get similar in Armley or Holbeck (1.5 miles out).
In the Birmingham/West Midlands anything in reach of centre is over £500 per month.
As other commenters have commented (in other comments), there are plenty of bits of the UK which are still cheap. And whilst they may be absolutely lovely, they're cheap because they're miles from anywhere that anyone with any money would want to work or go shopping.
So you spend 128 hours per month commuting, to save 387€. Not what I would call a bargain.
Oh, what about double taxation? I'm pretty sure you'd be hit by that and that would most likely put you well in the negative.
PS: there is no double taxation between UK/Spain
Your most limited resource is time. Money is a distant second. And if those people arent monetizing their commute or taking care of their entertainment, they are wasting time to save some money. It's nearly as stupid as fracking - wasting water to get oil, only to later have a water shortage and a raped environment. And half as stupid as wasting your health for money, then trying to get it back with money.
So that said, this would probably increase my own personal productivity.
Similarly, it would be cheaper for me to rent in Mexico City and commute to my job in Los Angeles. Yes, some global metropolises have lower rents than others.
Is this serious? Because that's the whole point of this blog post: flying everyday between London and Barcelona it's actually doable, for real. As in: some people might end up doing it.
Of course that presumes that my sanity has no value, but I'm not certain how much worse it would have been than some people's driving commutes.
The rewards of telecommuting become even more pronounced for those of us who live in expensive cities and are forced to either spend exorbitant amounts of money to live near the office or else waste a lot of our lives commuting in traffic.
Oh, you can get a lot done there. But it's no office or home office. And the home office is monotonous and lonely.
Of course, even conference calls suffer from the use of low-quality software and hardware. For some reason companies tend to use $1 microphone and $5 speakers for conference calls.
Nothing beats face-to-face, but proper kit gives decent results.
Some in Congress should probably read this, too...
The job is to write code, which could be done from anywhere (home, coffee shop, on the train, at the beach). The other stuff like collaboration, meetings, architectural discussions, etc., could be done virtually or scheduled for, say once a week. The benefit of a few hallway discussions is far outweighed by the 10+ hours per week spent commuting to the office.
Or my current position which is to develop the in house database, in the language if my choosing. Get to experiment with new technologies. Design it all myself (so no one to blame if it goes badly).
I would be better paid in the first job, but its way less interesting.
Eh, this is kind of what I was getting at. This view is insanely simplistic. Outside of writing code I feel like people make contributions to the product in discussions, train their more junior peers, interview prospective new team members, do a code review for someone else, etc. The job is not to just write code. This is my point. If you see it that way, you're looking at it the wrong way.
Here's what i did last week excluding bureaucracy and writing code. Talking to people to get requirements. Mentoring junior engineers. Discussing solutions with colleagues, code reviews, spec writing, spec review.
The spec writing is expressed as commits to files (we use a wiki) and some of the rest could be expressed as commits to something but bandwidth would be lowered converting it to text
There is, for instance, a flat steps from the London Overground in South Norwood (http://www.zoopla.co.uk/to-rent/details/30891717) that is going for £400/month (€470/month).
(It's unclear why you'd want such a long commute, versus living in far-away green suburbs by the train.)
"Men Only / No Females"
What the hell? How is that legal?
I assume other cities and countries have similar exceptions in their laws.
The irritating thing is that they usually say it at the bottom of the advert instead of in the title, so you waste time clicking on the link and reading it.
Why would you live in Central London? You can commute for an hour into Liverpool St and get much cheaper rents.
There are two arguments that are typically given.
Firstly, you want to encourage people of different incomes to live together. I don't believe that this is a worthy goal. It's not clear that the benefit to people on low incomes outweighs the loss to their high income neighbors. And the richest 1% always find ways to isolate themselves anyway.
The second argument is that welfare should taken into account the cost of living. I also believe this within reason, but the welfare system already does this in many ways. In fact, London's "one bedroom rule" is a clunky way to do precisely this: it lets people live where they like, but prevents people from purchasing an excessive "quantity" of housing.
Sure, Birmingham is not Barcelona or London, but I'm not sure how you'd enjoy them by living most of your off-work time in a Ryanair flight.
A peak return ticket is £158 (this Tuesday, trains arriving before 9am)
The main cost that was ommitted that would give us an idea whether the commute is worth it is the opportunity cost (http://en.wikipedia.org/wiki/Opportunity_cost). While it'd be difficult to estimate how much the author's time is worth, if we assume that he/she gets paid an hourly wage of W, and it takes H hours to commute to and from London, then the opportunity cost would be something like W x H. If that opportunity cost is greater than the 387€ in savings, then it would not be cheaper to commute from an economist's perspective.
Who cares if you live in Barcelona if you're asleep all the time?
Also, from this article it seems that rents have actually fallen, because in 2007 I could not find that kind of accomodation for that price and I was strugling to save any money compared to now.
I guess the housing market collapse in Spain has actually impacted the crazy Barcelona prices of mid 2007.
I decided that I was willing to pay a premium for my <25 minute commute to work (close to Tottenham Court Road). And as long as other people think the same, rent will go up. Pretty standard supply and demand. Everyone works in the center, and nobody likes to waste 2 hours of their day hopping trains and buses.
So this is what you get, take it or leave it, I guess...