8 ms·

London Rent vs. London Salaries

92 points by mthwsjc_ 9y ago

inputcoffee 9y ago
I recommend the article that made the rounds on HN a few weeks ago. It argued that housing as an investment and affordable housing are opposing goals. You can't have both. If London were to make housing affordable - a worthy goal - it would no longer be a good investment. The author seems to want both. In other words, if you could afford the down payment, you wouldn't want to.
- djhworld 9y ago
  People in the UK are obsessed with housing and property, it's a national pastime. To be fair, the housing market has been propped up by successive UK governments for years, it's the only thing they have left and it's the only aspiration they try to goad the population into achieving.
  - inputcoffee 9y ago
    It's the same in NYC, San Fran, Seattle or any major city. There has been this secular global explosion in housing costs in large cities.
  - logarthim 9y ago
    > obsessed with housing and property, it's a national pastime. Are you trying to say that the obsession with housing is some how trivial? I would have thought the lack of land and houses probably prop up the housing market more than the government..
    - djhworld 9y ago
      Not trivial, I'd say it in the sense that's it's fundamentally ingrained into our culture. Additionally renters are almost treated like second class citizens, most rental contracts are short (12 months), real estate agent fees are exorbitant and clauses in rental contracts are designed specifically to protect and nurture the landlords investment, i.e. you cannot redecorate, put pictures up, own pets etc
mafribe 9y ago
the value of the property increases over time Is this a law of nature?
- shafiqissani 9y ago
  I'd rather say the value of the property is related to human population. Human population generally keeps growing.
  - supernovae 9y ago
    As a society, we should address this. I'm more a fan of spreading ourselves across the cosmos and stepping off the planet than say mandated controls here, but it is something we should be discussing. There is a point in time where there isn't enough world for all the people on the world to live a moral life. (and its odd we seem comfortable in many ways that "War" is this answer..)
    - Finnucane 9y ago
      Virtually everyone alive now is going to die on this planet, and their children, and their children's children. It's vaguely possible that someday we may find a place elsewhere for future generations to destroy eventually also, But no more than a tiny few are going to get to go; it will make no difference to the people left behind. We will have to continue to struggle on with what we have.
  - Finnucane 9y ago
    Sure, but real estate markets are local. At least in the US, there are plenty of places where real estate prices are not increasing, because local populations are not increasing, wages are not increasing, and wealthy foreign investors are not looking to park their money in places where real estate prices aren't going up quickly. So, yeah, in a broad, long-term statistical measure, re prices do tend to increase over time, but the distribution is far from consistent or uniform.
  - misja111 9y ago
    It is also related to the height of the mortgage rate; higher rates means more people cannot afford to buy a house, so house prices go down. With the current unprecedented low interest rate levels it is hard to imagine, but there was a time that mortgage rates were above 10%. And there is no fundamental reason why they couldn't go back to those levels one day.
shafiqissani 9y ago
To make an informed decision before getting into such situations, along with you family, I really recommend using numbeo.com
SCdF 9y ago
> The average cost of a flat in London is 500k House prices are horrible in London yes, but for transparency that's central London. Prices get better (but still terrible) if you go further out. I just started looking at houses and for 500k you cant take a 40 minute tube journey twice a day and get a three bedroom house. With a yard. The average room price at The Hilton is high as well. The solution isn't to sleep on the streets, it's to stay in a cheaper hotel.
- droopyEyelids 9y ago
  So, if a person is supposed to sleep for 8 hours a day, and can manage to cut out of work after spending exactly 8 hours in the office, that 80 minutes of commute is about 17% of the bit of your life that you get to live. Spend 17% of your life on that house, man.
  - goldenkey 9y ago
    You can do things on the train. Especially if it's a long ride. Like reading a book. It's not wasted time.
    - tonyedgecombe 9y ago
      It might not be completely wasted but it certainly isn't quality time either.
      - lanstin 9y ago
        If you have kids and a complex job a spot of time on the train when you have no ability to respond to other people is quality. Of course I am more of a reader than a fitness person but bicycles have a similar quality of self determination.
    - jannes 9y ago
      On the train maybe. The London Underground during rush hour is relatively crowded and uncomfortable... You probably won't get a seat.
tsunamifury 9y ago
The average cost of a flat in San Francisco was over $1mm so almost twice that of London. In my.last visit I thought about moving because the deals seemed so good compared to the Bay.
- droopyEyelids 9y ago
  'Flat' means apartment
- sjtgraham 9y ago
  Flats in central London are often over a million pounds. Even studio apartments often cost more than 500k.
- goldenkey 9y ago
  Moving to either of these places is just absolutely absurd. What would possess you to buy into what could crash tomorrow?
- flog 9y ago
  Having lived in both for a few years each I can definitely say that SF is cheaper, at least on a per-sqft basis. You also earn twice as much in SF (plus the equity lottery). That all said: SF certainly ain't no London. I'd still pick London any day of the week.
  - baby 9y ago
    > That all said: SF certainly ain't no London. I'd still pick London any day of the week. Why's that? I've been working in London for a month and was looking into SF for next year. (So far I really like London.)
- bww 9y ago
  $1M is not twice the value of £500K.
  - bashtoni 9y ago
    Give it another six months..
deleted 9y ago
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hammock 9y ago
I was looking at the same thing in SF recently. Vs Chicago, cost of living is 50% higher but salaries are only 25% higher.
- deleted 9y ago
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qznc 9y ago
This "trap" is connected to the Meditations on Moloch [0] for me. Moloch is the god of child sacrifice, the fiery furnace into which you can toss your babies in exchange for victory in war. In this case, in exchange for "a flat in a high income city". You do not literally sacrifice your babies, but in exchange for living there, you must put a wish to have babies aside, because all the double-income couples inflate the rents. [0] http://slatestarcodex.com/2014/07/30/meditations-on-moloch/ http://slatestarcodex.com/2014/07/30/meditations-on-moloch/
bobbington 9y ago
This is the "beauty" of socialism. The greed and covetousness - I want what my neighbor has, is killing societies. Buddy, your wife is going to have to go to work so that you all can support some single lady who wants to sleep around and have kids, but doesn't want to work. Actually muslims are the most common welfare abusers. Their husbands divorce for benefits, then live with their wife on your money!
shaydoc 9y ago
London is shocking price wise...I could never contemplate working there although I once did. I work in Belfast Northern Ireland, earn approx £57k, my spacious detached house with garden and tranquility 20 mins train commute from the office costs around £180K... So there is no financial way I would ever go to London...It seems crazy and illogical to me to work there.. nice place to visit however!
- shitgoose 9y ago
  isn't it great that we have reached the times when we can put Belfast and tranquility in one sentence.
  - shaydoc 9y ago
    yeah, Belfast has been tranquil for a long time, some 20 years or more, the media perception always inflated the reality even in the bad old days.. the good thing is, that in the ensuing time, the city has become alot more vibrant, the youthful generation are now not as shackled with the past. Belfast feels fresh, and its a town with a great industrial and innovative past. Its about time!
etamponi 9y ago
None of this sounds new to me, even if I lived in London for just four months. But the post made me curious about tax brackets in the UK. So... perhaps this is partially OT, but: according to a couple sources [1,2], income tax at £50k/year is just 17-18%, and National Insurance another 9%. This makes the total "tax bracket" around 27%. Even if the author means that 50k is his net salary, the same sources put the tax bracket at just 32% [3]. Why does the author say his tax bracket is around 40%? Are those sources unreliable? Are they missing some of the taxes? [1]: http://www.netsalarycalculator.co.uk/50000-after-tax/ http://www.netsalarycalculator.co.uk/50000-after-tax/ [2]: https://www.incometaxcalculator.org.uk/?ingr=50000 https://www.incometaxcalculator.org.uk/?ingr=50000 [3]: http://www.netsalarycalculator.co.uk/74000-after-tax/ http://www.netsalarycalculator.co.uk/74000-after-tax/
- joefreeman 9y ago
  He means that tax on any additional income over £50k (actually, over £45k) is taxed at 40%.
- djhworld 9y ago
  UK income tax is banded, when people from the UK say they're in the 40% tax bracket they're just referring to what band they're in https://www.gov.uk/income-tax-rates/current-rates-and-allowances https://www.gov.uk/income-tax-rates/current-rates-and-allowa...
- refrigerator 9y ago
  In the UK when people talk about "tax bracket", they don't usually mean "overall tax rate on total income", but rather, specifically which of the following bands you fall into: [1]. The fact that the author is in the 40% tax bracket means that any money he makes above £45k is taxed at 40%. I can imagine to an outsider this seems like a bit of an unintuitive way to frame things :) [1]: https://www.gov.uk/income-tax-rates/current-rates-and-allowances https://www.gov.uk/income-tax-rates/current-rates-and-allowa...
- ed_balls 9y ago
  If you make 50k your effective income tax + NI tax is about 33%. If you take other taxes (council tax, VAT, stamp duty etc.) Total effective taxation is around 50%. Now the dividend tax is 15% (in the best case scenario you can always try funnelling money through Man Island or other tax heaven). There is no land tax and estate tax.
valuearb 9y ago
40% income tax is abhorrent.
- shaydoc 9y ago
  It's 40% on earnings above around 45K, below that it's 20%
  - mbell 9y ago
    That is still extremely high depending on where you are coming from. The US also uses a marginal tax system and the highest bracket is 39.6% and starts at ~$425k (varies based on how you are filing). ~$38-90k bracket is 25%.
    - ninjaroar 9y ago
      You have to add in state tax if you comparing against the US. (Not all states have an income tax, but California does have one)
      - valuearb 9y ago
        And 15% federal payroll taxes
    - noir_lord 9y ago
      You don't pay any tax on the first 11500 either. So on 44999 You'd be paying 20% of (44999 - 11500) so 6700 on 44999 (effective rate been 14.8%).
      - shaydoc 9y ago
        exactly... its not that bad! includes free healthcare! and in northern ireland, free prescriptions!
- deleted 9y ago
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uiri 9y ago
Salaries and living expenses have become really disconnected. These are inherently disconnected. Salary is related to the value of an employee's labour. In the contemporary US, the value of a software developer is high. In that same place, the value of unskilled or low-skilled labour is below the federal minimum wage in a lot of cases. Living expenses are related to the costs of real estate, food, transportation, etc. Some of these things are highly labour intensive so their costs are related to the cost of labour. Things which are not labour intensive have their prices dominated by unrelated supply and demand issues. Real estate is not labour intensive. A single landlord can probably handle dozens of properties.
- Mediterraneo10 9y ago
  > Real estate is not labour intensive. A single landlord can probably handle dozens of properties. I can only suspect you don’t own property that you rent out. Tenants of just one flat, if demanding and complaining enough, can easily burden a landlord beyond any extent he considers acceptable. Any landlord whose portfolio extends into the dozens of properties will almost certainly have contracted all the actual work out to an agency with its own staff of multiple people.
  - dmurray 9y ago
    It's still true though: the agency with multiple full time staff members probably handles hundreds of properties, or has other lines of business as well.
- AndrewOMartin 9y ago
  "Salary is related to the value of an employee's labour." That would be lovely, but I think salary is related to what the employee can get away with paying the employee, regardless of the "real" value. It's not a totally churlish example to point out how little good mothers get paid by the state for their value of their work. There might be a similar reconsideration of how living expenses are reached.
jstanley 9y ago
Leave London? You said yourself that almost anywhere else would be a better financial proposition. Why not move?
- bshimmin 9y ago
  From his "About" page: I’m now actively seeking opportunities to move me and my family somewhere overseas.
  - rdl 9y ago
    I suspect he could easily double his salary in the US, and if outside SF/NYC, would have lower cost of living. Health care and secondary education would be increased costs, but a lot of that would be addressed by the right employer and right location.
  - deleted 9y ago
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pagnol 9y ago
And yet, London has a population of over 8 million. How do they stay afloat?
- tonyedgecombe 9y ago
  Many people would have bought their homes before prices got so high, others will use inheritance, a few take on ruinous debt.
- agd 9y ago
  Firstly, most younger people do not buy property, they simply rent. Secondly, you share with more people. In the article they reference a single bedroom flat at min £1000 a month which is about right. But that's the most expensive way to live. I share with 3 others and on average we pay about 500 each. This is for a nice enough flat in zone 2 (zone 1 is generally for the very wealthy).
RodericDay 9y ago
Nothing soured me on "the economic establishment" more than hearing it said over and over and over and over again that rent control is terrible and bad and basically a way to destroy a city. All while living in various rent-controlled apartments in Montreal, where even people who are working modest jobs get to live happy lives.
- controller 9y ago
  Rent control is terrible because it lowers supply. The correct solution is increase supply by building more.
  - RodericDay 9y ago
    An "econ 101" explanation plastered all over as ultimate explainer, even in the face of healthy, happy rent-controlled cities.
    - controller 9y ago
      Which cities would that be?
- kmonsen 9y ago
  But who gets to pick who gets the nice rent controlled apartments?
  - shitgoose 9y ago
    passed down to friends and relatives, as inheritance.
    - shitgoose 9y ago
      why? this is exactly how it works.
maaaats 9y ago
Why is both parents working always not an option in cases like this? Here he actually touches upon it, but dismisses it saying that it will be more expensive that way. Are these people wanting a personal nanny for their kid or is it really that expensive with kindergarten?
- kybernetikos 9y ago
  Kindergarten is expensive, a pretty normal nursery that can cover working hours will soak up pretty much all of the earning potential of the person who is paid the least in the relationship. Nevertheless, it's something you can do with one child, but it won't make the finances much easier. If you have two pre-school children, you're back in the exact situation described. The article is pretty accurate - a single earner providing for a family and renting in London will not find it easy if they're earning less than 90k (much over the average). On the plus side, once the children are school age, costs go down, and it becomes more possible to be a 2 income family again. You can think of it as 3 years of difficulty but then it'll get bearable again.
  - maaaats 9y ago
    Maybe because it's subsided by the government, but I just checked and here in Oslo 12 months of kindergarten would be lower than the average monthly salary. So going back to work will make economic sense after the first month. I think it's a loss when women leave the workforce after having a baby. (Or, that they have to)
- aidos 9y ago
  It's that expensive. If you want to work normal hours you'll need to put your kids in private nursery. In London that's about £75 per child, per day. We were paying £1300 per month to get 2 days per week for our kids at one point. As you can imagine, working just 2 days a week it's hard to make that back. And of course, you're paying out from income you've already been taxed on.
  - maaaats 9y ago
jorblumesea 9y ago
London has an incredible transportation system, why buy in some central neighborhood? Accepting a 30 minute train ride will do wonders for your buying power, and your ability to save. It's the classic conundrum. You want a place close in, cheap, and lots of space: choose two.
- madaxe_again 9y ago
  Spoken like someone who has never commuted on the tube... Season tickets for any London public transport are eyewateringly expensive, and you get to stand in a sweat-box for the pleasure. Folks prefer to live centrally to minimise their tube-time, although it's always been a mystery to me as to why virtually nobody lives in the City, apart from classic chickens and eggs arguments re: services (it's a graveyard at night and weekend). There is no cheap within an hour of the city. There is no space within an hour of the city - just endless very expensive suburbia.
  - osullivj 9y ago
    Yes, the City is sparsely populated. But there are a lot of people in the Barbican Centre.
  - djhworld 9y ago
    The tube is a lot of money sure, but it's nothing in comparison to commuter trains from other towns/cities. For example a season ticket from St Albans, a 25-30 minute or so train ride into the city costs £400+ a month
    - madaxe_again 9y ago
      Yeah, I know folks who commute in from Bath, Peterborough, etc., and it's on the order of £30k a year for the pass. And they wonder why the traffic is shit on the westway.
- aidos 9y ago
  I'm not sure it even quite works out like that. Property in the burbs is expensive too. You often get more for that money, but I'm not sure it's much cheaper - if you see what I mean. Also, as I posted in another comment - there's a pretty hefty transport tax to pay once you're out of town.
tonyedgecombe 9y ago
When I look at the HN jobs postings every month nearly everything from the UK is in London. I would have thought these companies could gain a recruitment advantage by moving further out where property is cheaper.
- Scoundreller 9y ago
  The further-out jobs probably don't have a recruiting problem. Just the central jobs because... experienced and older folks want/have the cheaper properties and are leaving the central jobs. Similar problem in Toronto Canada... lots of people start out their careers in the city, then leave with their experience to outerlying areas with more realistic real estate (health care IT).
- agd 9y ago
  Not necessarily true. I know that for me, and my friends, the social/cultural/diversity aspects of London mean we'd be unlikely to consider moving out. Yes, living costs are (much) higher here but it's still a great place to live.
AndrewOMartin 9y ago
The article misses the point about the standard of living in London. It might seem strange that on someone's good sounding salary they can't make ends meet, but if you factor in all the nearby (<1hr walking or spending <£5 on public transport) stuff that's practically free and wonderful then on their salary they're still living one of the best goddamn lives in the world. I live in South London, not within walking distance of any tube line, but I still have three cinemas, one major, two independent, near me. The cuisines of a huge swathe of the world, shops for things I did not know existed, and the world's major and up and coming acts performing in hundreds of locations that cost me little or nothing to get to (and often little to attend, the big museums are free, universities do tons of free stuff, the Royal Opera House and similar have ~£15 tickets, and I can ignore the cost of traveling to London). This city is expensive if you look purely within the walls of your home, if you can get out into it, it's like having a comprehensive subscription to a better cultural network than you can imagine. It's indeed true that prices are indeed inflated by the London-centric nature of a lot of the culture, and purely financial investments in property. Apologies for sentence structure and formatting, this post impulsively written on my phone.
- shaydoc 9y ago
  The OP is now a single income household, and is £400 in the red every month. Also they have just had a kid (big cash drain), so I can't imagine there will be much socialising in the near future. Think they may need to "move to the 'burbs"
  - dogma1138 9y ago
    The burbs that are connected via major transport links are not cheaper by any means, you get a slightly bigger property but pay the same in taxes. If you move further out then expect to pay as much as 5000£ per year to commute.
    - randomsearch 9y ago
      > 5000£ Umm, that's pretty cheap for a commuting train pass in London! It's usually way more. Double that at least.
dep_b 9y ago
A part of this problem is that people want to live in nice and secure neighborhoods. If you walk around the city you see plenty of people that don't look affluent enough to worry about 40% tax. These people either got very lucky or live in the neighborhoods you don't want to live. Notorious for crime, immigrants, ugly or bad housing and/or bad public schools. You basically pay for the privilege to live with other rich people so you don't have to deal with that. Naturally that's expensive.
- chrisseaton 9y ago
  > bad public schools Huh? Do you really get 'bad' public schools?
  - matthewmacleod 9y ago
    I don't think anybody outside of the UK would understand the term 'public school' to mean anything other than a state school.
    - chrisseaton 9y ago
      Aaah of course.
    - dep_b 9y ago
      Public versus private schools indeed. Public schools can be quite good but it depends on the quality of the students and teachers that are willing to work there.
Odenwaelder 9y ago
Lesson learned: Don't get children.
- simonbarker87 9y ago
  You're getting downvoted for being flippant but your point is valid. Turns out this family made a big life choice that they couldn't afford and now the reality is setting in, if you can't make ends meet on that salary your expenses need to be reduced, so move. No one deserves to live in London, if it's too expensive move or structure your life in a way that is affordable. Hence why I choose to live in the North East of the UK (and before people say "the salaries are lower" - no they are not for engineering)
atemerev 9y ago
> This requires a higher than average salary from a graduate job, (which is the life stage when people might reasonably start having children)... Sorry, it worked this way in mid 20th century. Personally, I didn't even _think_ of having a child before 32, and when it happened, it was still financially challenging. In Geneva, where I live, the mediab age of the first childbirth is 35.
- bshimmin 9y ago
  And it's 37 in London. Of course, that leads to its own problems.
- Dangeranger 9y ago
  This trend leads to the inevitable question of when the age of being prepared financially for children will cross the point of being unable to bear children physically. Fifty years ago it was common to have children around eighteen, thirty years ago it was common to have children around twenty five, and now it feels like thirty five is the normal. This begs the question whether children will be possible before forty five within twenty years, and at that age bearing children becomes a major risk. Women in large Chinese cities are already feeling unable to balance the pressure of a career and parenthood, opting to not have children at all, or having them very late into adulthood.
  - atemerev 9y ago
    Prenatal screening, extracorporal, adoption.
- baq 9y ago
  And this is fine why?
  - atemerev 9y ago
    Life expectancy, cultural changes.
chvid 9y ago
I am curious. Where on the planet is it currently attractive to work and reasonable cheap to live? London, San Francisco etc. are expensive because of the wellknown opportunities there; are there really any places where you can have it both ways - inexpensive and filled with well-paid jobs?
- alkonaut 9y ago
  Yes please. Affordable living, universal healthcare, reasonable climate. Where?
  - krautsourced 9y ago
    I wanted to say Berlin until you got to the climate part...
    - alkonaut 9y ago
      I'm in Stockholm at the moment so Berlin half-ticks my 3rd box :)
  - olie 9y ago
    Less criterias actually makes it harder, because that matches almost any second/third tier city in Europe.
  - lukasm 9y ago
    I'm moving to Krakow.
  - spiderjerusalem 9y ago
    Vienna is wonderful :)
- bognition 9y ago
  If you are in tech there are a number of cities: Denver Austin Salt lake Just to name a few
- corford 9y ago
speeq 9y ago
Yeah, I've lived in London for two years now and I'm planning to move to Birmingham with the end of my current lease. ~£600-700/mo for a nice 1 bedroom flat: http://www.rightmove.co.uk/property-to-rent/find.html?searchType=RENT&locationIdentifier=REGION%5E94028&insId=1&radius=0.0&minPrice=&maxPrice=&minBedrooms=&maxBedrooms=1&displayPropertyType=flats&maxDaysSinceAdded=&sortByPriceDescending=&_includeLetAgreed=on&primaryDisplayPropertyType=&secondaryDisplayPropertyType=&oldDisplayPropertyType=&oldPrimaryDisplayPropertyType=&letType=&letFurnishType=&houseFlatShare=false http://www.rightmove.co.uk/property-to-rent/find.html?search... It will cut my rent in half which would allow me to travel a lot more and save up for a deposit as well - with an average price of £175k for a 1 bed flat in the city centre. Birmingham Airport is just 10mins by train from the centre and costs like £2.50! Lots of airlines and destinations. Cheap flights within Europe with the budget airlines or even to Asia via hubs like Dubai with Emirates. I'm self employed, work from home and I don't have a child yet - which makes it a lot easier to move. Parts of London are lovely but like you said, unless you own a property or your household income is a few times the average UK salary - it doesn't make much financial sense to live there.
drinchev 9y ago
Sadly, Berlin ( although still cheap ) will match the same equation pretty quickly. Me & gf pay ~900 Euro for top-central ( Rosenthaler platz ) 2 rooms apartment and that's because we took it 3 years ago. Now, since we also talk about kids, we will probably have to pay 1.5k for 3 rooms located ~40 minutes from Mitte. Still not bad, but that's if we hurry up. Rent increase is around 10% per year, which does not match at all the salary increase rate. Talking with friends, we are wondering how people such as bakery-owners, taxi-drivers, delivery / DHL employees work it out!
webo 9y ago
Is one year paid maternity/paternal leave normal in the UK/EU? In the US it's only a few weeks, maybe a few months if at a really good company.
- agd 9y ago
  Generally europe has much better maternity/paternity leave than the US. In the UK you get 39 paid weeks of maternity leave. The first 6 are at 90% of your salary, the rest is much lower (depending on your salary) but you still get paid each week.
- cyphunk 9y ago
  In DE it's something like 4+ months for each parent and one parent can gift their time to the other. It does not depend on the insurance of the company or some silliness like this. However, if you are self employeed you do not get this. Also on top parents get some 100+ eu a month per child regardless of employement, for X number of years. Perhaps of interest: https://www.oecd.org/gender/data/length-of-maternity-leave-parental-leave-and-paid-father-specific-leave.htm https://www.oecd.org/gender/data/length-of-maternity-leave-p...
- bshimmin 9y ago
  Statutory Maternity Leave in the UK is 52 weeks (you don't have to take it, of course). Statutory Maternity Pay is 39 weeks, with the first six at 90% of your average weekly salary, and the rest at £140 a week (or 90% again if that's less). Details here: https://www.gov.uk/maternity-pay-leave https://www.gov.uk/maternity-pay-leave The UK is one of the worst countries in Europe for this, though still substantially better than the US.
randyrand 9y ago
another good comparison would be the size of london vs the population of UK, compared to rents e.g supply and demand, assuming demand is linear with UK population size
jondubois 9y ago
It seems that a lot of people feel essentially forced to take out a mortgage in order to avoid the high cost of rent. The fact that they feel forced into it worries me. Maybe the demand for London property is partly artificial. I think that a lot of people who live in very big cities just want to live there temporarily to earn cash and then get out and retire somewhere else. Personally, I don't want to take a mortgage because I'm afraid that house prices will crash when the next financial crisis comes along.
- djhworld 9y ago
  > It seems that a lot of people feel essentially forced to take out a mortgage in order to avoid the high cost of rent. Assuming you can get a mortgage in the first place, even just for a modest flat at £250k the banks would probably require you to have an income of £60-£70k, or a hefty deposit
dblooman 9y ago
A 5% deposit is not actually available from a lot of lenders. In some cases, a new build apartment is only offered at 20%, sometimes even a 25% deposit is needed. Even if you do get a mortgage with a 5% deposit, it will probably be on a new build, which may have a much higher price that nearby property that isn't. It is true that most of the banks expect you to have a backer, parents, recent inheritance etc. I had a mortgage advisor that was surprised that I didn't have such a situation, which shows the state of those buying in London right now. Most of the people I know under 30 that have recently bought, had such a circumstance through inheritance, with large deposits going down. A 500k, 2 bedroom flat, with a 100k deposit can have a mortgage of £1000 a month. If you were to rent the same flat, you would most likely play £2000 a month. The situation that a lot of people haven't talked about is single people attempting to buy, probably because it almost never happens anymore. Even at a modest £250k, this still will require a lot of cash in the bank and high salary, so single people are now stuck with renting until they meet someone. To those who are wondering why you would buy central London at all, its definitely down to lifestyle. If you go out a lot in the city, getting a uber home is the difference between £15 and £50. The ability to walk to work for some people is also extremely important, as they have a feeling that when they do marry and have kids, they will move out to the suburbs and take a 40 minute train every day.
deleted 9y ago
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lukasm 9y ago
I'm in the exact situation as OP. As a result, I'm moving to lower cost area and continue as a remote worker. Shameless plug: https://github.com/lukasz-madon/awesome-remote-job https://github.com/lukasz-madon/awesome-remote-job 20% down payment + stamp duty tax is roughly 130k. There is also a nonzero risk of the property bubble. Only Hong Kong is worse in terms of property purchasing power for average salary. There are serval reasons for high prices: - Market is heavy regulated. - UK doesn't have any land and estate tax. - Developers oligopoly is hoarding the land to keep the prices. - Foreign investor are using properties as a insurance for rainy days. - Interest rates are low and inflation is high, so people are pumping money into real estate market. - Councils cannot build council housing any more. - Bank of England schemes to buy. It's an unfortunate situation. Extreme misallocation of capital which is bound to cause problems in the future. Money don't flow to companies and productive investments, hence there is no growth and the wages are stagnant. What is more, it makes it really expensive to start a company. What's the solution? 1% estate tax with 80% discount if you pay taxes in UK (British Columbia passed a new property tax and it works well for them[1]). For an average person there would be no change - they would pay estate tax instead of council tax directly or indirectly. That would cause 25-30% price drop in London[2]. Why government won't do it? It would piss off a lot of powerful people which own real estate. Significant portion of the population has bought properties to rent and that price drop could make them go bankrupt. This is an unsolvable problem given the extreme divide in British society, since the Brexit vote. There won't be enough political will to pass the laws. [1] - https://news.ycombinator.com/item?id=12160680 https://news.ycombinator.com/item?id=12160680 [2] - my estimation given other big cities salary to price ratio.
- aries1980 9y ago
  > UK doesn't have any land and estate tax. I don't know what do I pay then under the label of Council Tax. It is £800+ pa for a one-bedroom flat.
  - spoonie 9y ago
    Council Tax is more like a property tax, it's roughly based on the value of your property. Not your property because you're a renter? Too bad, the property tax is charged directly to you, the occupant! ;) (Maybe it's more like an occupancy tax that pays for some of the services your local council provides.)
jannes 9y ago
I had my first child in London at 26. It was very tough financially, but it is possible renting in travelzone 3. I think I was making £40k at the time and we were a single-income family. Something we didn't expect was that it would be so difficult to meet other parents our age. Most of the time we were hanging out with people 10-20 years older than us, because those were the only other parents we could find. Not that that was a bad thing, though. We made some lovely friends!
johnkoper 9y ago
Looking on some London IT job offers in London: https://jobsquery.it/jobs;page=1;tags=;sortBy=publishedAt%3Adesc;query=;location=London%2C%20UK https://jobsquery.it/jobs;page=1;tags=;sortBy=publishedAt%3A... Average salary is about $70k / year: https://jobsquery.it/map;bounds=%7B%22south%22%3A49.82321169878792%2C%22west%22%3A-4.042779450488297%2C%22north%22%3A52.858621861394546%2C%22east%22%3A4.614447112011703%7D https://jobsquery.it/map;bounds=%7B%22south%22%3A49.82321169...

92 points by mthwsjc_ 9y ago

I recommend the article that made the rounds on HN a few weeks ago. It argued that housing as an investment and affordable housing are opposing goals. You can't have both. If London were to make housing affordable - a worthy goal - it would no longer be a good investment. The author seems to want both. In other words, if you could afford the down payment, you wouldn't want to.

djhworld 9y ago
People in the UK are obsessed with housing and property, it's a national pastime. To be fair, the housing market has been propped up by successive UK governments for years, it's the only thing they have left and it's the only aspiration they try to goad the population into achieving.
- inputcoffee 9y ago
  It's the same in NYC, San Fran, Seattle or any major city. There has been this secular global explosion in housing costs in large cities.
- logarthim 9y ago
  > obsessed with housing and property, it's a national pastime. Are you trying to say that the obsession with housing is some how trivial? I would have thought the lack of land and houses probably prop up the housing market more than the government..
  - djhworld 9y ago
    Not trivial, I'd say it in the sense that's it's fundamentally ingrained into our culture. Additionally renters are almost treated like second class citizens, most rental contracts are short (12 months), real estate agent fees are exorbitant and clauses in rental contracts are designed specifically to protect and nurture the landlords investment, i.e. you cannot redecorate, put pictures up, own pets etc

mafribe 9y ago

the value of the property increases over time Is this a law of nature?

shafiqissani 9y ago
I'd rather say the value of the property is related to human population. Human population generally keeps growing.
- supernovae 9y ago
  As a society, we should address this. I'm more a fan of spreading ourselves across the cosmos and stepping off the planet than say mandated controls here, but it is something we should be discussing. There is a point in time where there isn't enough world for all the people on the world to live a moral life. (and its odd we seem comfortable in many ways that "War" is this answer..)
  - Finnucane 9y ago
    Virtually everyone alive now is going to die on this planet, and their children, and their children's children. It's vaguely possible that someday we may find a place elsewhere for future generations to destroy eventually also, But no more than a tiny few are going to get to go; it will make no difference to the people left behind. We will have to continue to struggle on with what we have.
- Finnucane 9y ago
  Sure, but real estate markets are local. At least in the US, there are plenty of places where real estate prices are not increasing, because local populations are not increasing, wages are not increasing, and wealthy foreign investors are not looking to park their money in places where real estate prices aren't going up quickly. So, yeah, in a broad, long-term statistical measure, re prices do tend to increase over time, but the distribution is far from consistent or uniform.
- misja111 9y ago
  It is also related to the height of the mortgage rate; higher rates means more people cannot afford to buy a house, so house prices go down. With the current unprecedented low interest rate levels it is hard to imagine, but there was a time that mortgage rates were above 10%. And there is no fundamental reason why they couldn't go back to those levels one day.

shafiqissani 9y ago

To make an informed decision before getting into such situations, along with you family, I really recommend using numbeo.com

SCdF 9y ago

> The average cost of a flat in London is 500k House prices are horrible in London yes, but for transparency that's central London. Prices get better (but still terrible) if you go further out. I just started looking at houses and for 500k you cant take a 40 minute tube journey twice a day and get a three bedroom house. With a yard. The average room price at The Hilton is high as well. The solution isn't to sleep on the streets, it's to stay in a cheaper hotel.

droopyEyelids 9y ago
So, if a person is supposed to sleep for 8 hours a day, and can manage to cut out of work after spending exactly 8 hours in the office, that 80 minutes of commute is about 17% of the bit of your life that you get to live. Spend 17% of your life on that house, man.
- goldenkey 9y ago
  You can do things on the train. Especially if it's a long ride. Like reading a book. It's not wasted time.
  - tonyedgecombe 9y ago
    It might not be completely wasted but it certainly isn't quality time either.
    - lanstin 9y ago
      If you have kids and a complex job a spot of time on the train when you have no ability to respond to other people is quality. Of course I am more of a reader than a fitness person but bicycles have a similar quality of self determination.
  - jannes 9y ago
    On the train maybe. The London Underground during rush hour is relatively crowded and uncomfortable... You probably won't get a seat.

tsunamifury 9y ago

The average cost of a flat in San Francisco was over $1mm so almost twice that of London. In my.last visit I thought about moving because the deals seemed so good compared to the Bay.

droopyEyelids 9y ago
'Flat' means apartment
sjtgraham 9y ago
Flats in central London are often over a million pounds. Even studio apartments often cost more than 500k.
goldenkey 9y ago
Moving to either of these places is just absolutely absurd. What would possess you to buy into what could crash tomorrow?
flog 9y ago
Having lived in both for a few years each I can definitely say that SF is cheaper, at least on a per-sqft basis. You also earn twice as much in SF (plus the equity lottery). That all said: SF certainly ain't no London. I'd still pick London any day of the week.
- baby 9y ago
  > That all said: SF certainly ain't no London. I'd still pick London any day of the week. Why's that? I've been working in London for a month and was looking into SF for next year. (So far I really like London.)
bww 9y ago
$1M is not twice the value of £500K.
- bashtoni 9y ago
  Give it another six months..

deleted 9y ago

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hammock 9y ago

I was looking at the same thing in SF recently. Vs Chicago, cost of living is 50% higher but salaries are only 25% higher.

deleted 9y ago
[deleted]

qznc 9y ago

This "trap" is connected to the Meditations on Moloch [0] for me. Moloch is the god of child sacrifice, the fiery furnace into which you can toss your babies in exchange for victory in war. In this case, in exchange for "a flat in a high income city". You do not literally sacrifice your babies, but in exchange for living there, you must put a wish to have babies aside, because all the double-income couples inflate the rents. [0] http://slatestarcodex.com/2014/07/30/meditations-on-moloch/ http://slatestarcodex.com/2014/07/30/meditations-on-moloch/

bobbington 9y ago

This is the "beauty" of socialism. The greed and covetousness - I want what my neighbor has, is killing societies. Buddy, your wife is going to have to go to work so that you all can support some single lady who wants to sleep around and have kids, but doesn't want to work. Actually muslims are the most common welfare abusers. Their husbands divorce for benefits, then live with their wife on your money!

shaydoc 9y ago

London is shocking price wise...I could never contemplate working there although I once did. I work in Belfast Northern Ireland, earn approx £57k, my spacious detached house with garden and tranquility 20 mins train commute from the office costs around £180K... So there is no financial way I would ever go to London...It seems crazy and illogical to me to work there.. nice place to visit however!

shitgoose 9y ago
isn't it great that we have reached the times when we can put Belfast and tranquility in one sentence.
- shaydoc 9y ago
  yeah, Belfast has been tranquil for a long time, some 20 years or more, the media perception always inflated the reality even in the bad old days.. the good thing is, that in the ensuing time, the city has become alot more vibrant, the youthful generation are now not as shackled with the past. Belfast feels fresh, and its a town with a great industrial and innovative past. Its about time!

etamponi 9y ago

None of this sounds new to me, even if I lived in London for just four months. But the post made me curious about tax brackets in the UK. So... perhaps this is partially OT, but: according to a couple sources [1,2], income tax at £50k/year is just 17-18%, and National Insurance another 9%. This makes the total "tax bracket" around 27%. Even if the author means that 50k is his net salary, the same sources put the tax bracket at just 32% [3]. Why does the author say his tax bracket is around 40%? Are those sources unreliable? Are they missing some of the taxes? [1]: http://www.netsalarycalculator.co.uk/50000-after-tax/ http://www.netsalarycalculator.co.uk/50000-after-tax/ [2]: https://www.incometaxcalculator.org.uk/?ingr=50000 https://www.incometaxcalculator.org.uk/?ingr=50000 [3]: http://www.netsalarycalculator.co.uk/74000-after-tax/ http://www.netsalarycalculator.co.uk/74000-after-tax/

joefreeman 9y ago
He means that tax on any additional income over £50k (actually, over £45k) is taxed at 40%.
djhworld 9y ago
UK income tax is banded, when people from the UK say they're in the 40% tax bracket they're just referring to what band they're in https://www.gov.uk/income-tax-rates/current-rates-and-allowances https://www.gov.uk/income-tax-rates/current-rates-and-allowa...
refrigerator 9y ago
In the UK when people talk about "tax bracket", they don't usually mean "overall tax rate on total income", but rather, specifically which of the following bands you fall into: [1]. The fact that the author is in the 40% tax bracket means that any money he makes above £45k is taxed at 40%. I can imagine to an outsider this seems like a bit of an unintuitive way to frame things :) [1]: https://www.gov.uk/income-tax-rates/current-rates-and-allowances https://www.gov.uk/income-tax-rates/current-rates-and-allowa...
ed_balls 9y ago
If you make 50k your effective income tax + NI tax is about 33%. If you take other taxes (council tax, VAT, stamp duty etc.) Total effective taxation is around 50%. Now the dividend tax is 15% (in the best case scenario you can always try funnelling money through Man Island or other tax heaven). There is no land tax and estate tax.

valuearb 9y ago

40% income tax is abhorrent.

shaydoc 9y ago
It's 40% on earnings above around 45K, below that it's 20%
- mbell 9y ago
  That is still extremely high depending on where you are coming from. The US also uses a marginal tax system and the highest bracket is 39.6% and starts at ~$425k (varies based on how you are filing). ~$38-90k bracket is 25%.
  - ninjaroar 9y ago
    You have to add in state tax if you comparing against the US. (Not all states have an income tax, but California does have one)
    - valuearb 9y ago
      And 15% federal payroll taxes
  - noir_lord 9y ago
    You don't pay any tax on the first 11500 either. So on 44999 You'd be paying 20% of (44999 - 11500) so 6700 on 44999 (effective rate been 14.8%).
    - shaydoc 9y ago
      exactly... its not that bad! includes free healthcare! and in northern ireland, free prescriptions!
deleted 9y ago
[deleted]

uiri 9y ago

Salaries and living expenses have become really disconnected. These are inherently disconnected. Salary is related to the value of an employee's labour. In the contemporary US, the value of a software developer is high. In that same place, the value of unskilled or low-skilled labour is below the federal minimum wage in a lot of cases. Living expenses are related to the costs of real estate, food, transportation, etc. Some of these things are highly labour intensive so their costs are related to the cost of labour. Things which are not labour intensive have their prices dominated by unrelated supply and demand issues. Real estate is not labour intensive. A single landlord can probably handle dozens of properties.

Mediterraneo10 9y ago
> Real estate is not labour intensive. A single landlord can probably handle dozens of properties. I can only suspect you don’t own property that you rent out. Tenants of just one flat, if demanding and complaining enough, can easily burden a landlord beyond any extent he considers acceptable. Any landlord whose portfolio extends into the dozens of properties will almost certainly have contracted all the actual work out to an agency with its own staff of multiple people.
- dmurray 9y ago
  It's still true though: the agency with multiple full time staff members probably handles hundreds of properties, or has other lines of business as well.
AndrewOMartin 9y ago
"Salary is related to the value of an employee's labour." That would be lovely, but I think salary is related to what the employee can get away with paying the employee, regardless of the "real" value. It's not a totally churlish example to point out how little good mothers get paid by the state for their value of their work. There might be a similar reconsideration of how living expenses are reached.

jstanley 9y ago

Leave London? You said yourself that almost anywhere else would be a better financial proposition. Why not move?

bshimmin 9y ago
From his "About" page: I’m now actively seeking opportunities to move me and my family somewhere overseas.
- rdl 9y ago
  I suspect he could easily double his salary in the US, and if outside SF/NYC, would have lower cost of living. Health care and secondary education would be increased costs, but a lot of that would be addressed by the right employer and right location.
- deleted 9y ago
  [deleted]

pagnol 9y ago

And yet, London has a population of over 8 million. How do they stay afloat?

tonyedgecombe 9y ago
Many people would have bought their homes before prices got so high, others will use inheritance, a few take on ruinous debt.
agd 9y ago
Firstly, most younger people do not buy property, they simply rent. Secondly, you share with more people. In the article they reference a single bedroom flat at min £1000 a month which is about right. But that's the most expensive way to live. I share with 3 others and on average we pay about 500 each. This is for a nice enough flat in zone 2 (zone 1 is generally for the very wealthy).

RodericDay 9y ago

Nothing soured me on "the economic establishment" more than hearing it said over and over and over and over again that rent control is terrible and bad and basically a way to destroy a city. All while living in various rent-controlled apartments in Montreal, where even people who are working modest jobs get to live happy lives.

controller 9y ago
Rent control is terrible because it lowers supply. The correct solution is increase supply by building more.
- RodericDay 9y ago
  An "econ 101" explanation plastered all over as ultimate explainer, even in the face of healthy, happy rent-controlled cities.
  - controller 9y ago
    Which cities would that be?
kmonsen 9y ago
But who gets to pick who gets the nice rent controlled apartments?
- shitgoose 9y ago
  passed down to friends and relatives, as inheritance.
  - shitgoose 9y ago
    why? this is exactly how it works.

maaaats 9y ago

Why is both parents working always not an option in cases like this? Here he actually touches upon it, but dismisses it saying that it will be more expensive that way. Are these people wanting a personal nanny for their kid or is it really that expensive with kindergarten?

kybernetikos 9y ago
Kindergarten is expensive, a pretty normal nursery that can cover working hours will soak up pretty much all of the earning potential of the person who is paid the least in the relationship. Nevertheless, it's something you can do with one child, but it won't make the finances much easier. If you have two pre-school children, you're back in the exact situation described. The article is pretty accurate - a single earner providing for a family and renting in London will not find it easy if they're earning less than 90k (much over the average). On the plus side, once the children are school age, costs go down, and it becomes more possible to be a 2 income family again. You can think of it as 3 years of difficulty but then it'll get bearable again.
- maaaats 9y ago
  Maybe because it's subsided by the government, but I just checked and here in Oslo 12 months of kindergarten would be lower than the average monthly salary. So going back to work will make economic sense after the first month. I think it's a loss when women leave the workforce after having a baby. (Or, that they have to)
aidos 9y ago
It's that expensive. If you want to work normal hours you'll need to put your kids in private nursery. In London that's about £75 per child, per day. We were paying £1300 per month to get 2 days per week for our kids at one point. As you can imagine, working just 2 days a week it's hard to make that back. And of course, you're paying out from income you've already been taxed on.
- maaaats 9y ago

jorblumesea 9y ago

London has an incredible transportation system, why buy in some central neighborhood? Accepting a 30 minute train ride will do wonders for your buying power, and your ability to save. It's the classic conundrum. You want a place close in, cheap, and lots of space: choose two.

madaxe_again 9y ago
Spoken like someone who has never commuted on the tube... Season tickets for any London public transport are eyewateringly expensive, and you get to stand in a sweat-box for the pleasure. Folks prefer to live centrally to minimise their tube-time, although it's always been a mystery to me as to why virtually nobody lives in the City, apart from classic chickens and eggs arguments re: services (it's a graveyard at night and weekend). There is no cheap within an hour of the city. There is no space within an hour of the city - just endless very expensive suburbia.
- osullivj 9y ago
  Yes, the City is sparsely populated. But there are a lot of people in the Barbican Centre.
- djhworld 9y ago
  The tube is a lot of money sure, but it's nothing in comparison to commuter trains from other towns/cities. For example a season ticket from St Albans, a 25-30 minute or so train ride into the city costs £400+ a month
  - madaxe_again 9y ago
    Yeah, I know folks who commute in from Bath, Peterborough, etc., and it's on the order of £30k a year for the pass. And they wonder why the traffic is shit on the westway.
aidos 9y ago
I'm not sure it even quite works out like that. Property in the burbs is expensive too. You often get more for that money, but I'm not sure it's much cheaper - if you see what I mean. Also, as I posted in another comment - there's a pretty hefty transport tax to pay once you're out of town.

tonyedgecombe 9y ago

When I look at the HN jobs postings every month nearly everything from the UK is in London. I would have thought these companies could gain a recruitment advantage by moving further out where property is cheaper.

Scoundreller 9y ago
The further-out jobs probably don't have a recruiting problem. Just the central jobs because... experienced and older folks want/have the cheaper properties and are leaving the central jobs. Similar problem in Toronto Canada... lots of people start out their careers in the city, then leave with their experience to outerlying areas with more realistic real estate (health care IT).
agd 9y ago
Not necessarily true. I know that for me, and my friends, the social/cultural/diversity aspects of London mean we'd be unlikely to consider moving out. Yes, living costs are (much) higher here but it's still a great place to live.

AndrewOMartin 9y ago

The article misses the point about the standard of living in London. It might seem strange that on someone's good sounding salary they can't make ends meet, but if you factor in all the nearby (<1hr walking or spending <£5 on public transport) stuff that's practically free and wonderful then on their salary they're still living one of the best goddamn lives in the world. I live in South London, not within walking distance of any tube line, but I still have three cinemas, one major, two independent, near me. The cuisines of a huge swathe of the world, shops for things I did not know existed, and the world's major and up and coming acts performing in hundreds of locations that cost me little or nothing to get to (and often little to attend, the big museums are free, universities do tons of free stuff, the Royal Opera House and similar have ~£15 tickets, and I can ignore the cost of traveling to London). This city is expensive if you look purely within the walls of your home, if you can get out into it, it's like having a comprehensive subscription to a better cultural network than you can imagine. It's indeed true that prices are indeed inflated by the London-centric nature of a lot of the culture, and purely financial investments in property. Apologies for sentence structure and formatting, this post impulsively written on my phone.

shaydoc 9y ago
The OP is now a single income household, and is £400 in the red every month. Also they have just had a kid (big cash drain), so I can't imagine there will be much socialising in the near future. Think they may need to "move to the 'burbs"
- dogma1138 9y ago
  The burbs that are connected via major transport links are not cheaper by any means, you get a slightly bigger property but pay the same in taxes. If you move further out then expect to pay as much as 5000£ per year to commute.
  - randomsearch 9y ago
    > 5000£ Umm, that's pretty cheap for a commuting train pass in London! It's usually way more. Double that at least.

dep_b 9y ago

A part of this problem is that people want to live in nice and secure neighborhoods. If you walk around the city you see plenty of people that don't look affluent enough to worry about 40% tax. These people either got very lucky or live in the neighborhoods you don't want to live. Notorious for crime, immigrants, ugly or bad housing and/or bad public schools. You basically pay for the privilege to live with other rich people so you don't have to deal with that. Naturally that's expensive.

chrisseaton 9y ago
> bad public schools Huh? Do you really get 'bad' public schools?
- matthewmacleod 9y ago
  I don't think anybody outside of the UK would understand the term 'public school' to mean anything other than a state school.
  - chrisseaton 9y ago
    Aaah of course.
  - dep_b 9y ago
    Public versus private schools indeed. Public schools can be quite good but it depends on the quality of the students and teachers that are willing to work there.

Odenwaelder 9y ago

Lesson learned: Don't get children.

simonbarker87 9y ago
You're getting downvoted for being flippant but your point is valid. Turns out this family made a big life choice that they couldn't afford and now the reality is setting in, if you can't make ends meet on that salary your expenses need to be reduced, so move. No one deserves to live in London, if it's too expensive move or structure your life in a way that is affordable. Hence why I choose to live in the North East of the UK (and before people say "the salaries are lower" - no they are not for engineering)

atemerev 9y ago

> This requires a higher than average salary from a graduate job, (which is the life stage when people might reasonably start having children)... Sorry, it worked this way in mid 20th century. Personally, I didn't even _think_ of having a child before 32, and when it happened, it was still financially challenging. In Geneva, where I live, the mediab age of the first childbirth is 35.

bshimmin 9y ago
And it's 37 in London. Of course, that leads to its own problems.
Dangeranger 9y ago
This trend leads to the inevitable question of when the age of being prepared financially for children will cross the point of being unable to bear children physically. Fifty years ago it was common to have children around eighteen, thirty years ago it was common to have children around twenty five, and now it feels like thirty five is the normal. This begs the question whether children will be possible before forty five within twenty years, and at that age bearing children becomes a major risk. Women in large Chinese cities are already feeling unable to balance the pressure of a career and parenthood, opting to not have children at all, or having them very late into adulthood.
- atemerev 9y ago
  Prenatal screening, extracorporal, adoption.
baq 9y ago
And this is fine why?
- atemerev 9y ago
  Life expectancy, cultural changes.

chvid 9y ago

I am curious. Where on the planet is it currently attractive to work and reasonable cheap to live? London, San Francisco etc. are expensive because of the wellknown opportunities there; are there really any places where you can have it both ways - inexpensive and filled with well-paid jobs?

alkonaut 9y ago
Yes please. Affordable living, universal healthcare, reasonable climate. Where?
- krautsourced 9y ago
  I wanted to say Berlin until you got to the climate part...
  - alkonaut 9y ago
    I'm in Stockholm at the moment so Berlin half-ticks my 3rd box :)
- olie 9y ago
  Less criterias actually makes it harder, because that matches almost any second/third tier city in Europe.
- lukasm 9y ago
  I'm moving to Krakow.
- spiderjerusalem 9y ago
  Vienna is wonderful :)
bognition 9y ago
If you are in tech there are a number of cities: Denver Austin Salt lake Just to name a few
corford 9y ago

speeq 9y ago

Yeah, I've lived in London for two years now and I'm planning to move to Birmingham with the end of my current lease. ~£600-700/mo for a nice 1 bedroom flat: http://www.rightmove.co.uk/property-to-rent/find.html?searchType=RENT&locationIdentifier=REGION%5E94028&insId=1&radius=0.0&minPrice=&maxPrice=&minBedrooms=&maxBedrooms=1&displayPropertyType=flats&maxDaysSinceAdded=&sortByPriceDescending=&_includeLetAgreed=on&primaryDisplayPropertyType=&secondaryDisplayPropertyType=&oldDisplayPropertyType=&oldPrimaryDisplayPropertyType=&letType=&letFurnishType=&houseFlatShare=false http://www.rightmove.co.uk/property-to-rent/find.html?search... It will cut my rent in half which would allow me to travel a lot more and save up for a deposit as well - with an average price of £175k for a 1 bed flat in the city centre. Birmingham Airport is just 10mins by train from the centre and costs like £2.50! Lots of airlines and destinations. Cheap flights within Europe with the budget airlines or even to Asia via hubs like Dubai with Emirates. I'm self employed, work from home and I don't have a child yet - which makes it a lot easier to move. Parts of London are lovely but like you said, unless you own a property or your household income is a few times the average UK salary - it doesn't make much financial sense to live there.

drinchev 9y ago

Sadly, Berlin ( although still cheap ) will match the same equation pretty quickly. Me & gf pay ~900 Euro for top-central ( Rosenthaler platz ) 2 rooms apartment and that's because we took it 3 years ago. Now, since we also talk about kids, we will probably have to pay 1.5k for 3 rooms located ~40 minutes from Mitte. Still not bad, but that's if we hurry up. Rent increase is around 10% per year, which does not match at all the salary increase rate. Talking with friends, we are wondering how people such as bakery-owners, taxi-drivers, delivery / DHL employees work it out!

webo 9y ago

Is one year paid maternity/paternal leave normal in the UK/EU? In the US it's only a few weeks, maybe a few months if at a really good company.

agd 9y ago
Generally europe has much better maternity/paternity leave than the US. In the UK you get 39 paid weeks of maternity leave. The first 6 are at 90% of your salary, the rest is much lower (depending on your salary) but you still get paid each week.
cyphunk 9y ago
In DE it's something like 4+ months for each parent and one parent can gift their time to the other. It does not depend on the insurance of the company or some silliness like this. However, if you are self employeed you do not get this. Also on top parents get some 100+ eu a month per child regardless of employement, for X number of years. Perhaps of interest: https://www.oecd.org/gender/data/length-of-maternity-leave-parental-leave-and-paid-father-specific-leave.htm https://www.oecd.org/gender/data/length-of-maternity-leave-p...
bshimmin 9y ago
Statutory Maternity Leave in the UK is 52 weeks (you don't have to take it, of course). Statutory Maternity Pay is 39 weeks, with the first six at 90% of your average weekly salary, and the rest at £140 a week (or 90% again if that's less). Details here: https://www.gov.uk/maternity-pay-leave https://www.gov.uk/maternity-pay-leave The UK is one of the worst countries in Europe for this, though still substantially better than the US.

randyrand 9y ago

another good comparison would be the size of london vs the population of UK, compared to rents e.g supply and demand, assuming demand is linear with UK population size

jondubois 9y ago

It seems that a lot of people feel essentially forced to take out a mortgage in order to avoid the high cost of rent. The fact that they feel forced into it worries me. Maybe the demand for London property is partly artificial. I think that a lot of people who live in very big cities just want to live there temporarily to earn cash and then get out and retire somewhere else. Personally, I don't want to take a mortgage because I'm afraid that house prices will crash when the next financial crisis comes along.

djhworld 9y ago
> It seems that a lot of people feel essentially forced to take out a mortgage in order to avoid the high cost of rent. Assuming you can get a mortgage in the first place, even just for a modest flat at £250k the banks would probably require you to have an income of £60-£70k, or a hefty deposit

dblooman 9y ago

A 5% deposit is not actually available from a lot of lenders. In some cases, a new build apartment is only offered at 20%, sometimes even a 25% deposit is needed. Even if you do get a mortgage with a 5% deposit, it will probably be on a new build, which may have a much higher price that nearby property that isn't. It is true that most of the banks expect you to have a backer, parents, recent inheritance etc. I had a mortgage advisor that was surprised that I didn't have such a situation, which shows the state of those buying in London right now. Most of the people I know under 30 that have recently bought, had such a circumstance through inheritance, with large deposits going down. A 500k, 2 bedroom flat, with a 100k deposit can have a mortgage of £1000 a month. If you were to rent the same flat, you would most likely play £2000 a month. The situation that a lot of people haven't talked about is single people attempting to buy, probably because it almost never happens anymore. Even at a modest £250k, this still will require a lot of cash in the bank and high salary, so single people are now stuck with renting until they meet someone. To those who are wondering why you would buy central London at all, its definitely down to lifestyle. If you go out a lot in the city, getting a uber home is the difference between £15 and £50. The ability to walk to work for some people is also extremely important, as they have a feeling that when they do marry and have kids, they will move out to the suburbs and take a 40 minute train every day.

deleted 9y ago

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lukasm 9y ago

I'm in the exact situation as OP. As a result, I'm moving to lower cost area and continue as a remote worker. Shameless plug: https://github.com/lukasz-madon/awesome-remote-job https://github.com/lukasz-madon/awesome-remote-job 20% down payment + stamp duty tax is roughly 130k. There is also a nonzero risk of the property bubble. Only Hong Kong is worse in terms of property purchasing power for average salary. There are serval reasons for high prices: - Market is heavy regulated. - UK doesn't have any land and estate tax. - Developers oligopoly is hoarding the land to keep the prices. - Foreign investor are using properties as a insurance for rainy days. - Interest rates are low and inflation is high, so people are pumping money into real estate market. - Councils cannot build council housing any more. - Bank of England schemes to buy. It's an unfortunate situation. Extreme misallocation of capital which is bound to cause problems in the future. Money don't flow to companies and productive investments, hence there is no growth and the wages are stagnant. What is more, it makes it really expensive to start a company. What's the solution? 1% estate tax with 80% discount if you pay taxes in UK (British Columbia passed a new property tax and it works well for them[1]). For an average person there would be no change - they would pay estate tax instead of council tax directly or indirectly. That would cause 25-30% price drop in London[2]. Why government won't do it? It would piss off a lot of powerful people which own real estate. Significant portion of the population has bought properties to rent and that price drop could make them go bankrupt. This is an unsolvable problem given the extreme divide in British society, since the Brexit vote. There won't be enough political will to pass the laws. [1] - https://news.ycombinator.com/item?id=12160680 https://news.ycombinator.com/item?id=12160680 [2] - my estimation given other big cities salary to price ratio.

aries1980 9y ago
> UK doesn't have any land and estate tax. I don't know what do I pay then under the label of Council Tax. It is £800+ pa for a one-bedroom flat.
- spoonie 9y ago
  Council Tax is more like a property tax, it's roughly based on the value of your property. Not your property because you're a renter? Too bad, the property tax is charged directly to you, the occupant! ;) (Maybe it's more like an occupancy tax that pays for some of the services your local council provides.)

jannes 9y ago

I had my first child in London at 26. It was very tough financially, but it is possible renting in travelzone 3. I think I was making £40k at the time and we were a single-income family. Something we didn't expect was that it would be so difficult to meet other parents our age. Most of the time we were hanging out with people 10-20 years older than us, because those were the only other parents we could find. Not that that was a bad thing, though. We made some lovely friends!

johnkoper 9y ago

Looking on some London IT job offers in London: https://jobsquery.it/jobs;page=1;tags=;sortBy=publishedAt%3Adesc;query=;location=London%2C%20UK https://jobsquery.it/jobs;page=1;tags=;sortBy=publishedAt%3A... Average salary is about $70k / year: https://jobsquery.it/map;bounds=%7B%22south%22%3A49.82321169878792%2C%22west%22%3A-4.042779450488297%2C%22north%22%3A52.858621861394546%2C%22east%22%3A4.614447112011703%7D https://jobsquery.it/map;bounds=%7B%22south%22%3A49.82321169...