4 ms·

The median price for a property in London is £600K, the average is over £1M today. That means that normal people cannot afford to buy anything in London even w

The median price for a property in London is £600K, the average is over £1M today. That means that normal people cannot afford to buy anything in London even with HTB which is a terrible policy the people who can afford to use it are already in the top percentiles. A £600K property as a first time buyer requires you to have about £100K to get on a property ladder. 10% deposit for a 90% LTV mortgage is £60K, stamp duty is £17,500 (£20K from end of Sep 21) that’s already ~£80,000 then you have mortgage fees, legal fees, furnishing costs (since new builds don’t even come with blinds)… The average salary in London is £41K, that leaves you with take home pay of about £30K after tax (if you have no student loans). So a house hold of two people living in London has about £60K per year if both earn the average pay, £25K or more of which would go to rent per year, another £4000 will go to various utility bills and council tax, another 5-5.5K would go for travel (assuming you live within zone 1-4), then you have food, clothing and other living expenses, so if you are somehow lucky and can save up £10K per year that’s 10 years to save up enough for a median property which is most likely a 54 sq/m flat. Add kids to this mix and well you are royally fucked.

refurb 5y ago
Why is it reasonable to assume that people earning an average wage should be able to afford a home in the most desirable city in the UK, and one of the most desirable cities in Europe if not the world? I mean, nobody complains in the US if the average family can’t buy a home in Manhattan. That’s just unreasonable.
- iso1210 5y ago
  The idea is that two people on an average London wage should be able to afford to live in an average home in London. The truth is they can - if they can get the deposit together (which is trivial if you have parents you can live with for a couple of years, but if you've moved to London for work and your family lives 300 miles away your deposit savings go on rent). Perhaps they can't live in the most desirable parts of Chelsea, but there are affordable houses in the London area for a couple of 41k each. Personally if I had to work in London, I'd look at buying a 2 bed house somewhere like Leighton Buzzard (30m Euston), Gravesend (22m St Pancras), Tonbridge (35m London Bridge), for about 250k.
- jefftk 5y ago
  > earning an average wage Average wage in London, not average overall.
- ClumsyPilot 5y ago
  "Why is it reasonable to assume that people earning an average wage should be able to afford a home" Whats's next, "why should an average person be able to afford an education or healthcare"?
iso1210 5y ago
> even with HTB which is a terrible policy the people who can afford to buy are already in the top percentiles What a load of rubbish. HTB really helped us when buying by giving 5 years of interest free We bought a 240k house with a 12k deposit and 48k htb. Moving costs etc meant we had to find about £17k, which we borrowed. Assuming you do that now, HTB means paying £647 a month on the mortgage and £330 a month on repaying the deposit. Total of £977pcm. After 5 years we sold for 240k with £48k htb and £160k mortgage, leaving us with 32k in equity. We could have remortgaged and repaid the htb at that point for a total outlay of £911pcm (with about £500 in fees) With two earners on a middle 28k a year that's falls into well into the "affordable" bucket. Even in London, a 600k house with htb will mean a £30k deposit (a problem) and a £330k mortgage. Two people on 41k each can borrow up to £368k with nationwide which gives an idea about affordability (you'll have to knock some off for things like service charges which are ubiquitious in new houses) And 41k a year with a coalition loan means you have £30,310.51 per year after student loan, not before. If you still have a labour loan from pre-2012 you'll be paying an extra £600 a year. All that's assuming a 600k loan. Reality is that help to buy homes aren't that expensive. This is a decent sized 2 bed flat for £375k. https://www.helptobuyagent2.org.uk//property-search/property-details/30111/34-the-waldrons--croydon- https://www.helptobuyagent2.org.uk//property-search/property... Personally I think you'd be crazy to live in London when there are far more reasonable places to live just half an hour out of a one 1 station and far far less cost, but it London is affordable for people with two London incomes. If you're single on minimum wage and wanting to live in central London? Well tough. Move somewhere else. Plenty of choice for houses in Crewe and Stoke, and plenty of minimum wage jobs.
- yodsanklai 5y ago
  > you'd be crazy to live in London when there are far more reasonable places to live just half an hour out of a one 1 station and far far less cost How much cheaper would it be? I've just moved to London (living in zone 2, going a bit further didn't strike me as much cheaper).
  - iso1210 5y ago
    Depends how often you need to be in London, 2 bed terrace, £270k https://www.rightmove.co.uk/properties/111488087 https://www.rightmove.co.uk/properties/111488087 40 minutes to Fenchurch Street (little less for Docklands), £65 per week//£2600 per year. 2 bed 230k https://www.rightmove.co.uk/properties/112846073 https://www.rightmove.co.uk/properties/112846073 22 minutes to St Pancras, £127 per week//5k per year If you can get a 2 bed house that close to central London at those prices that's great.

refurb 5y ago

Why is it reasonable to assume that people earning an average wage should be able to afford a home in the most desirable city in the UK, and one of the most desirable cities in Europe if not the world? I mean, nobody complains in the US if the average family can’t buy a home in Manhattan. That’s just unreasonable.

iso1210 5y ago
The idea is that two people on an average London wage should be able to afford to live in an average home in London. The truth is they can - if they can get the deposit together (which is trivial if you have parents you can live with for a couple of years, but if you've moved to London for work and your family lives 300 miles away your deposit savings go on rent). Perhaps they can't live in the most desirable parts of Chelsea, but there are affordable houses in the London area for a couple of 41k each. Personally if I had to work in London, I'd look at buying a 2 bed house somewhere like Leighton Buzzard (30m Euston), Gravesend (22m St Pancras), Tonbridge (35m London Bridge), for about 250k.
jefftk 5y ago
> earning an average wage Average wage in London, not average overall.
ClumsyPilot 5y ago
"Why is it reasonable to assume that people earning an average wage should be able to afford a home" Whats's next, "why should an average person be able to afford an education or healthcare"?

iso1210 5y ago

> even with HTB which is a terrible policy the people who can afford to buy are already in the top percentiles What a load of rubbish. HTB really helped us when buying by giving 5 years of interest free We bought a 240k house with a 12k deposit and 48k htb. Moving costs etc meant we had to find about £17k, which we borrowed. Assuming you do that now, HTB means paying £647 a month on the mortgage and £330 a month on repaying the deposit. Total of £977pcm. After 5 years we sold for 240k with £48k htb and £160k mortgage, leaving us with 32k in equity. We could have remortgaged and repaid the htb at that point for a total outlay of £911pcm (with about £500 in fees) With two earners on a middle 28k a year that's falls into well into the "affordable" bucket. Even in London, a 600k house with htb will mean a £30k deposit (a problem) and a £330k mortgage. Two people on 41k each can borrow up to £368k with nationwide which gives an idea about affordability (you'll have to knock some off for things like service charges which are ubiquitious in new houses) And 41k a year with a coalition loan means you have £30,310.51 per year after student loan, not before. If you still have a labour loan from pre-2012 you'll be paying an extra £600 a year. All that's assuming a 600k loan. Reality is that help to buy homes aren't that expensive. This is a decent sized 2 bed flat for £375k. https://www.helptobuyagent2.org.uk//property-search/property-details/30111/34-the-waldrons--croydon- https://www.helptobuyagent2.org.uk//property-search/property... Personally I think you'd be crazy to live in London when there are far more reasonable places to live just half an hour out of a one 1 station and far far less cost, but it London is affordable for people with two London incomes. If you're single on minimum wage and wanting to live in central London? Well tough. Move somewhere else. Plenty of choice for houses in Crewe and Stoke, and plenty of minimum wage jobs.

yodsanklai 5y ago
> you'd be crazy to live in London when there are far more reasonable places to live just half an hour out of a one 1 station and far far less cost How much cheaper would it be? I've just moved to London (living in zone 2, going a bit further didn't strike me as much cheaper).
- iso1210 5y ago
  Depends how often you need to be in London, 2 bed terrace, £270k https://www.rightmove.co.uk/properties/111488087 https://www.rightmove.co.uk/properties/111488087 40 minutes to Fenchurch Street (little less for Docklands), £65 per week//£2600 per year. 2 bed 230k https://www.rightmove.co.uk/properties/112846073 https://www.rightmove.co.uk/properties/112846073 22 minutes to St Pancras, £127 per week//5k per year If you can get a 2 bed house that close to central London at those prices that's great.