4 ms·

I spent my childhood in London, moving overseas after graduation - not financially motivated. With two kids now I often entertain ideas of moving back, primaril

I spent my childhood in London, moving overseas after graduation - not financially motivated. With two kids now I often entertain ideas of moving back, primarily because it really is an amazing city and because of the opportunities my children would have. Unfortunately, even with the handsome salaries senior devs earn I cannot see how I could possibly pay rent and support children. So I often wonder where all this money is coming from? If a salary many multiples the average would not cover living costs, who is pushing up prices? Who is buying these houses?

peteretep 12y ago
a) People who don't need to support children b) Landlords, who rent the houses to people who can't afford to buy, but can afford rent
chrisseaton 12y ago
"even with the handsome salaries senior devs earn" People working at Google etc think they're paid handsomely, but in reality in London they are paid a fraction compared to what you can get in the financial sector. This article and the comments here talk about software developers and graphic designers, and the reality is there's a whole community above you earning much more. That's who's able to buy the houses.
- 3princip 12y ago
  That's what I suspect, but it's crazy. The average salary in London is £27k, a senior dev will earn 3x that (I'm guessing). And that's still barely enough to live comfortably. I guess that's the point of the campaign in the linked article, but I can't see how that will change, unless the financial bubble bursts.
  - chrisseaton 12y ago
    And finance will pay you more than double that, and give you a 100% bonus on top of that again. http://oxfordknight.co.uk/jobs/all-jobs/core-risk-and-pricing-platform-huge-global-impact/ http://oxfordknight.co.uk/jobs/all-jobs/core-risk-and-pricin...
    - zo1 12y ago
      Oxford Knight looks like some sort of recruitment agency. Any link to the actual institution offering that?
      - chrisseaton 12y ago
        No, and to be fair it is the top salary I could find publicly. But I have a couple of friends who are compensated not far off that. Another twist - they're both humanities students, that HN loves to claim will never get a job with their classics and literature.
        datamatt 12y ago
        What do they do?
  - willyt 12y ago
    I think £27k is the UK average or the southeast average? I thought the london average was closer to £60k? I can't find a source for that though.
    - 3princip 12y ago
      My mistake, I just looked at wikipedia http://en.wikipedia.org/wiki/Income_in_the_United_Kingdom#Income_distribution_across_UK_regions_2007 http://en.wikipedia.org/wiki/Income_in_the_United_Kingdom#In... It's 2007 and income distribution is probably per capita rather than average salary. In that case it's not as extreme as I've implied. EDIT: A newspaper article from last year claims the UK average is 26k, so London is probably significantly higher. http://www.mirror.co.uk/news/uk-news/uk-average-salary-26500-figures-3002995 http://www.mirror.co.uk/news/uk-news/uk-average-salary-26500...
    - blowski 12y ago
      Is that the mean or the median average? From what I know, there are a large number of people earning more than £250K, but a massive group that earns around £20-25K - supermarket workers, nurses, primary school teachers, etc. It's that latter group that simply can't afford to live in London in safe, comfortable environment.
  - grey-area 12y ago
    and that's still barely enough to live comfortably. Many people live comfortably in London for far less than 90k gbp, it all depends on your expectations and requirements.
    - 3princip 12y ago
      Even with rent prices? If I was single it wouldn't matter, I could live in a shoe-box, but a family needs a little extra room. And we're a very frugal family. It's interesting that growing up in London my single-parent mother on an income between 40-50k managed to buy a house and raise two kids. We lived comfortably. That house is now worth 6x more than the price she payed. Her salary today (she's retired) would be almost the same. That's why I can't imagine doing the same thing she did, even on a 2x salary. I'm not complaining, just thinking out loud.
      - grey-area 12y ago
        Given wage inflation over 40 years her salary would not be the same. Given asset inflation I'd expect the house to go up say 4x. Prices in London have been frothy recently, but as someone in a similar situation it is possible to buy in a nice area if you compromise on some things first time - either garden house/flat, or area. If you are in the top 10-20% (as many posting here are) there are lots of options in London for a good quality of life. Personally I would rent right now, save and await a correction.
- samscully 12y ago
  Another factor is generational wealth. Most of my friends who own houses in London earn less than me but were given large amounts of money by their parents. When you have a 20-40% deposit the monthly mortgage payments become much more affordable.
deleted 12y ago
[deleted]

peteretep 12y ago

a) People who don't need to support children b) Landlords, who rent the houses to people who can't afford to buy, but can afford rent

chrisseaton 12y ago

"even with the handsome salaries senior devs earn" People working at Google etc think they're paid handsomely, but in reality in London they are paid a fraction compared to what you can get in the financial sector. This article and the comments here talk about software developers and graphic designers, and the reality is there's a whole community above you earning much more. That's who's able to buy the houses.

3princip 12y ago
That's what I suspect, but it's crazy. The average salary in London is £27k, a senior dev will earn 3x that (I'm guessing). And that's still barely enough to live comfortably. I guess that's the point of the campaign in the linked article, but I can't see how that will change, unless the financial bubble bursts.
- chrisseaton 12y ago
  And finance will pay you more than double that, and give you a 100% bonus on top of that again. http://oxfordknight.co.uk/jobs/all-jobs/core-risk-and-pricing-platform-huge-global-impact/ http://oxfordknight.co.uk/jobs/all-jobs/core-risk-and-pricin...
  - zo1 12y ago
    Oxford Knight looks like some sort of recruitment agency. Any link to the actual institution offering that?
    - chrisseaton 12y ago
      No, and to be fair it is the top salary I could find publicly. But I have a couple of friends who are compensated not far off that. Another twist - they're both humanities students, that HN loves to claim will never get a job with their classics and literature.
      - datamatt 12y ago
        What do they do?
- willyt 12y ago
  I think £27k is the UK average or the southeast average? I thought the london average was closer to £60k? I can't find a source for that though.
  - 3princip 12y ago
    My mistake, I just looked at wikipedia http://en.wikipedia.org/wiki/Income_in_the_United_Kingdom#Income_distribution_across_UK_regions_2007 http://en.wikipedia.org/wiki/Income_in_the_United_Kingdom#In... It's 2007 and income distribution is probably per capita rather than average salary. In that case it's not as extreme as I've implied. EDIT: A newspaper article from last year claims the UK average is 26k, so London is probably significantly higher. http://www.mirror.co.uk/news/uk-news/uk-average-salary-26500-figures-3002995 http://www.mirror.co.uk/news/uk-news/uk-average-salary-26500...
  - blowski 12y ago
    Is that the mean or the median average? From what I know, there are a large number of people earning more than £250K, but a massive group that earns around £20-25K - supermarket workers, nurses, primary school teachers, etc. It's that latter group that simply can't afford to live in London in safe, comfortable environment.
- grey-area 12y ago
  and that's still barely enough to live comfortably. Many people live comfortably in London for far less than 90k gbp, it all depends on your expectations and requirements.
  - 3princip 12y ago
    Even with rent prices? If I was single it wouldn't matter, I could live in a shoe-box, but a family needs a little extra room. And we're a very frugal family. It's interesting that growing up in London my single-parent mother on an income between 40-50k managed to buy a house and raise two kids. We lived comfortably. That house is now worth 6x more than the price she payed. Her salary today (she's retired) would be almost the same. That's why I can't imagine doing the same thing she did, even on a 2x salary. I'm not complaining, just thinking out loud.
    - grey-area 12y ago
      Given wage inflation over 40 years her salary would not be the same. Given asset inflation I'd expect the house to go up say 4x. Prices in London have been frothy recently, but as someone in a similar situation it is possible to buy in a nice area if you compromise on some things first time - either garden house/flat, or area. If you are in the top 10-20% (as many posting here are) there are lots of options in London for a good quality of life. Personally I would rent right now, save and await a correction.
samscully 12y ago
Another factor is generational wealth. Most of my friends who own houses in London earn less than me but were given large amounts of money by their parents. When you have a 20-40% deposit the monthly mortgage payments become much more affordable.

deleted 12y ago

[deleted]