Rents have risen a lot since then, but is it really impossible for someone in work to be able to afford rent? Or are they insisting on living in a fashionable part of town? (For me independence from my parents was quite a high priority in those days).
The challenge has been maintaining my sanity. My previous apartment was small and didn’t have space for a good home office setup since I never expected to work from hone when I leased it. Additionally, I was having little social interaction due to the pandemic since Texas wasn’t doing a good job preventing spread early on.
My other reason for moving in with my parents was that my company did a lot of business in the travel industry and I feared layoffs. Not having to worry about my living situation while looking for another job in the midst of a crisis was a huge relief in my mind. Fortunately, I’ve been able to stay at the same company so far.
If being independent is the absolute most important thing to you, that’s great. But I’d argue that America’s individualistic culture is one of the biggest reasons we’re struggling to get past this pandemic. People demand the right to ignore basic public health requests, and it’s a major problem.
https://www.cbpp.org/blog/census-income-rent-gap-grew-in-201...
While I’m sure they’ve gone down a little in certain urban cores, like SF, they remain absurdly high in the midsize, Midwestern city where I grew up and now live. When I moved back, apartments here were going for only a bit less than what I paid in Los Angeles and seem to have not gone down at all. Home prices also remain artificially high because there are less listings and more interested buyers.
Anecdotally, this is simply not true. I lived in a fairly nice area next to my university for the better part of the past five years at well below the poverty level. (~$10,000) per year so far less than minimum wage.
I'm mostly voicing a much more general confusion here. I think you have to bolt down our [lets be honest] mostly imaginary system to reality in some spots. Rents can simply be adjusted to whatever people can pay. That way there is no technological or economic progress to be had for those at the bottom. The fix is in?
Or let me put it like this: If I want a banana I want to pay for what it costs to grow the banana, the packaging, the logistics of it and for those who perform the miracle of trade. If all the steps involved also involve maximizing wealth extraction from those employed in those steps by [any and all means!] my banana will naturally grow in price to the point where my minimum wage has doubts if it can afford it. Not just now but forever! Regardless of anything.
Regulation cant be like: We will cap the price of bananas at this point since everyone involved in making them happen for me has to pay rent that grows along with the kiwi's. I very much doubt we cant fix rent. There might be a layer or 2 of maximized wealth extraction above it. Those are not impossible to fix. If we had real collective goals we could just be like: It wont happen - forever! and get a really cheap but highly profitable banana in return.
Note: I can stack bricks and run tubes though them. Its not hard and not a lot of work. IOW: I'm not impressed by a concrete box. End of the day my government owns all the land.
The other reason things are so high is there are too many people and not enough houses, so there's little opportunity for competition.
There is nothing in this that suggests one needs to spend 1/4 or 2/3 of the productive labor in their lives to maintain the house.
Progress is to reduce the maintenance cost. The lower it is the lower the salaries can be which increase productivity exponentially.
IOW grandpa's pension plan is for a large part to continue to pay for housing. He spend his entire life busting his ass but some how didn't manage to earn a place to live.
Neither could I which is why I shared. Is that something that isn't expected any more?
Yes. I've seen what my younger sisters and exes earned working in London in jobs like waitress or saleswoman or law.
The salary simply doesn't cover rent and bills for a one bedroom. It doesn't matter how you put it, it just doesn't work.
One cultural thing I noticed in London and I assume in the UK at large is the lack of studios. There are plenty of 1 bedroom but there aren't studios (200-300 sqft).
If you go to Paris for comparison, you will see an incredible amount of studios.
It makes a world of difference when you get 25+, you make a living and you want to be independent (forget about dating and getting married otherwise). In the absence of studio, you're forced to pay up a lot to get a one bedroom (more than what low end jobs earn so they're stuck with flatmates).
That's the equivalent of £828 a month now. Bills were included.
You can actually pick up a studio flat for £737 in the same area, which actually looks better - it's about 60 square feet which I think it a little smaller than the one I had, but it has it's own toilet. Council tax is on top of that at £45 a month, but still fits in the budget, just.
Assuming the same 50% of take home wage in rent, or a net wage of £1500pcm, would be about £21k/year
My £17800 salary in 2003 would be £28,300 today, or net of £1900pcm, so could afford (on the same ratio) £910 a month, which gives you a fair amount of choice at the moment in W14 according to rightmove.
I'm surprised as I felt renting was far harder now than 20 years ago, but seems it might be slightly better. Of course rents on tiny studios are presumably depressed because of covid19, I'm not sure what they were this time last year.
Even if you feel you can afford spending 50% of your income, it doesn't follow that you can easily find a landlord who allows it.
If you have a bad credit rating, as many people do these days, it will be even more difficult as more landlords check that than income.
In my case, where I am currently living, I had insufficient income at the time I moved in to qualify, and was only allowed to rent on the condition that I paid 12 months rent up front. And then I had to do it again the following year. Obviously that's only available to people with decent savings.
Before I started looking I was under the impression things were harder now then they were in 2003, but it seems not, at least in this one case (tiny studio/bedsits in a dodgy part of west london) -- unless asking prices on rent are massively depressed due to covid.
In 2006/7 I lived in Tunbridge wells, paying £800pcm for a 2 bed flat that looked almost identical to this one, although it was in the next door house and had a garage instead of a parking spot.
https://www.rightmove.co.uk/properties/84635425#/
£800 in 2007 is £1,117.29 today, so a near identical flat for £900 is an interesting price point.
That flat is southeast England in the middle of nowhere.
Not london, not greater london by any metric, it's nowhere.
Properties have increased significantly in cities but not in the desolated countryside. No argument there.
(And difficult if you're self-employed with highly irregular income, I found.)
If using a guarantor, a guarantor has to pass similar checks.
Guarantor works a lot better for a young person starting out in a cheap-ass room in a shared place, whose parents expect this. For a flat and an older adult with retired parents on a low pension, or their own housing costs, not so much.
Good like finding a guarantor if your parents or friends:
- don't have enough spare income to cover your rent in addition to their own expenses
- don't pass the credit check themselves
- can't pass the proof-of-income check themselves
- don't have enough assets to use as security
- are not happy using their assets as security for you (e.g. their limited life savings or their one and only home)
Some people don't have parents, and these days, quite a lot of parents rent precariously too. They would be turned down as guarantors.
More parents renting is a factor which has changed in recent years.
I imagine most people don't have friends who would be willing to be long term rent guarantors, even if they could be.
Because they can ask those things more quickly and easily now. There's a bunch of jerks in California who are hellbent on connecting every DB in the world to every other DB that we can thank for this.
Absolutely. When my mother-in-law divorced and moved into a rented house, I was her guarantor.
I did have parents in 2003, but they lived 3000 miles away in a greek village where there was an ISDN line a 20 minute ride down the mountain, so not too practical. But this artcile is about 18-29 year olds moving in with their parents, not 50 year olds.
It applies in that age range as well.
A 29 year old moving in with their 64 year old parent(s) who are themselves poor and renting while on the edge of official retirement age, is going to find their parents probably rejected as guarantors.
This is where room in a shared house comes into play. They're available for $4-500 a month in my city.
Luckily rooms are more likely to be rented somewhat informally, or by less stringent agents & landlords, compared with flats, so there's a decent market of these without a hard income requirement, alongside those with the requirement.
Moved in with a friend after that, saved about £100 a month, but also in a nicer part of town.
Have to say the budget felt stretched at £24K, luckily that went up a lot pretty fast.
Do that every month from age 21 and you'd be able to get a 10% deposit on a house by the time you're 40.
You're talking about Kensington in London? That's the center and one of the most expensive location in the city.
Where the fuck do you see a place for £737 in there?
Either it's a flatshare (that's a bit low, must be 6+ people) or you confused 737 per month with 737 per week (that'd be £3000 a month, possible for a luxury 1 bedroom in that area the size of what people consider a 2 bedroom, typical ads that come at the top of rightmove).
The area near "West Kensington" and "Kensington Olympia" tube stations. It's technically in Hammersmith+Fulham.
Kensington borough contains(ed) Grenfell, it's not one of the most expensive places in the city, it's varied, like many boroughs.
https://www.rightmove.co.uk/properties/49989753#/ - £737
https://www.rightmove.co.uk/properties/66191535#/ - £758
https://www.rightmove.co.uk/properties/95389700#/ - £806
The £806 is prety much what I got for £520, and inflation wise pretty much the same price.
I suspect the prices are so low because of covid, I don't have any evidence of that though.
Here's a pre-covid article with some average rents: https://www.simplybusiness.co.uk/knowledge/articles/2019/09/.... Dagenham (Zone 5) studio: £688
https://www.homesandproperty.co.uk/property-news/renting/ave...
reports "Rents in the capital are down 4.2 per cent as tourists stay away and short-let landlords switch to long-term contracts, flooding the market."
I suspect rents on tiny bedsit studios are down even more, especially as weekly commuters no longer need them, and young people move to live with parents.
That explains the £737. Can't even put a desk to do your homework. Nobody would want to live there, especially with COVID.
Regular studios in student accommodations go for double that in this area. I've actually seen friends paying as much as £2000 a month, when they come from far or from abroad, don't have the luxury to visit 10 properties and landlord won't rent to students with no income.
The room in my hall of residence was smaller than that, although being in Exeter it cost far less (£90 a week, so £390 a month).
Of course I had an office to go to for that time, clearly it's different in the last 6 months.
My personal story:
I lived there up until about a year ago, not far from the center. Being a young person, I earned the usual entry-level software developer salary. I tried to live a relatively frugal lifestyle, which included not going out and spending not a whole lot on personal entertainment costs.
The rent was £1500, so I had to rent a flat with my friend. Travel was expensive, and a fixed cost in my circumstances. Bills were not included, so we had to pay those as well. I tried to cut costs as much as I could, and in retrospect maybe I could have cut £80-100 a month from my grocery spending by shopping in cheaper stores, or perhaps even another £50 on top of that if I was willing to trade off some of my sanity/time for the savings. I had some savings, but not a whole lot.
The whole time, I was cutting into my savings each month and literally losing my money by staying in London. Even if I tried to save harder, that would get me nowhere nearer to saving up for a deposit for the next few years.
I eventually decided to leave the city behind and move to Scotland. Instant quality of life improvement, and I actually got the chance to start building up my savings rather than chipping away at them.