Comment by _jxdz | Hacker News Reader

Comment by _jxdz | Hacker News Reader

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I earn more than my family or my peers earn, but living in London often feels like my money comes in and goes out again immediately. As a result, I currently live with my family in an extraordinarily nice house that I would never be able to afford myself. I pay them a nominal sum for rent; they refuse to take the market rate even though I am happy to pay it...

I look at the rental cost of a standard 1 bedroom flat in my part of London, and they want £1,200/month just in rent. It would be cheaper to get a mortgage, but I fail the "affordability" tests. Perhaps I am selfish, but I am not so desperate to move out to a relatively inferior property in which I possess no interest (since I will merely be renting) for that sum.

I don't believe I'll ever be able to afford a house, especially as wage growth allegedly stagnates and then seemingly declines past the age of 40. If these are my "peak earning" years, then I'm quite sad because at this rate I'll be trapped at home forever. It would be fine if rents were about the same as a mortgage: one could rent while saving.

At the moment though, renting while saving seems eminently unaffordable.

> It would be cheaper to get a mortgage, but I fail the "affordability" tests

I naively thought that these affordability tests would involve looking at whether my take home income minus my monthly costs was higher than the monthly cost of the mortgage. That sounds like a reasonable definition of "affordable", right? We can account for increases in interest rates too.

In reality, the amount of ridiculous hoops that need to be jumped through to quality as being able to "afford" a mortgage is silly, and it never used to be like this. Current employment contract less than a year old? Denied, even if you've been at the same company longer than that. Contractor without 2 years of Ltd company history? Welp. Want to use help to buy? That'll limit your pool of potential lenders even further.

There's also the point that banks want you to put down a sizeable deposit so that if the market crashes and you lose your job they can sell the house, recover their outstanding debt and you lose your deposit.

So you might be able to afford £1,200 a month in mortgage payments (which on a 30 year mortgage could mean you could borrow £400,000) but you'd need a 20% deposit, meaning you'd need to have saved up £100,000 to take advantage of it.

And even then, for £500k in London that's, what an okay 2 bed flat.

Yes, £500k doesn't get you much here. This is why I champion remote working and possibly relocating to more affordable areas of the United Kingdom, thus spreading the wealth around a bit more.

Yes, I had similarly naive thoughts about that too. They want ludicrous sums for the deposit in my case, and also I haven't worked at my company for more than a year at the moment so I failed that too.

At this rate, I'm considering moving out of London to somewhere else (perhaps with fibre internet), renting be damned.

As an aside: how strange that we have a number of mutual professional connections (couldn't help but check out your GitHub).

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