Is There Any Point In Working In The South East?

[HaX]

Hi there,

Originally from the East Midlands, working in IT, living in Reading and earning £40K Per Annun I've been down here for two years living in a houseshare saving money and clearing debt etc,

Despite the fact that I like my job and the company I work for, I've been very undecided about making any form of long-term commitment to staying here due to the insane cost of living, so until recently have discouraged my girlfriend (nurse earning £25K) from coming down.

Anyhow, she's now got a job and we're looking at places to live within a mile of the Royal Berkshire Hospital. Even 1 bed flats seem to hover at around £900 PCM, and the sweet point for a decent 2 bed seems to sit at £1200 PCM. The majority of flats I've seen below this price point have been disgusting, damp, poorly maintained grot boxes, riddled with mould.

What amazes me most is that the letting agents don't even attempt to disguise the problems, and that the landlords don't feel the need to resolve issues with their properties before putting them on the market.

I've never seen anything like it. Prior to moving down here, I'd spend a good deal of time living in privately rented accommodation in the East Midlands. In general standards were much higher, and of course you got much more for your money. My wage of 25 K was enough to afford somewhere decent and well maintained to live.

If we end up having to rent a £1200 PCM place, I'll only be ~£300 better off than I was in my run of the mill £25K IT job "Up North", which to me isn't worth being away from the people/places dear to me.

What are people's thoughts. Is there any point in being down here? With the exception of it's jobs market, I find Reading to be vastly inferior to somewhere like Nottingham or Sheffield.

Cheers

[StainlessSteelCat]

If you can hack it; rent below your normal standard, save up and in a few years move back up North.

Absolutely cannot see the point of any city or sizeable town outside of London - unless you have roots there. They are all near identikit nowadays with the same chains dominating everything from coffee to gyms.

[worried1]

Definitely not worth it for £300 a month. Is your girlfriend better off by a similar amoint, or is that the total for both of you?

House prices have gone so mental in the SE that the premium in wages for most professions just doesn't make it worth living here. If you are in the small percentage of people who can get into the jobs that only exist in London like banking, then you might earn enough to bridge the difference, but even a lot of employees there aren't doing that well.

If you are not earning mega bucks, you have to really enjoy being in London/SE a lot and it doesn't sound like you're doing that particularly.

Ironically, it is now house prices that are keeping a lot of people in the SE. The price rises have been so severe that those who can afford to own don't want to move out and lose all of the gains they are making from rising house prices. If you own a £300k flat that is going up in value by 20% each year, then you are making £60k untaxed income each year, as much as you would make in a £100k job, for doing nothing.

Of course those rises can't continue and to a certain extent what is the point anyway if you can't use or enjoy the proceeds, but people just don't seem to think like that anymore.

[TheCountOfNowhere]

Yes, you get paid more and can pay most of it out intoi housing. If you are lucky and buy a house at the right time you can then sell, move back opp north and live like a king for the rest of your life.

Is now the right time to move to the SE and buy a house ?

In a word. NO.

Edited March 17, 2015 by TheCountOfNowhere

[Rambo]

1 mile of the hospital means you are in the university and town centre areas, so easy to let round there the landlords and agents do not care, but it's largely the same in west reading atm because of the 'crossrail effect'.

Calcot is cheaper, if you can hack the travel in from there it's worth a look, quite a nice area in general, go as far as thatcham and things get much cheaper, but then you have the commute to live with.

[Son of Taeper]

I guess there may be little advantage apart from money you can earn.

True, if you require cheap, you could always move up to the north east to enjoy your family and friends which may lower property prices in the southeast for those that have family and friends and want to afford a property down there.

It's win / win for all.

[RentingForever]

I grew up in Reading and most of my family still live there. I was recently looking at going back but, same as you, at £40k a year it just doesn't make any financial sense. It's very 'bubbly'.

I'm finding I'm getting priced out of more and more places I used to think of as 'my patch' in the SE :-(

[heffsta]

Ive been in Reading for 9 years now, all rented. I now live in central Caversham 2 bed nice terrace for £975. But looking around rentals here have also gone crazy. I am also in IT and my wife too. Prices here have just gone insane. Crossrail has been hyped the last few months so not expecting any crash here anytime soon.

[Son of Taeper]

Crossrail was always likely to boost prices in Reading.

Maidenhead was the original termination point for some reason (I I believe it was due to the platform that fed the donkey) Prices rose for a while.

Only need to look at Ashford some years back to see why property is in demand .

The warning signs were all out there for anyone that cared to look.

Either way, Reading (East) does have a couple of large players in IT hanging out @ suttons.

[AC44]

It is not worth it for 300/month only.

In Midlands you will be close with family/friends and you probably have a better quality of life. If you both can find a job then you should be settled.

The bubble in SE is ridiculous. I am working remotely and planning to start working from home north so I can get away from this mess.

[dougless]

The OP has raised a very good question. I am starting to think that the South East, let alone London, is hitting the point where more and more people will question the sanity of living here. Its rather like the yeast that creates alcohol, when the level of alcohol gets beyond a certain point it poisons itself.

Reading is getting very, very bubbly at the moment but I think the cross-rail thing is mostly hype, surely the real beneficiaries will be the Eastern Counties which will gain faster access to the West of London.

[streamingfreedom]

It's nice to read these comments and the original post as I often feel like I am the only one thinking along these lines. I am also from Nottingham originally and my wife and I moved down to Reading 4 years ago for work. I really like my job and the salary is a decent £48K but even at this I feel like I am poor. We have just pulled out of purchasing a 2 bed flat due to realising it would be a mistake as too small for our family. That was going to be £210K and we only went down that route due to getting booted out of rented in Sep last year.

Most of our friends who have bought livable houses e.g. 3 bed semis (circa £350K) are working in London on £70K+ and get home about 9pm. Hardly worth it when you can get the same in a decent area in Nottingham for £175K.

My wife would rather stay in this area but I am completely at a loss as to what is keeping this market going. New build 3 bed semi's are now £450K and the flat we pulled out of last week offering £210 in Dec has just gone back on for £217k

Yes the M4 corridor job market is good and you have the option of London but really the actual quality of life is hardly worth the hassle. Traffic is awful in Reading and Wokingham where we live. I have tried my best to explain to my wife that despite having what I consider a good salary we probably will have to move back up North if we want to get out of Renting. We've managed to find a decent 2 bed to rent for £1050pcm.

Our only other thought was to buy a house for £100K in Nottingham to let out and rent down here, at least then we'll have somewhere to live when we retire. I just can't see the prices coming down here somehow.

[Ducky]

The OP has raised a very good question. I am starting to think that the South East, let alone London, is hitting the point where more and more people will question the sanity of living here. Its rather like the yeast that creates alcohol, when the level of alcohol gets beyond a certain point it poisons itself.

Reading is getting very, very bubbly at the moment but I think the cross-rail thing is mostly hype, surely the real beneficiaries will be the Eastern Counties which will gain faster access to the West of London.

Indeed, I did question the sanity of staying in Reading and because of personal circumstances, I decided that after spending 2 years abroad, we could not return.

I liked living in Reading and I had a job I enjoyed, however with two young children and a husband on renewable contracts, my relatively secure job just didn;t pay enough to cope with a possible mortgage, nursery fees, council tax, bills, food etc.

For me it was very difficult to give up my job and I still regret it, but we had little choice. Where we are now, my husband has got a well-paid permanent job that supports the whole family and we can put some money aside every month.

Being a foreigner, I can see how crazy the housing market is in the UK. I come from a town of a similar size to Reading, and at least there is a choice of prices: you can buy a two-bed spacious flat in need of refurbishment for 60K euros, or you can splurge for an attic in the town centre at 250k euros. In Reading, there is no such choice, there is nothing acceptable below 150k GBP at the very least.

Unfortunately our circumstances did not allow us to buy when prices were lower, so we paid the price for something that was out of our control. Our friends who did buy at the time now live in houses that are worth 300k at least. But what can we do?

Maybe if life will become more affordable in the future we will move back, but for the time being we simply cannot afford it.

So, if you are just slightly better off financially but far from family and friends, think hard about whether it is worth it. Best of luck!

[streamingfreedom]

Indeed, I did question the sanity of staying in Reading and because of personal circumstances, I decided that after spending 2 years abroad, we could not return.

I liked living in Reading and I had a job I enjoyed, however with two young children and a husband on renewable contracts, my relatively secure job just didn;t pay enough to cope with a possible mortgage, nursery fees, council tax, bills, food etc.

For me it was very difficult to give up my job and I still regret it, but we had little choice. Where we are now, my husband has got a well-paid permanent job that supports the whole family and we can put some money aside every month.

Being a foreigner, I can see how crazy the housing market is in the UK. I come from a town of a similar size to Reading, and at least there is a choice of prices: you can buy a two-bed spacious flat in need of refurbishment for 60K euros, or you can splurge for an attic in the town centre at 250k euros. In Reading, there is no such choice, there is nothing acceptable below 150k GBP at the very least.

Unfortunately our circumstances did not allow us to buy when prices were lower, so we paid the price for something that was out of our control. Our friends who did buy at the time now live in houses that are worth 300k at least. But what can we do?

Maybe if life will become more affordable in the future we will move back, but for the time being we simply cannot afford it.

So, if you are just slightly better off financially but far from family and friends, think hard about whether it is worth it. Best of luck!

Hi Ducky, Can I ask which country you moved to and where those prices are based on? Yes the Reading market is horrendous. I would say there's nothing suitable under £250k for someone with at least one child.

[Ducky]

Yes the M4 corridor job market is good and you have the option of London but really the actual quality of life is hardly worth the hassle. Traffic is awful in Reading and Wokingham where we live. I have tried my best to explain to my wife that despite having what I consider a good salary we probably will have to move back up North if we want to get out of Renting. We've managed to find a decent 2 bed to rent for £1050pcm.

I can totally relate. The traffic is awful and you feel like you are in one of the most crowded places on earth. I remember driving for work and taking hours to go from Reading to Swindon because of constant accidents and lane closures. Last summer it took me 6 hours to go to East London and return. Slowly, we stopped driving around unless absolutely necessary. We even stopped going to museum exhibitions in London because it was just not enjoyable anymore.

I don;t like where we are living now, but the lack of crowds is refreshing.

[Ducky]

Hi Ducky, Can I ask which country you moved to and where those prices are based on?

Of course you can! I am Italian, not too far from Bologna. The towns are beautiful but have suffered badly with the recent financial crisis and the hosuing market is in a dire condition. Services are still good but there is a lack of jobs. House prices vary wildly: you can get a traditional basic detached house on the hills for 50k euros, or a huge variety of flats in the various town and villages. The flats built in the 1970s or 1980s are usually cheap but you can find a flat that needs some work for 50k euros. You are looking at another 30-50k for complete refurbishment, and due to the type of building techniques, there is less DIY than in the UK.

The rental market is competely shot due to the legislation, mainly, which is quite strict and favour the tenants. Buying is also difficult, due to ownership taxes and more restrictive mortgages then in the UK. However, those who can buy can really find bargains.

Now I live in Cyprus, another country where the housing market is in freefall. Prices have fallen massively, you can get a holiday flat for 40k euros, a villa with pool for 150k euros. Apparently, it is even worse in Spain.

You see, there are reasons for lower prices, but at least there is some choice of prices and type of building.

[Ducky]

You see, there are reasons for lower prices, but at least there is some choice of prices and type of building.

In the sense that even if you don't earn a lot, you can still have the option of buying a cheap flat and delay unnecessary refurbishments. In Reading you cannot do that, there are no cheap flats or houses anymore.

[streamingfreedom]

Of course you can! I am Italian, not too far from Bologna. The towns are beautiful but have suffered badly with the recent financial crisis and the hosuing market is in a dire condition. Services are still good but there is a lack of jobs. House prices vary wildly: you can get a traditional basic detached house on the hills for 50k euros, or a huge variety of flats in the various town and villages. The flats built in the 1970s or 1980s are usually cheap but you can find a flat that needs some work for 50k euros. You are looking at another 30-50k for complete refurbishment, and due to the type of building techniques, there is less DIY than in the UK.

The rental market is competely shot due to the legislation, mainly, which is quite strict and favour the tenants. Buying is also difficult, due to ownership taxes and more restrictive mortgages then in the UK. However, those who can buy can really find bargains.

Now I live in Cyprus, another country where the housing market is in freefall. Prices have fallen massively, you can get a holiday flat for 40k euros, a villa with pool for 150k euros. Apparently, it is even worse in Spain.

You see, there are reasons for lower prices, but at least there is some choice of prices and type of building.

That's interesting to hear and I see your point. House prices are so linked to the economy that a housing crash only comes when the whole economy crashes as well, so everyone loses out in the short term. I no longer believe that prices in the UK will come down significantly as I have lived in other countries where property are even more expensive relative to wages and inequality much higher yet everything functions perfectly well (South Korea). I think people will be surprised at how much worse things can get in the West before iit actually causes real social unrest.

[Ducky]

Prices in Italy never went as wild as in the UK. Even with the property boom of the early 2000s prices didn't double, they went up a good bit but nothing like in the UK due to people going mad and paying whatever price is asked. What really skewed prices was the introduction of the euro, because as you know the Italian government was very lax and prices almost doubled overnight.

I really don't know how things will go in the UK. It seems to me that prices are really getting out of bound even of people who have good jobs. It seems unsustainable and as you asked in another one of your posts, what will happen when people will retire and will still need to rent a place to live because they never had the chance to buy?

There is also the issue of losing skills: since I left the UK I have been called by recruitment agencies every couple of weeks, because apparently there are not enough people with my set of skills. What if even more people with essential professions will leave the area?

Using the housing market as a massive prop for the wider economy without a thought about the consequences is quite short-sighted. However, I am not an economist and as you said, things could get much worse.

[HaX]

I didn't realise that this thread was still active, so thought I'd give you an update

We ended up renting a 1 bed flat by the Kennet and Avon Canal - 10 minute walk from the hospital where my OH works - £975 PCM. The place is finished to a very high spec and is larger than we'd been expecting for a 1 bed. We were paying £600 a month for a mid-range two bed in Nottingham City Centre (Lace Market area). The sweet point for a decent 2 bed in central Reading is £1100 PCM. Further out (Earley etc) I saw some decent 2 beds going for £800 PCM, though due to not being able to drive at the moment need to be fairly central.

Our joint income is £65K per annun (Take home just over £4K PCM). We will be saving £1500 PCM for a house deposit and £300 PCM for travel / holidays etc. Living expenses and entertainment will come to ~£2000 PCM

I'd be quite happy to stay down here long-term, though suspect that we'll be unable to buy anything decent and furthermore will be squeezed by above inflation rent increases heralded by the arrival of Cross Rail in a few years.

[SillyBilly]

Hi there,

Originally from the East Midlands, working in IT, living in Reading and earning £40K Per Annun I've been down here for two years living in a houseshare saving money and clearing debt etc,

Despite the fact that I like my job and the company I work for, I've been very undecided about making any form of long-term commitment to staying here due to the insane cost of living, so until recently have discouraged my girlfriend (nurse earning £25K) from coming down.

Anyhow, she's now got a job and we're looking at places to live within a mile of the Royal Berkshire Hospital. Even 1 bed flats seem to hover at around £900 PCM, and the sweet point for a decent 2 bed seems to sit at £1200 PCM. The majority of flats I've seen below this price point have been disgusting, damp, poorly maintained grot boxes, riddled with mould.

What amazes me most is that the letting agents don't even attempt to disguise the problems, and that the landlords don't feel the need to resolve issues with their properties before putting them on the market.

I've never seen anything like it. Prior to moving down here, I'd spend a good deal of time living in privately rented accommodation in the East Midlands. In general standards were much higher, and of course you got much more for your money. My wage of 25 K was enough to afford somewhere decent and well maintained to live.

If we end up having to rent a £1200 PCM place, I'll only be ~£300 better off than I was in my run of the mill £25K IT job "Up North", which to me isn't worth being away from the people/places dear to me.

What are people's thoughts. Is there any point in being down here? With the exception of it's jobs market, I find Reading to be vastly inferior to somewhere like Nottingham or Sheffield.

Cheers

Hi, I joined because I could have written that post word for word. Thanks for sharing, does make me realise I am/was not the only one banging my head against a brick wall.

I am living in Basingstoke now, orginally from Derby. I was on £26k in my last job and not long out of uni so was a good job all things considered. Anyway, I was offered a decent tick up in salary to work for another company in a more senior role, I was blinded by the initial salary in hindsight which at 25 I thought was too good to turn down. Wrong.

To say I was shocked by the standard of accomodation on offer when I initially viewed properties down here would be an understatement. Absolute dives at ridiculous prices. I am currently living in a one bed studio flat where in the past 3 months alone the washing machine has broke and flooded the kitchen floor, a radiator has packed in, a heater has gone, a wardrobe door has fallen off, fire alarm broke...I could go on and on. Landlord and agency not interested...as if I am the problem. I don't nor have ever had a dustbin at the property...when I consider for what I am paying I could be servicing a mortgage on a decent house in the Midlands I feel sick.

I feel very trapped at the moment, sick of the long commute (sat in traffic on the M4) to and from work, working hard and trying to progress then coming home to a dump. Surely this situation is killing the aspiration of young people? What is the point in working hard?

The schemes put forward by the Cons are a joke as well, 20% off a starter home? Not even close anyway Dave when the VERY cheapest I have seen a new build 2 bed shoebox within FORTY miles of where I work was £260K. These prices are just insane regardless of the cheap gimmicks the government is throwing out. I feel so let down and disappointed. Is it so much to ask, to be a professional earning a decent salary to be able to afford a 1-2 bed flat or house within 40 miles of his job?

The worse thing for me at the moment is a growing jealously (I admit it) and envy of the boomers, my parents included. I know my parents are disappointed in my situation but they just do not comprehend that their gain is at the expense of people younger, children included, I almost snapped when they told me they were considering downsizing and enjoying the "fruits of their labour". I guess I am having trouble dealing with the fact my life will be less prosperous than my parents, sure I will come to terms with it eventually.

Now the rant is over, I can honestly say I am strongly considering emigrating because there is nothing here for me, jobs are down south in my field and the cost of living doesn't correlate to wages. I do not want to leave (and what a waste for the taxpayer who pays for our education and training) but as my field is listed on the skills shortage list in Oz and wages are much higher I might have to take the plunge. Can't be any worse of. Sorry for the long post guys, just needed to get off my chest!

[sleepwello'nights]

I think you're being unduly pessimistic. A quick look on Rightmove shows 93 two bedroom properties for sale in Basingstoke. Ranging from shared ownership houses at £80k to a bungalow on a large plot at £330k. There are some reasonable looking houses at £200-£220k in respectable areas as well as two bedroom apartments around £180-£200k. Granted prices ticked up over the last 12 months, particularly at the lower end of the market. Presumably Buy to Lets.

New builds are definitely more expensive, you could also consider looking further west, prices are lower as you go down the M3 towards the South Coast, except for an uptick in prices around Winchester.

[worried1]

The amount of debt people are prepared to take on now is frightening. When your parents bought in the 80s, they would have probably done so on a 25 year repayment mortgage and planned to have it paid off before retirement.

Now people borrow as much as they possibly can on an IO basis, knowing full well that the interest payment would be unsustainable if rates ever went up. No one cars about that, because they expect that rates won't go up anyway, and that house prices will continue their double digit growth, so it is a risk worth taking.

It is 100% the government's fault for putting these conditions in place, but it has become self-perpetuating because of the greed of the masses. Most people that I speak to who are buying now are doing so for the primary reason of making money rather than getting a roof over their head, and that can't work in the longer term.

This is going to take a long time to unwind, especially given that we have just elected a government who seem intent on ramping house prices further.

[iamnumerate]

The amount of debt people are prepared to take on now is frightening. When your parents bought in the 80s, they would have probably done so on a 25 year repayment mortgage and planned to have it paid off before retirement.

Now people borrow as much as they possibly can on an IO basis, knowing full well that the interest payment would be unsustainable if rates ever went up. No one cars about that, because they expect that rates won't go up anyway, and that house prices will continue their double digit growth, so it is a risk worth taking.

It is 100% the government's fault for putting these conditions in place, but it has become self-perpetuating because of the greed of the masses. Most people that I speak to who are buying now are doing so for the primary reason of making money rather than getting a roof over their head, and that can't work in the longer term.

This is going to take a long time to unwind, especially given that we have just elected a government who seem intent on ramping house prices further.

I disagree a former colleague bought on an IO basis and I don't think she has any comprehension of what she is doing, I doubt that she is a one off.

Edited May 29, 2015 by iamnumerate

[SillyBilly]

I think you're being unduly pessimistic. A quick look on Rightmove shows 93 two bedroom properties for sale in Basingstoke. Ranging from shared ownership houses at £80k to a bungalow on a large plot at £330k. There are some reasonable looking houses at £200-£220k in respectable areas as well as two bedroom apartments around £180-£200k. Granted prices ticked up over the last 12 months, particularly at the lower end of the market. Presumably Buy to Lets.

New builds are definitely more expensive, you could also consider looking further west, prices are lower as you go down the M3 towards the South Coast, except for an uptick in prices around Winchester.

Possibly, but at £40k wage the very cheapest at your £200-220K range is still greater than 5 times income, what is there to be optimistic about? I feel quite aggreived to have to get myself into that sort of debt for a "starter" home. If I am struggling and I earn probably double most people my age then I can't see how others are managing?

BTW I am living in Basingstoke as it is the cheapest place at a point where the commute is not too crazy and the prices aren't on the moon. I can't go any further south and still get to work in under an hour (often way over now and I live 25 miles from work). Basingstoke is the cheapest place I can live and still average an hour or so into work.

I can't say I have seen more than a handful of properties come on the market at less than £180k (non-shared) which weren't in terrible condition, very bad area or 1 bed rabbit hutches where you can't swing a cat. I just can't justify that sum of money for that sort of accomodation. Again, maybe just my frustration boiling over..