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uncle_monty

What Price For A "typical" Life In The South East

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How much capital would one need to obtain and sustain the trappings of a typical "middle class" lifestyle in London and the south east these days compared to pre-HPI boom days i.e. pre-1997? By this I mean the following (and I know its subjective, but this is my view):

1. 4 bed detached house in the shires. Modest mortgage that can be repaid easily from one income over 25 years. What equity would be needed to make this viable?

2. 2 cars. One a four door saloon (say Audi), the other a smaller hatchback (VW, Ford, etc.). Owned for 2-3 years, then buy new models.

3. 2 parents and 2.4 children. One housewife(husband), the other a full-time worker "in town" somewhere. Tricky call on relative tax rates v the past.

4. Children and "good" schools. They will be supported through to graduation, so at minimum uni fees will need to be paid. Add much, much more if public school is on the agenda.

5. 2 family holidays per year. Ample excursions / hobbies for the brats (music, horses, skiing, etc).

6. "Nice" food, good wine, plenty of of entertaining (dinner parties, restaurants, nights out "in town", etc.)

7. Retirement at 55-60. Final salary pension for the main breadwinner.

8. Other "typical" middle class trinkets and bling [no idea what, I don't have any].

9. Limited or very little unsecured credit. Basically just mortgage.

Can't think of anything else. Have I missed anything obvious?

My guess is that you'd need to be a millionaire to have this these days.

Thoughts? Would also be interested to hear estimates for other regions.

Monty

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How much capital would one need to obtain and sustain the trappings of a typical "middle class" lifestyle in London and the south east these days compared to pre-HPI boom days i.e. pre-1997? By this I mean the following (and I know its subjective, but this is my view):

Not sure about capital but it sounds like a minimum of 90-100k a year to me.

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Interesting thread.

I think it all depends on where you want to live in the SE. Somewhere like Esher or Sevenoaks and a decent 4 bed detached house will be over £1m to start with. Move a bit further out, and you could buy one for more like £400k.

I don't understand how anyone on non-banker money can support this type of lifestyle on a single salary, but if you are prepared to live in one of the cheaper areas, I think it could be done on £120k pa as long as there were sufficient savings and capital to get things started.

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I think you have got to be looking at £100k. To do it comfortably that is. (Added, and that is assuming that you have a little help from Mummy and Daddy when you buy your first house)...

If you can't manage that on £260k, then I am amazed. You must be doing something wrong!

Edited by t350chunder

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This is a trick question.

The type of lifstyle you can expect in the UK has nothing to do with how hard you work or how much you earn, but who you know and whether you bought property before 2000. :angry:

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my wife and i lived in kingston on thames

we earned 150k between us

for that, we got no where near the lifestyle you describe

two oldish cars....nothing fancy at all

no kids

one holiday a year...northing fancy

average 1930's house - cost 400k.......100k deposit, mortgage was 1800pcm over 25 years

saved 400pcm into isa's

that was is

nothing left after that

i know people earning upwards of 250k who don't get close to the lifestyle you mention

what a wonderful nation we live in

Edited by jmzr

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Infamous article on this subject...

http://www.timesonline.co.uk/tol/comment/c...icle1400086.ece

Upward of £500,000 a year.

You may imagine its in The Times, but that is obviously an optical illusion because everyone at The Times Saw It Coming and never had any truck with the disgusting and shameful rampant consumerism and greed that marked the height of the deeply unwise debt-based la-la-land economic boom.

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None of that sounds very 'typical' to me, it sounds very clearly upper middle class.

As has already been pointed out, the rules pre-housing bubble were entirely different, but let's say that we're talking about someone whose first step on the ladder was or will be at current house prices & that these will not decline further relative to earnings....

Even so, of course, house prices are the key... at a pinch you could do all that [possibly minus the horses, and with modest holidays] on maybe £60-70k single income if you were living in, say, Hayward's Heath [especially if your employer pension contributions were generous and probably assuming that there's a second income in the early says of the marriage to help build up some savings and/or housing equity], but to do it in, say, Sevenoaks as has already been pointed out you'd need easily double that and very probably more, certainly at least triple if you want a genuinely nice house rather than a functional post-war one.

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Friend of mine lives in London, bought the house in 1994. Two kids through a top public school, day rates only. Never had a new car whilst that I have known him.

He told me he had to earn 100K a year just to pay the bills and that was 4 years ago.

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Not really a question of capital but my thoughts on income are:

1. 4 bed detached house in the shires. Modest mortgage that can be repaid easily from one income over 25 years. £700,000 mortgage @ 5% say £50,000 p/a including repayment

2. 2 cars. One a four door saloon (say Audi), the other a smaller hatchback (VW, Ford, etc.). Owned for 2-3 years, then buy new models.

Say £5,000 depreciation for the Audi and £2,500 for the VW, add in a £2,500 running costs and say £10,000 total

4. Children and "good" schools. They will be supported through to graduation, so at minimum uni fees will need to be paid. Add much, much more if public school is on the agenda.

Anything from £5,000 to £50,000 p/a; lets say £10,000

5. 2 family holidays per year. Ample excursions / hobbies for the brats (music, horses, skiing, etc).

Lets say £5,000

6. "Nice" food, good wine, plenty of of entertaining (dinner parties, restaurants, nights out "in town", etc.)

Say £100 p/w for shopping and another £100 for nights out. £10,000

8. Other "typical" middle class trinkets and bling [no idea what, I don't have any].

Say another £10,000; things like redecoration, carpeting etc.

About £95,000 p/a net income or something ITRO £150,000 gross p/a.

That's not even particularly extravagant. 3 kids in private schools and you'd need to find another £30,000 - £40,000 p/a net.

Obviously the main driver here is the mortgage. You could get away a house worth perhaps £600,000, but depending upon where you are you could spend £900,000+ quite easily.

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my wife and i lived in kingston on thames

we earned 150k between us

for that, we got no where near the lifestyle you describe

two oldish cars....nothing fancy at all

no kids

one holiday a year...northing fancy

average 1930's house - cost 400k.......100k deposit, mortgage was 1800pcm over 25 years

saved 400pcm into isa's

that was is

nothing left after that

i know people earning upwards of 250k who don't get close to the lifestyle you mention

what a wonderful nation we live in

150K at 40% tax - net take home 90K = 7.5K per month to spend.

less mort 1800 less isa 400 = 5300 pounds left per month.

You either have a trophy wife or a serious gambling habit.

My advice to you is to make a budget and track all of income and expenditure to see where it is all going.

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my wife and i lived in kingston on thames

we earned 150k between us

for that, we got no where near the lifestyle you describe

two oldish cars....nothing fancy at all

no kids

one holiday a year...northing fancy

average 1930's house - cost 400k.......100k deposit, mortgage was 1800pcm over 25 years

saved 400pcm into isa's

that was is

nothing left after that

i know people earning upwards of 250k who don't get close to the lifestyle you mention

what a wonderful nation we live in

Don't be such a d1ck.

If you're a couple earning £8k a month NET with no kids and only an £1800 pcm mortgage you should have between £4-5k savings per month.

If not, you must be a buffoon of the highest possible buffoon order.

If you are incapable of saving more then it should be taxed from you. You're taking the p1ss.

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How much capital would one need to obtain and sustain the trappings of a typical "middle class" lifestyle in London and the south east these days compared to pre-HPI boom days i.e. pre-1997? By this I mean the following (and I know its subjective, but this is my view):

1. 4 bed detached house in the shires. Modest mortgage that can be repaid easily from one income over 25 years. What equity would be needed to make this viable?

2. 2 cars. One a four door saloon (say Audi), the other a smaller hatchback (VW, Ford, etc.). Owned for 2-3 years, then buy new models.

3. 2 parents and 2.4 children. One housewife(husband), the other a full-time worker "in town" somewhere. Tricky call on relative tax rates v the past.

4. Children and "good" schools. They will be supported through to graduation, so at minimum uni fees will need to be paid. Add much, much more if public school is on the agenda.

5. 2 family holidays per year. Ample excursions / hobbies for the brats (music, horses, skiing, etc).

6. "Nice" food, good wine, plenty of of entertaining (dinner parties, restaurants, nights out "in town", etc.)

7. Retirement at 55-60. Final salary pension for the main breadwinner.

8. Other "typical" middle class trinkets and bling [no idea what, I don't have any].

9. Limited or very little unsecured credit. Basically just mortgage.

Can't think of anything else. Have I missed anything obvious?

My guess is that you'd need to be a millionaire to have this these days.

Thoughts? Would also be interested to hear estimates for other regions.

Monty

In the south west, we manage most of that with the wife working part time.. to do it on a single income would take at least £50k. Apart from the 'retirement at 55-60' bit; I suspect very strongly I'll be working in some capacity till I'm at least 70.

Mind you, both cars are 8 years old and we haven't had an expensive holiday for years.

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Don't be such a d1ck.

If you're a couple earning £8k a month NET with no kids and only an £1800 pcm mortgage you should have between £4-5k savings per month.

If not, you must be a buffoon of the highest possible buffoon order.

If you are incapable of saving more then it should be taxed from you. You're taking the p1ss.

agreed.

Following on from earlier commentes, someone who is now 40 years old and who bought their main family home at the age of 30 in 1999 at the prices prevailing then, could have a very nice lifestyle indeed in the south east on £70k single income, albeit with modest holidays, definitely no horses, clearly state schools only, fairly modest cars.

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With our combined income of £260k we struggle to get anywhere near that.

I can believe that.

One couple I know were on similar money and managing to fund the lifestyle (self-employed with about £300,000 mortgage); but the business dried up and their limited savings disappeared very quickly.

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Not really a question of capital but my thoughts on income are:
1. 4 bed detached house in the shires. Modest mortgage that can be repaid easily from one income over 25 years. £700,000 mortgage @ 5% say £50,000 p/a including repayment

2. 2 cars. One a four door saloon (say Audi), the other a smaller hatchback (VW, Ford, etc.). Owned for 2-3 years, then buy new models.

Say £5,000 depreciation for the Audi and £2,500 for the VW, add in a £2,500 running costs and say £10,000 total

4. Children and "good" schools. They will be supported through to graduation, so at minimum uni fees will need to be paid. Add much, much more if public school is on the agenda.

Anything from £5,000 to £50,000 p/a; lets say £10,000

5. 2 family holidays per year. Ample excursions / hobbies for the brats (music, horses, skiing, etc).

Lets say £5,000

6. "Nice" food, good wine, plenty of of entertaining (dinner parties, restaurants, nights out "in town", etc.)

Say £100 p/w for shopping and another £100 for nights out. £10,000

8. Other "typical" middle class trinkets and bling [no idea what, I don't have any].

Say another £10,000; things like redecoration, carpeting etc.

About £95,000 p/a net income or something ITRO £150,000 gross p/a.

That's not even particularly extravagant. 3 kids in private schools and you'd need to find another £30,000 - £40,000 p/a net.

Obviously the main driver here is the mortgage. You could get away a house worth perhaps £600,000, but depending upon where you are you could spend £900,000+ quite easily.

Good post

Going back to the OPs "how much capital?" question

Goat's non-housing related expenses are £45,000 pa (net) - so lets say £60k gross

Index linked annuities are about 3.7% for a 60 and 4.5% for a 65 yo, so lets assume a generous 3% for a 40-50 yo

You need capital of house cost + £2m = about £2.5m-£3.0m

It goes down a bit once you've kicked the kids out though...

....if you don't spend on cars or kids you've halved your outgoings...

Looks like we'll all be wage slaves a while longer... ;)

(Edit: this ignores the benefits of any final salary pension scheme, which change the calculation hugely)

Edited by Neverland

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I don't think retirement at 55-60 is a realistic middle class aspiration, nor do I think 2.4 kids is the norm. Equally I think perhaps 50% are dual income these days..... to provide for the family in the way you suggest ( leaving aside the retirement piece) I'd say something like a post tax income of £100 K-£120k should do it... now what that is gross depends on how its earned and whether its one or two earners etc.

Looking at that kind of income level tells you that maybe what you have described isn't middle class... by the by the biggest costs in there are not going to be housing I suspect. Cut the p[roperty price back by 30% and the numbers I doubt will be markedly different.

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....someone who is now 40 years old and who bought their main family home at the age of 30 in 1999 at the prices prevailing then, could have a very nice lifestyle indeed in the south east on £70k single income, albeit with modest holidays, definitely no horses, clearly state schools only, fairly modest cars.

it is genuinely astonishing, i know it's the raison d'etre of the site & as such hardly needs pointing out for the zillionth time, but:

average male full time salary: jan 98 22k; jan 98 35k (increased by just over a half, i.e. 60% growth)

average pwoperdee price: jan 98 70k; jan 08 200k (almost tripled, 185% growth).

for the young, under this government, living standards have been cut to ribbons in this country.

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