Rents Rise 8 Times Faster Than Wages

[TrevorS]

I'm surprised. None of them above 40%, let alone a 1980s-style sixtysomething percent.

Indeed, those numbers are broadly in line with healthy continental markets of the 1980s, where conventional wisdom said you pay one third of your income on rent.

These Evening Standard pieces are usually respresentative of a narrow demographic (friends of the young journos writing them). They did have a recent series on how life is for those near the bottom (working poor) but it was trumpeted as a Standard crusade for something or other, so the piece was polluted with self-puffery.

[Dorkins]

I'm surprised. None of them above 40%, let alone a 1980s-style sixtysomething percent.

Indeed, those numbers are broadly in line with healthy continental markets of the 1980s, where conventional wisdom said you pay one third of your income on rent.

It's healthy to pay a third of 2 full time incomes to rent a 1 bedroom flat?

[worried1]

The observations of Dr Tim Leunig at http://www.insidehousing.co.uk/ihstory.aspx?storycode=6502805 sum it up for me:

"Building another mile of housing around London would, with standard suburban planning densities, create housing for around 1 million people. It would mean that someone leaving London on the A40 or the M11, or on a train to Brighton or Basingstoke, would have to travel through suburbia for an extra minute. No doubt those people would prefer to travel through countryside for that minute, but it is hard to think that one extra minute of suburbia is a high price to pay to see 1 million people properly housed.

Just as Surbiton makes little difference to the people of Wimbledon, so an extra mile of suburbia would make little difference to the people of Surbiton."

That link makes an interesting read.

I agree overall, but I am not sure the example is a good one. As a resident of Surbiton, I can confirm that an extra mile of suburbia would make little difference to me, but what about the residents of Esher and all of the other areas that are actually already built there?

People live in places like Esher precisely because they want to be in lower density suburbia than somewhere like Wimbledon or Surbiton. They are happy not to have all of the facilities on their doorstep, but they want a bit more land and extra privacy and are prepared to pay dearly for that. I don't think they'd much like a lot of infill to bring up the density.

In reality, on the Surrey stretch at least, London surburbia stretches right down to Guildford, although most residents would never admit to living in a suburb (anyone remember the phrase ruburbia that was coined a few years ago?). Sure, Esher and Weybridge aren't highly populated, but most of the land is actually taken up by residential properties, it is just more of it is laid to gardens and long driveways than actual houses.

Putting a mile of suburbia around the the 'edge' of London that far out would be interesting, and would hold a lot more than 1 million extra people!

[winkie]

Anecdotal I know but I'm seeing a lot of property that stays unlet month in month out in ealing. Usually agents/LL asking way too much.

.....waiting for the greater fool..........tell the boss, you want me, pay my rent will forfeit the bonus.

[@contradevian]

Funny because the type of flat I used to rent in E16 ten years ago is only £25 a week more now

http://www.rightmove.co.uk/property-to-rent/property-38877490.html

[winkie]

Funny because the type of flat I used to rent in E16 ten years ago is only £25 a week more now

http://www.rightmove.co.uk/property-to-rent/property-38877490.html

......looking at that block, it is not only the rents that have fallen the selling prices have as well.....so much for London property prices immune to price drops.

[@contradevian]

......looking at that block, it is not only the rents that have fallen the selling prices have as well.....so much for London property prices immune to price drops.

When they were new they were typically bought off plan for £250k for the two beds and about £150k-190k for the one beds, That would be around 2000

http://www.rightmove.co.uk/property-for-sale/property-38051848.html

I don't think thats a particularly good "investment."

[The Ayatollah Buggeri]

How long can it go on?

Until there is meaningful, significant scale downward pressure on housing benefit.

[Venger]

4 in 10 Londoners fear falling behind on their rent or mortgage

Published: 24 June 2013

Millions of Londoners fear they will get into arrears on their mortgage or rent next year, a survey has found.

http://www.standard....ge-8670825.html

[btl_hater]

How much of Londoners net salary is going on housing — and if they think they will ever be able to buy their own home

Here are seven answers

Which begs the question, why does HPC.co.uk not have over 1000 viewers every day? I can't believe this site isn't overflowing with thousands of pissed off under 35s tbh. Maybe 99% of them don't care?

[TrevorS]

I agree overall, but I am not sure the example is a good one. As a resident of Surbiton, I can confirm that an extra mile of suburbia would make little difference to me, but what about the residents of Esher and all of the other areas that are actually already built there?

People live in places like Esher precisely because they want to be in lower density suburbia than somewhere like Wimbledon or Surbiton. They are happy not to have all of the facilities on their doorstep, but they want a bit more land and extra privacy and are prepared to pay dearly for that. I don't think they'd much like a lot of infill to bring up the density.

In reality, on the Surrey stretch at least, London surburbia stretches right down to Guildford, although most residents would never admit to living in a suburb (anyone remember the phrase ruburbia that was coined a few years ago?). Sure, Esher and Weybridge aren't highly populated, but most of the land is actually taken up by residential properties, it is just more of it is laid to gardens and long driveways than actual houses.

A friend of mine lives in Cobham, in a nice house with large garden, alongside similar. Several years ago the farmland at the back was sold and redeveloped as housing. The housing was higher density than existing, and included social housing. The residents fought bitterly and lost.

He was afraid of the change but there have been no problems and now he is reconciled with sharing the land and still lives there. The residents of Esher would have to learn to share. If they can't accept change then they can always move. Relaxing or removing planning restrictions could enable them to recreate their lower-density suburbs a mile further out again.

It depends on what you see as priorities. For me, building new homes in areas where they are needed (like previous generations did) is a higher one than not disturbing the good people of Esher.

Ludicrous to suggest London suburbia stretches down to Guildford. A look at a map shows vast stretches of countryside from Chessington and Epsom all the way. Guildford is within the London commuter belt due to rail services, but that is not the same thing at all.

[MARTINX9]

......looking at that block, it is not only the rents that have fallen the selling prices have as well.....so much for London property prices immune to price drops.

East London remains relatively affordable. - and there are nice parts (e.g. E4/E11/E18)

My sister rents a top floor newish flat 30 seconds walk from the central line tube with a parking space and balcony - her landlord has only raised her rent by an average of £10 a month for the last seven years (i.e. an increase of under 1 percent). The effective rent (when compared to a mortgage i.e. netting off the £130 service charge her landlord pays) - is £770 whereas the flat is probably worth about £240,000 (which with a £30k deposit say would cost £1100 a month based on a typical 5 year fixed rate even now).

So she would pay nearly 50% more a month to buy it - before maintenance, warranties on the utility goods/boilers her landlord pays for.

She is a good tenant, there is no letting agent involved and he wants to keep a good tenant.

[@contradevian]

How long can it go on?

Margaret Thatcher said that an increased housing benefit bill was a price worth paying for market rents (when she removed rent controls in the 80's). That has been the policy ever since, even though its slowly bankrupting the State.

Edited July 22, 2013 by aSecureTenant

[@contradevian]

East London remains relatively affordable. - and there are nice parts (e.g. E4/E11/E18)

My sister rents a top floor newish flat 30 seconds walk from the central line tube with a parking space and balcony - her landlord has only raised her rent by an average of £10 a month for the last seven years (i.e. an increase of under 1 percent). The effective rent (when compared to a mortgage i.e. netting off the £130 service charge her landlord pays) - is £770 whereas the flat is probably worth about £240,000 (which with a £30k deposit say would cost £1100 a month based on a typical 5 year fixed rate even now).

So she would pay nearly 50% more a month to buy it - before maintenance, warranties on the utility goods/boilers her landlord pays for.

She is a good tenant, there is no letting agent involved and he wants to keep a good tenant.

Sounds about right. I was paying £850 pcm just over ten years ago for a flat worth £250k in E16. They don't seem to be much more now. I know however that the landlord paid a lot less off plan.

Its better if no letting agent is involved, they slowly poison the relationship between landlord and tenant.

Edited July 22, 2013 by aSecureTenant

[Superted187]

East London remains relatively affordable. - and there are nice parts (e.g. E4/E11/E18)

My sister rents a top floor newish flat 30 seconds walk from the central line tube with a parking space and balcony - her landlord has only raised her rent by an average of £10 a month for the last seven years (i.e. an increase of under 1 percent). The effective rent (when compared to a mortgage i.e. netting off the £130 service charge her landlord pays) - is £770 whereas the flat is probably worth about £240,000 (which with a £30k deposit say would cost £1100 a month based on a typical 5 year fixed rate even now).

So she would pay nearly 50% more a month to buy it - before maintenance, warranties on the utility goods/boilers her landlord pays for.

She is a good tenant, there is no letting agent involved and he wants to keep a good tenant.

Doesn't this mean that it was affordable 7 years ago when your sister first rented it?

If it was advertised for renting now you can bet that the LL would be asking for a lot more pcm.

Sounds like your sis is a good tenant and has a good relationship with her LL

[PopGun]

How long can it go on?

So long as there's enough idiots prepared to pay a premium to live in the center of the universe.

[PopGun]

Greed is pretty easy way to explain it.

aka speculation fueled by low interest rates enjoyed by the spivs. Houses have long ceased being homes.

[Dorkins]

So long as there's enough idiots prepared to pay a premium to live in the center of the universe a place they might be able to find a job.