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tyres

What Percentage Of Your Income Goes On Housing?

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From the conversation on this thread

That's the assumption in the latest figures from think tank Resolution Foundation, which show that lower- and middle-income households are spending 26% of their salaries on housing, compared to 18% back in 1995. In London, households spend 28% of their income on housing.

The think tank said this is the equivalent to adding 10 percentage points onto income tax.

....26%?! And the rest! If people were really only spending 26% of their income on rent, then they're laughing - will be able to put away 25%+ in savings each month. I think it's more like 45% or 50% for a lot of renters / mega-mortgagers. Or are they doing some crude "average" with the stats i.e. including mortgage free and children (lol)?

I was wondering what percentage of your income (take home pay) goes towards rent / mortgage?

For me its close to 50%, living in Cambridge :/

Edited by tyres

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Guest BillyNI

Is that salary (pre-tax) or take home pay?

I was assuming we are taking take home.

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That rise from 18% in 1995 to 26% today seems to be a very conservative figure when you consider whats happened to earnings v house prices in that time period.

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Guest BillyNI

That rise from 18% in 1995 to 26% today seems to be a very conservative figure when you consider whats happened to earnings v house prices in that time period.

My experience of London is that it is a much greater sum than 26%. I think these numbers might be being heavily skewed.

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I'm very sceptical of the article because I hate it when the media uses a think tank to justify their story as it appears to give some legitimacy to their mindless dribble. So Resolution foundation has a slogan "Analysis and action on living standards" you can tell RF had their opinion a long time ago and the data they use will support that view. RF is based in Westminster so I wouldn't be surprised if this was a lobbying campaign and they sponsored that media outlet to write about their agenda (maybe I go too far with that)

As for my opinion, I suspect its more than 25% too.

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20%

That figure doesn't mean much by itself though. So many other variables: mortgage term, single/dual income, interest only/repayment etc.

I've overpaid, and been at a higher percentage in the past and will likely do so in the future (once I stop having to pay £500 childcare a month).

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15% joint take home. London mortgage. 18.5% if it's just me. Probably less since I round down our joint take home buy a few hundreds. Mrs. varies her income on monthly basis depending on her rota.

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Years of reading HPC and I've felt like someone who wastes money compared to some on here but finally a thread where I can proudly proclaim that I "only" spend 15% of my take home pay on rent every month.

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SVR 1995 was 8%.

Average real house price 1995 ~£90k.

Average wage 1995 £17,470 gross.

Can someone work that out against today?

Other costs CT, insurances and repair and decoration...standing charges for utilities.

Edited by winkie

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This is a bit meaningless without location.

The very lowest priced 3 bed box within a sensible distance of me is £1,300 pcm - i.e £15,600 per year.

add in council tax and you are up to over £17k p.a

That requires the following salary:

10% of wages £300k

20% of wages £140k

30% of wages £85k

40% of wages £60k

50% of wages £46k

I can't see many 30 year olds round here earning £85k.

The whole place is screwed.

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14%

One bed flat by myself

Edinburgh

But that number is only so low because I am fortunate to earn a lot. If I was the 'average' Edinburgh earner you would be looking at more like 30-35%.

And for context - I spend more than 14% on booze/going out per month.

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