(no subject)

[nmg]

I live in Southampton. I am a postdoc researcher in academia. I earn somewhere in the region of £25K. I do not own a house. The thought of buying a house at today's inflated prices fills me with terror, quite frankly.

As a consequence, the ramblings of idiots like this are apt to provoke apoplexy in me. How on earth can he be earning £45K, live in shared accommodation, and yet have only £5K in savings? There's plenty there for mortgage payments and a pension - what on earth does he spend the money on? How can he have failed to put together a deposit on a salary like that?

Comments

[ravenchild.livejournal.com]

he looks like he takes crack :P that could be it? hehehe

[hsw.livejournal.com]

How can he have such an amazingly inaccurate idea of what his mortgage payments would be? Or what does he reckon a 'nice area' is?

We moved to Stepney at least in part so we could save extra and thus afford a deposit, and it worked. Hell, we considered buying the Stepney flat the first year the landlord came back and got it valued at 60K (a missed opportunity, in retrospect, but they never put it on the market).

Last year, at least one nice place round the corner from Stepney Green tube cost 120K. I seem to remember it was a period place with garden and two or three bedrooms. I reckon that would be less than 800 quid a month. Or you could go outside the centre instead.

Bah!

H

[daveon.livejournal.com]

Or what does he reckon a 'nice area' is?

The rule of thumb I use is does my wife feel safe walking home alone. She's South African and accutely nervous about areas and being by herself. Even to the extent of locking the car doors regardless of where she is.

It's an individual thing.

I can't speak for this guy but I can certainly see how £45K doesn't go far.

[ewx.livejournal.com]

London might be expensive, but I don't believe it's that expensive. I hope his employer aren't trusting him with too much of their budget...

[vyvyan.livejournal.com]

I know what you mean. I managed to save money even as an undergrad living on a grant of 3K...

[daveon.livejournal.com]

How can he have failed to put together a deposit on a salary like that?

Frankly, pretty easily to be honest.

It depends on many factors, including what your basic level of debt is and the other costs associated with buying a place. It's not just the mortgage or deposit. You've got Stamp Duty, legal fees, survey and a shed load of other things. Assuming a £150K property - which will be a 1 bed in a partof London you might not want to live in, then you're looking at £11K+ to get a 95% mortgage and move in. Sure he might be able to put aside £1K a month but I know I couldn't, not with my rent and supporting a partner in a second degree.

Sad as it sounds your outgoings do expand to swallow your income. When I was earning £12K I thought £25K was a fortune. At signficantly more than that you find yourself working harder and going out for more meals and so forth.

Sure you probably could economise more, but you might be working in a way that makes it unpalatable.

[ewx.livejournal.com]

I'm only marginally older than that guy; the combination of my salary and LNR's comes to somewhere not so far from his; and yet I have savings left over from not only paying the deposit on a house but also spending the immediately following year unexpectedly unemployed. (And we're paying into pension plans, too.) I really don't have any sympathy for him - the thing that makes it difficult for him to buy a house is not stamp duty but his own failure to save up.

If he was supporting someone through university, or something like that, then my opinion would be quite different, but he doesn't mention any such thing.

[professoryaffle.livejournal.com]

As previous people have said if he has an substantial amount of debt which is plausible and likes to spend his income then its plausible he won't have enough for a deposit but still when earning that quantity which must be a take home of £2000+ so not be saving more he is probably doing something wrong

He comments about pensions suggests his company probably offer a crap pension schema but he doesn't have the where withall to actually go and find a better one

he though doesn't irritate me as much as this person though Higher rate taxpayer speaks out

[nmg.livejournal.com]

From the calculations I made, his take home pay after tax and NI is in the region of £2600pcm.

The article says that he spent several years paying off his student loans. He's 29, so he would most likely have graduated from university a couple of years after myself, at which point the Student Loans Company were still running the show. There are details on the maximum amounts and the APR for each year on this page provided by the SLC. (there's also some information on the maximum maintenance grants during the same period at the DfES)

Okay, so let's assume that he studied in London and took out the full loan amount (£4010 over three years). His monthly repayments, if he chose to spread them over 60 months and not defer, are in the region of £80 - hardly crippling.

This does suggest that he'd taken out loans other than his student loan (career development, or the like).

Looking at his other outgoings, I note that a typical rental price for a large three bedroom house on a quiet street (such as that described in the article) would be in the region of £2000pcm (I found a house in Hampstead for £450pw). Split three ways, that's £650 each, which still leaves a shade over £1900 in his pay packet each month for other expenses.

You're right, he is doing something wrong...

(and yes, the higher rate taxpayer makes me fairly seethe)

[daveon.livejournal.com]

Can't say where he lives but £600 ish sounds fair enough.

If you're in a career type job in London other things creep up on you. He might run a car, in which case, probably write off another £400 a month.

Allow £100 a month for food, lunch and sundries, and we're down to £1100 left. That would take then about 18 months for saving a deposit on a house, if you are really serious about the budget.

But if you're 29 earning 45K a year in London you're probably expected to do some serious apres work smoozing, in which case you can easily write off another £100 a week in drinks and the odd meal.

Which suddenly is £700 left a month. Maybe take a foreign holiday, or a skiing holiday - which I grant is somethign you could eschew for a year or two, but at £600(ish) a month you're looking at 2 years of saving for a £160K place - if you are saving alone.

Sure, you could spend less, save more, but based on my experience working in London firms at that sort of level and seeing my sister and brother-in-law. If you ignore the stuff that costs a lot you're likely to find your future career prospects harmed.

You *could* save more and do it faster, but there is a difficult equation to juggle with if you are living in that sort of "space".