(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

[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".