The London Rent Trap – Is it Worth it?

£150,000 might be just enough for you to buy a single studio flat in 2017 it seems. As for a modest family home, think more like £400,000+. It is little surprise most of us are forced to rent for most of our time in London. Higher salaries mean plenty of us do achieve the dream somewhere around Zone 3. However, how much money seeps away throughout our twenties with nothing material in return?

The Rent Numbers

Most of us are lucky to get a reasonable place for under £200 per week, definitely under £150. The interesting thing about browsing agents and rooms is that there seems to be a threshold that, although very high, offers a lot of options once you reach it. This means you are unlikely to find anything good and reasonably central for less, but it does mean you can live in some really good central places when you are prepared to pay that much. Even South doesn’t seem the land of £2 pints and cheap rent many of its longstanding residents claim. It would appear you have to go as far as Croydon to see real difference.

The Experience

Despite this, living in London is unique. This is a time when we are as close to complete freedom as we will ever be with no major commitments besides keeping a roof over our head. We need not list the obvious things that make living in London great, but it is fair to say you won’t have many of these if and when you relocate.

Better job prospects. Better nightlife. World-leading talent all around you. ‘Buzz’- you can’t quite define it but you know it’s there. We may not get bricks and mortar for our payments, but we do get a return for our investment.

For many of us, renting is a very necessary evil. You hopefully get a good place in a good location with very little commitment besides your contract.

The downside? You feel pressured to make the most of this. If your location is costing £30 per night (£200/7 days) you want to know every barman, DJ and chef in the area- which costs you. What you don’t want to be doing is lying in bed watching box sets- except that is probably exactly what you want to do most of the time. There seems an irony in paying more for a reasonably luxurious place- seeing as landlords will keep a place renovated to keep rents up- when ultimately you need to spend most time out of it for work and leisure.

The Solution?

Enjoy London while you can. The dream model is probably the majority of your twenties in shared rented accommodation- which does unfortunately amount to some £100,000 over ten years in broad terms. But in that time you will climb the ladder, meet people and have a great time doing it. Most importantly you will find out if you want to stay, by which point you might be capable of getting a mortgage, perhaps with additional support from family for a deposit.

Don’t give up on dreams of Zone 1, but remember that with most of your time at work or at home with partners, a slightly longer commute might just be the answer. Moving out to the home counties might be submitting to defeat, but within reach of London with bigger savings, you might just prefer it.

 

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