In September, due to sneaking roommate incompatibility with one of the three friends I lived with, I found myself looking for my own apartment. The other two friends and I made vague plans to move in together after their lease ran out, so I settled for a cheap bedsit (tiny room, shared WC) as a short-term solution.
After a month here, I’ve discovered two things:
I hate my tiny cheap one-room flat. I hate sharing a shower/toilet with five other rooms (including a family), I hate that there isn’t an oven, I hate that I can’t have anyone over because the bed takes up 70% of the floor space, I hate that I have exactly five pairs of shoes and there still isn’t enough room for them.
Living alone, however, is awesome.
So I thought I’d start looking for a proper flat of my own instead of this short-term situation.
Facts: I make £1440/month after tax. How much of this is reasonable to spend on accomodation? I’d like to stay in northwest London if possible. Obviously it’s one of the most expensive property markets in the world, but I should be able to find a place where I can make cinnamon rolls and fit more than one friend over at a time and have more than two feet of wardrobe space, shouldn’t I?
I work in rental property management in New Jersey. We estimate 1/3 of your net income, but occasionally let people go up to 1/2. So you should be looking for a place around 480 to 720 pounds.
The most I’ve spent was exactly 45% of my income (I was making 1000$/month at the time); I still managed to save about 10% of my income, though. Except for that time I’ve never spent more than 25%. The 1/3 figure is cited by banks and ministries in Spain as the upper limit anybody should spend. I think you need to figure out how much you need for other expenses before you can really tell.
Are these all for urban-ish areas? I have the idea that you should expect to spend more if it’s in a really in-demand market, but that could be a misconception.
According to this budget calculator, I spend about £600/month on food/transport/leisure. Which leaves around £750 (or less) for accommodation to keep putting 10% into savings, right?
I live in a not-entirely-salubrious (but still fine for me) bit of East London, and currently spend 24% of my take-home salary on rent. If you’re willing to look a bit further out, rents do fall a little.
However, getting a flat of your own, as opposed to sharing with people, is always going to be far more expensive. I couldn’t afford to do that and save anything, since I’m paying back student loans. The sweet spot in rent per head appears to be 3-4 people, from our investigations a couple of years ago.
This is a good point. Keep in mind that housing includes more than just rent or mortgage payment. Utilities, repair, maintenance, etc. all need to be included in that cost.
The last time I calculated it I was spending around 20% of my take home pay on housing.