Okay, so you need to rent a place to live in London. You’ve no doubt heard all the horror stories about how expensive it is to live in the UK capital, and undoubtedly you need to work out if you can really afford the rent to live here.
No-one’s going to pretend that London’s not an expensive place to live. But let’s face it, hundreds of thousands of normal people manage to do it. And with a little creativity, so can you. So let’s take a look at the essential things you need to know and understand about renting in London.
How much rent can I afford?
This is step number one, and the most important thing you need to fully understand before you go any further. Ask yourself the question: How much of my monthly income should I be looking at spending on rent?
After income tax is taken into consideration (you can work this out using this tax calculator), you should be aiming at spending no more than half of your wages on rent.
In reality, less would be better, but in London, you may have to sacrifice a little more than if you were living in other parts of the UK. Work out the figure of 30%-50% of your net wages, and this will give you the amount of money you can look at spending on your accommodation per month. Of course, the closer you can get to the 30% outgoing the better, as this leaves you more to spend on other essentials.
What other costs should I take into consideration?
Transport is the big one here. It’s almost guaranteed that you’re going to need to commute into work. And this means using London Transport system.
For most of us, this entails using The Tube and/or the London Buses. If your company pays for your transport, that’s all well and good. But most of us aren’t that fortunate, and this cost comes out of our own pocket.
Don’t forget about Council Tax, an annual fee that is paid on every property in the country. This varies from council to council, and is based on the value of the property.
Of course, general day to day bills should also be taken into account, including heating, water, telephone, TV licence, Internet, digital TV… and don’t forget to budget for food, clothing and socialising.
If you have any outgoings, such as loans, credit cards, child maintenance or any arrears on payments, these should also be brought into the equation.
Ways to bring down the cost of renting
Before you throw up your hands in horror and give up all hope of renting your own property in London, you need to take the following thrift tips into consideration. Because, with a little careful planning, it really is possible to bring your outgoings down to affordable levels.
- Live with other people. Many people house share in London. This is a great way of bringing down the cost of living. Plus, if you’re moving to a new city it’s a great way of meeting people. There are many ways of finding such accommodation. Websites such as SpareRoom and EasyRoomMate are great places for finding rooms. It’s also worth checking out sites such as Gum Tree, local papers and even adverts placed in local newsagents and local papers.
- Live in a cheaper area of London. Sure, we’d all like to be really central, but in reality, it’s impossible to afford the sky-high rents in these areas unless you’re in an extremely well paid job. But by looking slightly further afield, you really can bring the monthly rental cost down dramatically. Areas such as Walthamstow, Willesden, Balham and Finsbury Park all offer good transport links into the centre of town, but have considerably lower rental costs. Plus they’re pretty buzzing places in their own right, with a great selection of shops, restaurants and other amenities. And whilst rental prices are considerable cheaper here, you probably won’t spend the whole difference on additional commuting fees.
- Ditch the unnecessaries, such as a TV (no need for a licence, or pricy digital subscriptions). Do you really need a landline as well as your mobile? Probably not (unless you work from home and/or have a family to consider). What about gym memberships? Take up a free way of keeping fit, such as running, instead.
- Learn to downsize on your spending, using discount websites such as Groupon and Voucher Cloud.
- Make sure you regularly check your utility bills using comparison websites such as USwitch and Money Supermarket. This can save you hundreds of pounds per year – money that can be put into savings or used in other ways.
- If you live alone, be sure to tell the council as this entitles you to a 25% reduction in council tax. A big saving, and not one to be overlooked. If you’re in full time education, you don’t have to pay any council tax.
- Can you cycle into work? This is becoming more and more popular as many people realise not only the financial benefits, but the health ones as well. And with most places of work providing shower facilities, all you need do is leave your work clothes in your locker and you’re set. Plus, you get to ditch the gym subscription as you’re getting your daily workout during your commute.
Next steps
Once you’ve worked out what you can truly afford on rent, the next step is to start looking at rental prices in various areas of the city. Some of the best places to begin are on websites such as Zoopla and Right Move. Here you can filter your search by area, property size, price and various other parameters.
Be aware that it’s usual to have to put down a fairly hefty deposit on a rental property. Typically this will be between 1.5 to 2 times the monthly rent, plus pay your first month’s rent upfront. This makes moving in day pretty expensive, but if you know in advance you can plan for this.
With a little careful consideration, it really is possible to rent accommodation in London, even on a fairly moderate salary. And being that you get to live in what might well be the most exciting city in the world, a little pre-planning seems an easy price to pay for the privilege.
