Property | The Tax Resources Blog

Posts Tagged ‘property’

Council Tax Calculator

June 10th, 2011

Question: What percentage of salary should be used to rent a flat? (London)?

I’m earning about £21000 a year and planning to find a flat in central/north London. I’ve seen a couple of them around £220 a week but that represents 50% of my monthly income (21000/12 = 1750 ; 1750*0.5 = 875 per month for rent). Is 50% to much.. would I still have enough money for food, Council Tax, transportation, etc?

Do you know of any “cost of living” calculator online to guide me through the usual expenses of a household and see what would be left from the income .. if any.

Answer: London is expensive.

450 is a good wage.

However renting a nice place is going to set you back. Like you said 220. Spending 50% of your income on housing is normal when you are buying the property however when you are simply renting it is quite wasteful. Since that money is never going to come back to you. Ideally you should be saving a little more and spending less on your accomodation.

there are 2 methods,

1.) share a flat, since you can pick up rooms for around 120 even in central

2.) live further out of London

option 2 is far superior few people realise travel costs are almost identical since a 1-4 travel card is only a few pounds more than a 1-2 it makes no difference. also you will get a great flat for 150 rather than 220. travel times if you live near an overground line will be similar to living in zone 1 even if you live as far out as zone 4.

conclusion

220 is too much.