What to spend on a flat?

So, we just got official word today of a job offer to my Brit OH, so it looks like we are returning back to Glasgow. From what I've been able to ascertain using the PAYE calculator, it looks like he will be on a 810L tax code, and he should bring in around £2k after tax. His salary is £30k. Hopefully that is correct since we really need to come up with a budget.

So now I'm trying to figure out what we should budget for a flat. With that salary in mind, I'm thinking we should spend no more than £550, since I thought the rule of thumb was to only spend 25% of income on housing. Does that sound about right?

How big of a flat?
Honestly that sounds really low to me so I just did a quick search on rightmove and did not see anything in that price range.

I expect some places in Glasgow are cheaper than down here, but depending on the size of flat you need I doubt you'll find anything for that price.  We pay £550 for a one bedroom flat in a small town.  Plus don't forget to factor council tax into your calculations.  Again depending on the size of the flat and the neighbourhood, you could be looking at a 100-200 pounds per month in addition to rent. 

Rents in the UK are high and salaries are low.  It's unlikely that you'll be able to keep your housing costs to 25% of your income. 

When I do a search on rightmove for flats in Glasgow West under £600, I receive plenty of results, Beccarose. What type of search parameters are you using? Now, whether they are in good locations around shops, I'm not sure. I'm only familiar with the West End, near the Uni of Glasgow, and with the city centre where all the shops are.

We're hoping to get a 2bd flat, as my OH is studying at uni and we don't want a desk in the bedroom (which could disrupt my sleeping) or in the living room (which would prevent me from watching tv).

I am aware of the additional costs of council tax, which is why I wanted to keep the rent to around the £550 mark. I was thinking about allocating £750 to rent/council tax, but we still have to budget enough money for groceries/leccy/transpo costs/etc, and to send money back to the US for my student loans and also have enough to pay for his classes. It's all starting to add up, and not knowing how long it will take for me to find a job, we have to find a way to live off his income alone. Hence trying to keep rent around that level, until I have a job.

But if we can't use that 25% rule, then we might be tighter on things than I thought.

I'm thinking we should spend no more than £550, since I thought the rule of thumb was to only spend 25% of income on housing. Does that sound about right?

While geared to a primarily female American audience, I try to stick to LearnVest's budgeting tips:

LearnVest recommends your budget follow the 50/20/30 rule. After your income comes in, this rule recommends that your money goes out in this order:

50% of your budget should go to Essential Expenses. These are the expenses you always have to pay as a minimum to keep your life going, such as your housing, transportation, groceries and utilities.

Next, 20% should go to Financial Priorities. These are expenses that help you accomplish important financial tasks, such as paying off loans, building savings, saving for retirement and more; they generally include savings, debt repayment and financial contributions.

Lastly, 30% should go to Lifestyle Choices. This is what’s leftover, which is what you get to live on and enjoy now, on expenses such as dining out, shopping and other fun spending.

What will your transport costs be?  25% is a good rule of thumb, but IMO this can be more if transport costs are lower.  I've seen 20-33% used as rule of thumb, so if costs are lower in another area (such as transport) - could spend more for rent, or if other costs higher - then less on rent.  Just my 2p.

Hopefully, someone who knows Glasgow will be along to help too... 

I thought the rule of thumb was to only spend 25% of income on housing. Does that sound about right?

Huh?
I've never heard of this particular 'rule of thumb' ... you spend what you can afford, for what you want and the location, as far as I'm concerned.  My rent is 42% of my income, for what it's worth! (also in the west end of Glasgow  )

Huh?
I've never heard of this particular 'rule of thumb' ... you spend what you can afford, for what you want and the location, as far as I'm concerned.  My rent is 42% of my income, for what it's worth! (also in the west end of Glasgow  )

I've seen that 25% value on many financial sites, albeit they are more geared for US financials. They may not apply to the UK. There's absolutely no way we could spend £1k/mo on rent and still have enough money for other necessities. Now if/when I find a job, depending on my income, we could spend more on rent. The thing is, since we still have bills in the US that have to be paid (my student loans, a couple of credit cards) I just don't know if we could swing much more income towards rent. 

Between the two of us, we have over $100k in student loans to pay off, and luckily his is still in deferment since he's in school. And while we would dearly love to spend more £ on rent to get that nicer place, we're thinking we'd be better off paying down those loans as quickly as we can. 

I saw a nice one in Burnside for 500.00 a 2 bed  thats in Rutherglen  I wanted it but I can't swing it  on Rosslyn rd  just redone upper flat 

In the UK it's not uncommon to spend 1/3 of your income on housing unfortunately. In my experience, though, other costs are lower than in the US, like energy bills (unless you happen to get some where with high ceilings and single glazing!), phone, internet, TV and mobile phones, and don't forget that in Scotland water and sewage are included in the final council tax calculation as well as rubbish uplift (which are both usually separately paid in the US). We're quite lucky in that we have a 3 bed flat for £495 a month (most flats that size in our area are more like £600-700), so that is less than 25% of my income, but my commuting costs are very high, so it's a balance.

We're quite lucky in that we have a 3 bed flat for £495 a month (most flats that size in our area are more like £600-700)

Wow, that's a very good price!


I just worked out my rent and it's 29% of my income a month.  I'm spoiled though, 2 bedroom flat all to myself. Still thinking of moving somewhere a lot cheaper so I can save some dosh though.

Yeah, when I said lucky I really meant lucky! Part of the reason I'm doing a 4 hour daily commute (it's not as bad as it sounds, honestly!) is that, keeping our standard of living around the same, our housing costs would double if we moved to Edinburgh. Even with my high commuting costs we're still at least £200 a month better off staying here. Capital prices, eh!

I've seen that 25% value on many financial sites,

I've heard the 25% rule bandied about a bit too, but I think it's dreadfully out of date - whether you live in the US or the UK. Perhaps 25 or 30 years ago you could find somewhere reasonable to live for 25% of your salary, but I've never been able to manage it no matter where I lived.

I've also heard of the 25% rule of thumb. My Dad told me when I was looking to rent my first apartment. That was many years ago, but I've managed to stick by that rule for most of my life.

Yep, the 25-33% comes from the perspective of prudent (and professional) money advice.  I too have managed to go by the principle for most of my life.  And I work in the field of money advice...

When we have a client come & say they're struggling to meet debt repayments or even to buy food & pay all their priority bills (council tax, utilities), it's not uncommon that they are overextended on a rent or mortgage that is beyond their means - approaching 50% of their income or possibly even more.  Many times they started in a position where it was not outside their means, but due to circumstances beyond their control (family breakup, illness, redundancy etc), it has become so.  It is very unfortunate but the upshot is that's generally not a sustainable framework over the longterm - bleeding money & building up further debt they will struggle to repay.  Not surprisingly, people aren't always receptive to hearing this.

The rule isn't meant to be a hard and fast one - but rather sensible rule of thumb. Obviously, if you are going to be spending a much larger share of your income on your rent/mortgage, another living cost is going to have to give...