Cheaper to rent in Barcelona and commute to London | Hacker News Reader

Cheaper to rent in Barcelona and commute to London

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257 pointsmrud270 comments

The point of this piece is not that living in Barcelona and commuting to London is sensible -- it's that the North London property market has gone totally batshit insane.

No, seriously: renting a 2 bedroom flat in a not brilliant suburb of London costs around £25,000 a year, or US $40,000. Then you can add council tax (another £2000), water, electricity, and gas bills, and travel. Upshot: the fixed costs of living in London are on the order of US $50,000 per year (two beds) or around $40,000 per year (one bed). Note that I focus on the two bed option because that's the practical minimum for a family unit, or for someone who telecommutes from home. Note also that the average gross income in London is a little under £28,000 per year (before tax).

Upshot: normal people and normal families can't afford to rent in London any more. The only thing propping up these insane prices is the scarcity induced by the current bubble in the foreign investment housing market. The crash, when it comes, is going to be epic.

Not the only thing. The other major factor is housing benefit, in which a landlord can charge well over the odds, and the govt just pays it. They are trying to cap it, to howls of outrage but from whom? Not the tenants, they never see the money. But from well-heeled buy-to-let landlords whose cash-cow is about to be slaughtered. That's why papers like the Graun oppose it - that's their readers!

I think you're making a correlation/causation error here. Housing benefit has crept up over the years because the property market was inflating steadily and no government dared bring it back down (middle-class home owners vote to punish governments who hit them in the wallet). Housing benefit rises stuck a plaster on the chest wound by allowing low-income workers (bus drivers, shop assistants, nurses) to live in places where they were needed but could no longer afford to rent or buy.

Here's a causation argument:

Considering that housing benefit was set for a long time at the median market rate, this surely drove rental prices upward.

If landlords know they are guaranteed the median by way of housing benefit, they set their rents at the median (given a housing shortage, they can guarantee to rent out any old dump at the housing benefit rate with no disadvantage: and this is evidenced pretty well by distribution of rent prices), which has driven the median upward - a vicious circle of rent increases.

You know there's something called a local housing allowance, which sets maximum rates for housing benefit, right? And that's been in place for years? There are rules about ages and size of accommodation.

There are strict rules about over-accommodation too. The bedroom tax has been operating for many years for everyone except those in council houses and housing association properties.

> There are strict rules about over-accommodation too.

Not sure what you mean there

> The bedroom tax has been operating for many years for everyone except those in council houses and housing association properties.

Or there

The "bedroom tax" operates on private sector renters too, in the sense that you rent what you can afford.

Really? I would have thought the group of people taking this rather capitalist route would not be reading a left leaning newspaper like The Guardian.

For example its obvious you don't, otherwise you would realise The Guardian has been banging on about the cost of London for donkey's years (at least 20) and against the bubbles of buy to let. I remember lots of stories flogging against it as the journalists were complaining they couldn't afford to live in London.

Their also complaining against the current schemes the UK Government which Gideon is pushing regarding mortgage guarantees and everybody (whether in the UK or not, whether working in banking or not) is saying will just create another bubble along the lines of buy to let.

Well, left and right is pretty meaningless these days. That's why the Graun is owned by a holding company offshore in the Caymans where it pays no tax. Your typical reader of it was a "proper" left-winger once, back when they were a student, but now they are well-off, highly paid jobs in law, the media and the civil service, and they'd like to stay that way thankyouverymuch. When they say they care about cause X, they really mean, bung my PR agency a million quid to raise awareness of this, oh and hire my mates as spin doctors, ifyouwouldn'tmind.

Champagne socialist http://en.wikipedia.org/wiki/Champagne_socialist

The Guardian is owned by Guardian Media Group plc, which is a UK public limited company headquartered in London. GMG plc is owned by The Scott Trust Ltd., another UK public limited company. So far as I can tell, it is not true that the Guardian is owned by a holding company offshore in the Caymans, nor that the Guardian is owned by a company that pays no tax. (Except that GMG has made a loss in many recent years and therefore paid no corporation tax. So far as I can tell, these are genuine losses and it seems reasonable not to pay corporation tax if you are not making a profit.)

It does appear that in 2008 the Guardian Media Group bought a magazine company called Emap, and set up a company in the Caymans as part of some (allegedly quite standard) scheme to avoid some of the stamp duty they'd otherwise have paid in the acquisition. Maybe that's dodgy or maybe it's just standard operating procedure (in which case something is dodgy but it might not be in any useful sense GMG's fault), but it's a very different matter from what you claimed.

I am in any case unable to follow your logic at one key point. Let's suppose for the sake of argument that the Guardian is owned by a tax-avoiding holding company. What exactly is the connection between that and the statement that "left and right is pretty meaningless these days"?

(Full disclosure: I read newspapers seldom but the Guardian less seldom than others. I do not work in law, the media, or the civil service, I do not have a PR agency or any mates who are spin doctors, and I would hazard a guess that my pay is within a factor of two of yours one way or the other. So far as I know, I have no financial or professional interest in the success of the Guardian or its allied companies.)

Maybe he's thinking of the Daily Mail? [1]

[1] http://www.private-eye.co.uk/sections.php?section_link=stree...

Here you go: http://order-order.com/2012/11/26/the-guardians-offshore-sec...

GMG is selling a product. They (the owners, editors, writers) no more believe it than at McDonald's corporate HQ they live on cheeseburgers for every meal.

> GMG is selling a product. They (the owners, editors, writers) no more believe it than at McDonald's corporate HQ they live on cheeseburgers for every meal.

You know The Guardian is unlike other newspapers and runs at a loss.

"Miller admits that he does not foresee the newspaper earning a profit anytime soon. Rusbridger said, “The aim is to have sustainable losses.” Miller defines that as getting “our losses down to the low teens in three to five years.” But at some point, if the Guardian does not begin to make money, the trust’s liquid assets, currently £254 million, would be depleted."

http://blogs.spectator.co.uk/coffeehouse/2013/09/guardian-ce...

"... owned by The Scott Trust, a charitable foundation existing between 1936 and 2008, which aimed to ensure the paper's editorial independence in perpetuity, maintaining its financial health to ensure it did not become vulnerable to take overs by for-profit media groups. At the beginning of October 2008, the Scott Trusts assets were transferred to a new limited company, The Scott Trust Limited, with the intention being that the original trust would be wound up.[93] Dame Liz Forgan, chair of the Scott Trust, reassured staff that the purposes of the new company remained as under the previous arrangements.

The Guardian has been consistently loss-making.

...

The Guardian's ownership by the Scott Trust is probably a factor in its being the only British national daily to conduct (since 2003) an annual social, ethical and environmental audit in which it examines, under the scrutiny of an independent external auditor, its own behaviour as a company.[95] It is also the only British daily national newspaper to employ an internal ombudsman (called the "readers' editor") to handle complaints and corrections."

http://en.wikipedia.org/wiki/The_Guardian#Ownership

And Nike, Reebok et al are about sports, but they still make clothes for people with 60" waists to laze around in eating pizza. McDonalds sells salads in their restaurants too, but they ain't a healthfood company.

You've been bamboozled by the Graun's PR and branding, which they should be slick at, that's their main demographic.

Last time I checked, they weren't being run at a loss by a charity specifically to avoid commercial conflicts of interest.

Unlike the companies you mention, The Guardian operates more in the social economy sector (http://en.wikipedia.org/wiki/Social_economy) than the private sector.

> Here you go:

That page says that the Guardian's owner owns a company in the Cayman Islands. It doesn't say that the Guardian's owner is registered in the Cayman Islands, nor that the Guardian's owner pays no tax.

In other words, that page says exactly what I already said, and does not say what you said.

> They [...] no more believe it than [...]

It's far from clear exactly what "it" means (presumably something like "the opinions printed in the Guardian", but those are far from monolithic) -- but I would be interested to know your evidence that the people writing for the Guardian do not believe what they are writing.

And, also just out of curiosity, are there any left-leaning publications that you think are sincere, or is it your opinion that everyone whose politics you dislike is a hypocrite?

I like to get a balanced view of the news, for left-leaning stuff I like the NY Times and for right-leaning, I like The Times. The Graun is the counterpart to the Daily Mail, both of them are for dingbats.

> They are trying to cap it, to howls of outrage but from whom? Not the tenants, they never see the money.

Universal Credit will cause tenants to be paid their housing benefit directly.

http://www.housing.org.uk/policy/welfare-reform/universal-cr...

There are a number of different approaches to addressing the extra risk this will introduce to rents, with things like Jam-Jar accounts, but it's generally expected to introduce more insecurity and thus limit the amount that can be spent on new housing.

> Universal Credit will cause tenants to be paid their housing benefit directly.

Housing benefit gets paid directly to the tenants. Many years ago you could ask for it to go direct to the landlord, but organised gangs set up claims in the names of dead people.

The gov is looking at changing how housing benefit is paid, from directly to the landlord to directly to the tenants, they've been running the pilot schemes for it quite recently in fact. You can find loads of reports on the things with a quick search, some from quite reputable sources.

http://www.bbc.co.uk/news/uk-21756567

I suppose it's possible you and I are talking about different kinds of tenancy, but I don't think that the numerous news stories on this can just be hand-waved away either.

> Bron Afon community housing

> Southwark Council

> Minister Steve Webb said: "We currently pay housing benefit directly to one million people in the private sector and that works pretty well.

> "We are trying to treat people in council houses the same way, but we want to get it right."

That change is for people living in council housing or housing association properties.

It hasn't been possible to get HB for a regular property paid direct to the landlord for many years.

Ah, that's much clearer. Thank you! ^_^

If this was such a massive cash cow, it should still be driving property sales prices through the roof, and banks should be lining up to find ways to shift their loan books towards the buy to let market.

The real issue is a lack of properties in the places people want to live.

The idea that housing benefit is driving the rental market is total nonsense. a) it forms a minority of the market and b) the majority of landlords won't let to people on housing benefit.

a) There are ~850k housing benefit claimants in Greater London[1], out of a total population of just under 5mm.[2] That's ~17%. Not a majority, to be sure, but also not small enough to discount entirely.

b) Just because some landlords do not want to deal with non-claimant tenants doesn't mean that non-claimant tenants will only want to rent from such landlords, if it means cutting themselves off from lower rents. Theoretically removing those 850k people from the housing market would undoubtedly make the prices fall, if only for a while.

1: http://www.londonspovertyprofile.org.uk/indicators/topics/re...

2: http://en.wikipedia.org/wiki/Demographics_of_London#Populati...

Interesting. This is more than I'd have thought but you can't just remove them from the supply/demand picture and say they are driving prices up by their very existence. The OP's point I was addressing was that housing benefits being paid were above market rates (not true as they are capped) and this was pushing the whole market.

Yes the London market is a bit nuts, but if you're paying anything close to 25k/year (that's 480/week!) for a 2 bed in a "not great" part of London then either you have very high standards or you're being seriously ripped off.

For example see what this gets you N1, a pretty central and desirable postcode: http://www.nestoria.co.uk/n1/property/rent/bedrooms-2/maxpri...

The links you suggested are as much expensive. I think the OP didn't mean a miserable appt but just not a great one considering the money paid.

Don't forget there are other costs that the OP might have added to equation: water, ec, internet, phone...

London needs rent control.

Rent control? Geez. If it's the destruction of the city you're after, you could just bomb it, you know. :P

(Oh! Or are you one of those denialists who thinks rent control isn't actually destructive, and prefers your own vision of reality to what the consensus among economists has to say about the matter? because if so I've got some people you should meet who don't believe climate scientists on global warming, or the medical establishment about things like homeopathy, and i think you can all be friends)

Rent control has so destroyed San Francisco.

Is this sarcasm?

I know!! Have you tried to get an apartment there recently? I swear, there'll be something like 50 couples standing in line to view a rickety, old, drafty, minuscule 1-bedroom, at a price that they can barely afford even if they are working for Google. It's INSANE.

Yeah! We should artificially push the price of rentals down, so that there will be no incentive to increase supply, ever.

I can't see any problems with this plan.

Well yeah, but in places like SF and NYC, supply is limited by available space. We could house people in 6x6 cubes in giant rectangular buildings to be really efficient, but nobody wants that. So what do you do when your supply is limited, and the poor and middle class are being pushed out of your city?

I'm all for bulldozing the Mission right after bulldozing Cupertino for high-density cubes.

Cupertino already is fairly high-density, at least downtown. And I don't think anyone suggested bulldozing anything, just allowing people to build what they want, which they currently have a very hard time doing.

Supply isn't held back by lack of pricing incentive, it's denialist zoning restrictions

There's massive incentives to build in and around london. Its just getting the land thats the problem.

Yeah, rent control is bad for Googlers trying to move in to SF, especially on short notice. But it's good for locals who already live there, who are not standing in line for flats, because they already live in them. How you weigh ease of moving in vs. stability for long-time tenants is more of a public-policy than economics question initially, and depends on how you assign utility (though economic analysis can help you maximize utility, once you've assigned it). A pure unrestricted market is already making an ideological decision that stability of people's current living situations should be valued as having zero utility, which not everyone agrees with. If you assign some kind of non-zero-but-not-infinite utility to that, then it's likely neither an unrestricted market nor a classic rigid rent control system will be utility-maximizing, and instead various hybrid schemes may be preferable.

One scheme used in some European cities is to let the prices float freely, but kick in a subsidy for existing residents when rent in an area increases by more than a certain % of their salary, softening the impact of market shifts on neighborhood turnover. This of course has the impact of increasing prices for newcomers relative to a situation where such a subsidy didn't exist, because fewer existing residents will be forced out due to rent increases, thereby freeing up fewer empty apartments for newcomers to rent. But that's the goal of the program, to reduce the number of existing residents unwillingly forced out of their neighborhood by rent increases, by shifting the margins a bit. With some kind of actual quantitative assignment of utilities it'd be possible to rationally design a subsidy program that buffers the impact of large changes without neutralizing them or setting up a long-term two-tier market (for example, subsidies can cover less than 100% of increases, and phase out over time).

But worked surprisingly well in Germany.

Why?

I mean, the point of the article is a little shocking, but it carefully doesn't mention the commute time, which appears to be the thick end of 7-8 hours per day (2h 30 flight each way, and Stansted is not exactly in the heart of London). As a result, there's no shortage of people paying London's high rent prices. I'm one of them, and I wouldn't trade cheaper rents for that kind of commute (or, honestly, even commuting for 1-1.5 hours from the many towns outside London where such a thing is practical). So why does London need rent control?

http://seattletransitblog.com/2013/10/24/rent-control-is-bad...

See the chapter in Economics in One Lesson about how rent control makes everything worse.

http://steshaw.org/economics-in-one-lesson/chap18p1.html

Do they have examples from Sweden? Because my impression is that it works pretty well there (especially if you compare with Norway).

How does Swedish rent control work? Because in San Francisco it only applies while the same person is living there. So old tenants keep their "original rent" with small inflation linked increases, while new tenants pay the much higher "market price".

So in the same apartment building you have a new tenant paying $3000 and an old tenant paying $400 for same size apartments. I.e. the new tenant is overpaying to subsidize the old tenant who is underpaying.

I'm not sure, but I think it is more of a "regulated market/fixed price w/index adjustments based on inflation". So a price will have been set at some point in the past, and is adjusted up a few percent every year, depending on inflation (typically less than 2% I think for Sweden).

To be clear, there is a "black market" of sorts wrt apartments in Sweden -- not sure how that works, but I think it is people illegally sub-letting at a higher price and/or owners taking a "bribe" on top of the regulated rent -- and it can be hard to get apartments in certain areas (high demand, too few new buildings) -- but my impression is that on the whole, it works much better than an unregulated marked, like the one we have in Norway.

Perhaps someone from Sweden can comment further.

> The point of this piece is not that living in Barcelona and commuting to London is sensible -- it's that the North London property market has gone totally batshit insane.

That's not the only point.

The other point is that flights are still much too cheap:

And that is because airline companies/consumers are still allowed to externalize the insane environmental costs. Meaning: we are allowed to pollute, without having to pay for it. That means, a) we promote pollution (the externalized costs) and b) these costs are paid for by the entire world population (1st, 2nd and 3rd world, even if the latter have never ever polluted in the slightest way).

This seems more like your observation rather than a point of the article, but I agree 100%

I have observed this as well. And airlines are not the only industry getting away without compensating for the effects they have on the environment.

Perhaps better way is to promote telecommuting. My emissions on the way from bedroom to office room are zero if do not fart.

In fairness, comparing the property prices in a fashionable London district with those in a lower income country in deep economic trouble after its property bubble burst (and Ryanair's loss-leader headline fares) isn't the best illustration of how expensive London is.

I mean, you can match those Barcelona prices in nice market towns a short train ride from central London (probably a similar door to door time to many parts of central London to commuting from West Hampstead), which many London workers actually do. They can think about buying in those areas from £75k as well.

But the investment bubble at the high end of the property market is a largely separate phenomenon; middle-class renters are more likely to take advantage of cheap rents from a lazy letting agent managing the investment property of a foreign owner who's not too savvy about what their buy-to-let income should be than they are to be affected by the unoccupied flats in Belgravia not being on the market. For that reason, for £28000 a year I got five large bedrooms, two reception rooms and a garden in a desirable south London suburb three years ago, so I'd expect a pretty impressive[ly located] 2 bed flat for £25000....

£25k/yr is ~£480/wk - student accommodation at Imperial College (this is South Kensington) goes up to ~£250/wk for a living room and bedroom.

Taking a cursory look at the (current) prices in the area, Chelsea and similar areas look like you might find a single place or perhaps two at those prices, but it won't be terribly appealing - attempting to actually rent for £480/wk looks like it gets you a studio/1bed flat.

Edit: So essentially, £25k/yr will get you almost nothing in upscale areas, a hell of a lot in downscale areas.

Using Chelsea as a reference point for London prices is akin to using Rolls Royce as a reference point for car prices. Yes, you have to pay more to show off if the BMW isn't upscale enough for you.

There's plenty of choice of central locations with good housing, transport, reputations and nightlife where £25k per annum gets you a very nice flat indeed.

So yes, as I said. :P

OTOH it is also somewhat fair to say that trying to stay close to upscale areas whilst not being in them can in quite some number of cases place you in slightly risky areas to live.

Being happy to commute can really help.

Student accommodation is subsidised by the university.

Exactly my point - the prices I cite are lower than you could possibly get on the open market.

I'm trying to argue that housing is expensive in those areas - really expensive student accommodation really helps my cause. :P

Isn't there a thing in London about people subletting every part of their property to bus loads of migrant workers?

3 bedroom place then becomes a 6 rent unit property off the books. That would explain part of the rocketing prices. I've known chinese nationals who stayed 15 to a london property. All cash. Authorities do nothing and some are in on the shuffle taking kickbacks.

> Isn't there a thing in London about people subletting every part of their property to bus loads of migrant workers?

No.

1. This isn't a widespread thing. No idea how you've decided that it is.

2. How does overfilling properties lead to rising prices? If anything, it would serve to keep prices lower.

3. Which authorities are "in on the shuffle taking kickbacks"?

>> 2. How does overfilling properties lead to rising prices? If anything, it would serve to keep prices lower.

When one family rents a 2 bedroom flat, they may be able to afford say 1K (husband and wife working). But when the same flat is rented to 4 singles, they might be able to afford 2000. Each person's share is just 500. So when the landlord asks them 1200, they would happily pay for it as the effective rent per person is only 300.

What you are saying is that the primary driver of price is ability to pay. This is basically a claim that the market isn't competitive at all. That's a fairly strong thing to say, as even a vastly under-supplied market can be competitive.

I don't understand how prices in a vastly under-supplied free market will not rise until they reach the maximum price buyers are willing to pay.

"Willingness to pay" is different from "ability to pay" -- your willingness to pay will be greatly affected by the price of competitors or neighboring markets, for example.

What competitors? What neighbouring markets?

Right, if there's no competitors or neighbouring markets, then you have a monopoly situation, and the sole seller (or cartel) are free to set prices as high as people are able to pay. But just because there is a shortage doesn't mean there's a monopoly.

If it's what people see, it's what people see. I've definitely seen effects like that in real-estate markets.

This overfilling is pretty widespread across most nationalities just getting by in London, if you go by anecdotal evidence.

A friend of mine lives somewhere in North London (I believe it is Golders Green), paying 1300pounds a month for 2 and half room apartment, paying council tax and so on, all on a minimum wage as a porter which is around 1200 pounds a month(why he prefers being a porter over a Perl programmer that is one of his skills is another question).

If he were not subletting the room and half, there would be no way he would be able to work in London for a minimum wage. The situation is similar to most people working for minimum wage that he knows.

Still, I think this overfilling is a symptom not the cause of high property prices. This overfilling by the poor has always happened in big cities.

> with those in a lower income country in deep economic trouble

Things might be a bit more subtle than that; Barcelona is in catalunya, which is actually doing quite well for itself in spite of the catastrophe in the balance of Spain.

Of course imagine if Spain still had it's own currency. It would be in the tank making the cost differential significantly more dramatic. Thus attracting more people and more real estate purchases helping to re-start the economy etc.

The region of Catalonia has a budget deficit that runs above Spain's average and is also the region with the largest debt outstanding, twice as large as the region behind. From reading the FT, Catalonia is in big trouble, and they had to introduce a tax that taxes bank deposits i.e. double taxing your income. I don't think they are in a very good shape.

I think that's a bit of a stretch, Catalunya is by itself in a huge problems (debt) and is also still a part of Spain, so you can't that simply separate it from the problems of the country.

It's true that Barcelona by itself is probably still doing pretty fine - but I would say that's for different reasons - there's no shortage of people from all over the world coming there to live/work/study, be it Erasmus students or business people (a lot of Germans my experience is telling). That keeps the renting market busy.

On the other hand, 680€ for a three-bed flat in Les Corts? That's insanely cheap, so either the OP found a great opportunity or the prices really dropped down in a last year (or, third possibility: I overvalue the attractiveness of Les Corts)

Rental is insane across the entirety of Zones 1-3, not just in the north of the city

Right, and if you want to live in a "leafy green" part of zones 4, 5 and 6, with good transport into central London expect to pay close to zone 2 prices (e.g. Richmond, Wimbledon, even Beckenham, etc.). A 2 bed in Richmond will set you back £1400/month +. And that's a slightly amazing 40min commute (via Waterloo).

Only if you are really selective about wanting to live in the expensive leafy green areas. There are plenty of "leafy green" parts of Croydon, for example, where prices for a 2 bed is more in the 800-1000/month range.

1400/month will give you a large house with a garden many places here.

Heck, if I could get 1400/month to rent out my 3 bedroom house with a garden, I'd have enough left after paying my mortgage to rent a 2 bed flat nearby (though that admittedly is because I struck it lucky with a very favorable tracker mortgage).

However build too many houses and you have the opposite problem. Just look at Ireland.

The problem in both cases being over-investment in the real estate market as a result of too much cash chasing too few investment opportunities.

Or you could rent in Croydon, a suburb with below average crime (for London), a population earning above the London average, and pay more like 11,000 per year for a 2 bed flat, within 15 minutes on the train from London Victoria and (EDIT: I left out the rest of the sentence) <20 minutes from London Bridge.

25k/year here will give you an upscale serviced short-let apartment, or a 5 bedroom, 3 reception room house with a large garden.

In other words, the prices you give are based on assumptions about living in a really expensive part of London.

Yeah but Croydon... ugh

... is something pretty much only people who haven't actually spent time living in the nicer parts of Croydon says, and presumably a large part of the reason why it's so cheap.

(and for the record, the prices I cited are for some of the nicer parts of Croydon - in the (few) shit holes you'd pay much less)

Frankly, I'm not moving anywhere else in London again. If I ever strike it rich, I'll still stay here, because what you get for your money here is insane compared to elsewhere in London.

Up to and including huge mansions off private roads (Croydon is home to one of the wealthiest areas in the UK, in parts of Purley) of a size and with gardens that require "staff", that go for less than what many people pay for tiny flats in Central London.

If it's worth thousands a year to avoid having a Croydon post code, I have no sympathy.

Croydon is really improving and there's actually a pretty cool surging tech scene there. As they have a lot of fibre, cheap commercial property, support from council and transport links. Not that I'm saying people should work in Croydon just yet as there aren't enough tech companies but there are quite a few medium sized ones and some startups.

+1 for living in Croydon. It's cheap, there's excellent transport links to the centre and it's easy to get out of the city and find some countryside.

Also to add to @brackin's comment, the Croydon tech scene has been gaining momentum for a few years and is at a really exciting stage. There's a real opportunity for Croydon to rival Shoreditch as a UK centre of technology.

More info: http://thecroydoncitizen.com/croydon-tech-city-2/

Croydon isn't fashionable, I get that. So you need to be happy paying a premium for a fashionable brand. That's all this piece is about, places where there is very high demand and a limited supply are very very expensive.

I have my own 2 bedroom flat in a professional neighbourhood, no through road, so it's pretty much a private community. Paying under £700 a month on a standard variable rate mortgage (I could push it even lower switching mortgage providers).

Looking out my living room window I see trees. In winter, I have views of Caterham valley. It's quiet and peaceful. This morning just the rustle of leaves and my clock ticking away. I'm surrounded by green, rarely hear traffic, a rumble of a train every now and again down the East Grinstead line. It's everything that London is not.

So it's part of Croydon, zone 6. A choice of two train lines, decent access to London. The 40 minute commute each way is good for hacking away at a personal project, laying down foundations for next steps, bolstering/improving unit-test coverage.

Granted, front-door-to-front-door, it costs me 11 hours to do an 8 hour day, but the time outside of that is all mine, in an environment conducive to lots of thinking and reflection, and coding zones.

And earning less than colleagues doing the same role, I have a lot more disposable income as a single tech-guy working in London.

Snub Croydon if you want, but you also chose to justify market prices of North London rent. That's why London has a series of commuter belts running parallel to the train lines. There's a tradeoff of cost, time and quality of life to be made.

I quite like the southern parts of Croydon: South Croydon, Purley, Kenley, Warlingham, Caterham. Croydon has good parts and bad, both can change over time, as people living there slowly change. I'm in a once-family area that's mostly professional couples now. On the commuter belt into London.

> Looking out my living room window I see trees. In winter, I have views of Caterham valley. It's quiet and peaceful. This morning just the rustle of leaves and my clock ticking away. I'm surrounded by green, rarely hear traffic, a rumble of a train every now and again down the East Grinstead line. It's everything that London is not.

This right here is the reason I'm moving from Brixton (short tube commute) to Caterham/Warlingham/Whyteleafe next year (longer commute, better quality of life, cheaper rent).

This sort of attitude (which is general and by no means limited to you ;-)) is part of why living costs in London are so high. A lot of people in London, even the relatively poor, are so psychologically locked to living there that living anywhere else simply isn't an option they'll entertain.

Or down in Canada Waters or Rotherhide. I had a nice place down there on the water and a great commute by ferry. There are a bunch of nice areas if you steer clear if what is trendy.

I currently live in Rotherhithe and like the area apart from the rubbish broadband, I get around 2 megabits.

http://forums.thinkbroadband.com/notspot/3998475-rotherhithe...

It's not just London, it's everywhere. Every successful first-world major city has this crazy housing price thing happening. Toronto is the same, as is Vancouver, and I'm sure Americans can list more than a few towns with freakish condo markets.

Right. Add on places such as Moscow, Sydney, Zurich, Singapore, Tokyo, Hong Kong - and you have some of the worlds most expensive cities (when converted to USD, not considering the relative costs of living).

Even with the relative costs of living taken into account, some cities are more expensive that others - London & Sydney are still right up there.

Don't forget Auckland, housing market is insane here and the residents are destroying the city through single dwelling zoning all the good, close to the cbd land.

There goes my plans to expat it in Auckland.

Wellington is much nicer anyway :-)

It was outrageously easy to get credit, which let to the prices going up, and then the crash. Now the answer to the problem seems to be more of the same.

Berlin is still extremely cheap. You can get fairly large 1BRs in nice, central areas neat Mitte for 400-500 EUR or even less. Larger apartments are not much more expensive. You can still find a largeish 2BR below 1000 EUR.

The big question is of course how (or if) Berlin can avoid the same fate as London.

Madrid, Buenos Aires, Seoul, Osaka, Barcelona, and Mexico City all seem to have quality cheap central options, too. Tokyo and London seem to have affordable desirable safe quality outlying areas not too far from the center on the train.

The really terrible situation with no viable alternatives seems limited to SF and NY. (Maybe Paris? News about Paris always makes the cheap suburbs seem dangerous and non-French.)

Sydney has no "cheap and viable" areas anymore.

It depends what you class as cheap. I work in Barcelona, and my rent is affordable, but if you compare the IT wages here and in London, I regularly get contacted about jobs paying around double what I earn over in London. I have been looking around for new jobs, but it seems I am already pretty close to the top of the salary range here.

London trains are hardly affordable. A 30 min commute into London on the train would add £300/month to the cost for where I live. Or 500/mo if you want to park at the station.

I have a three bedroom place (wich I share with two others) in New Jersey for $1600 and its only a $6 35 min commute to New York. Not bad if you ask me

Germans usually don't define Berlin to be a "successful first-world major city" (saying that as a German)

I don't know anything about modern-day Germany, except the constant buzz in the news of the German economic success. Is Berlin overshadowed by other cities in Germany? Is it merely the seat of government and not economically successful?

Or is this merely a German joke about a rough town?

Germany's industrial power is concentrated in the central and southern parts of ex-West Germany. Berlin just doesn't manufacture enough cars. :P

(Now I'm wondering if this is like the PRC, where Beijing has the rich history of a capital but bland areas like Shenzhen are where the money is made.)

The jokes about Berlin would be mostly about its horrendously mismanaged prestige project - the new airport.

I don't know. It's clearly first-world. And it's a major city -- the political center of Germany, one of the top tourist destinations in the world, and highly regarded for its arts and culture, nightlife and high standards of living. It's got low unemployment and high growth. It's also host to an apparently booming startup culture (although many of the actors with presence in the city are in fact foreign companies).

Current unemployment numbers: Berlin 205k, Baden-Wuerttemberg 232k, Bavaria 250k.

So much for that...

But the rents in Berlin have also risen fantastically in recent years. Those numbers are about 50% higher than when I moved to the city 7 years ago.

As of when? I've helped three people relocate here over the past three month, as well as hunted around for my own apartment, and we've found nothing in that price range in Mitte.

I just did a bunch of Craigslist searches and verified that the apartments looked nice.

I didn't say Mitte, though, but close to Mitte. Central areas like Friedrichshain, Kreuzberg, Prenzlauer Berg.

Of course there is the problem that a lot of scammers use Craigslist and those apartments don't really exist.

Yeah, and Prenzlauer Berg is actually quite gentrified (staying there for the second time now). It's full of middle-class professional families with children.

I've been researching Toronto for the past few weeks. Rents seem cheap compared to condo prices. I can consistently find 1 beds for 1500 and two for 1800-2000. As a reference, I paid 2K for a studio in Manhattan and thought I was lucky.

It's simple supply and demand. Lots of people want to live in the popular districts of big popular cities, but the supply is strictly limited (you can't simply build a ton of extra houses in an old neighbourhood in a city center), so prices go through the roof.

You don't have to live there. You can commute. And if it gets too hard to find good people in London because both the rent and the commute are terrible, companies will eventually open offices in more fertile areas.

> It's simple supply and demand [...] but the supply is strictly limited

So, not supply and demand, then. Just demand.

Makes sense. Isn't this part of London part of the Grosvenor Estate? No wonder it is expensive- I believe they keep the freehold and only give 100 year leases.

http://en.wikipedia.org/wiki/Grosvenor_Group

I know a number of colleagues (I work for a large global corp) who have moved to Spain from the UK for many of these reasons. We heavily embrace remote working through the use of online meetings and video-conferencing. If you need a high quality meeting, they go to the office for 52"+ HD telepresence. They regularly fly into London because it is not cost prohibitive to do so - even on their own budget. And their salary in Spain? Good. Not quite as good as London, but good.

I also know people who work in this style from Newcastle and Manchester - though the train tickets are often more expensive than flying, there is the added benefit of power, space, and being able to arrive ~5 mins before your train departs.

EDIT: Currently attempting the same from 1hr outside of Paddington, where my rent is less than 50% of my London rent. Though it's certainly a lot more dull than living in Zone 2!! I wouldn't advise it :-(

I live in a relatively nice bit of South London. My rent is £1250/mo. It takes me 15 minutes to cycle to work in the centre (the Tube is 30 minutes by virtue of the nearest station being 15 minutes away, but closer to the stations is still the same rent). North London rent is insane.

One or two bedroom apartment? It's still a pretty crazy rent from what I've seen of (advertised) London salaries (it's almost as expensive as here in Bergen, Norway -- but here you almost have to make an effort to make less than £32 247/year if you work full time).

As a Brit living in Silicon Valley, I look at these numbers and think that perhaps I should move back to London. I'd certainly save a lot of money on rent. (But, of course, the income scales are very different!)

Finding a decent true 2 bed room apartment in Manhattan will cost you $4,000 too.

See also: San Francisco. The average for a one-bedroom here just crossed the $3,000 mark.

I'm in a 3bd apartment on Manhattan that costs less than $2000/month. Articles always cherrypick luxury apartments in the most expensive areas.

I live here, and that sounds really unlikely to me. Where are you? Is there any subsidy involved?

No subsidy. Most of my non-wall street friends pay in the $600-800 range as well. Among this subset, the farthest one to the south is on 106th, and the farthest one north is on 160th. I'm 1/2 a block from the nearest A/C/E station and about 4 streets/a 5 minute walk from the 1.

600-800 per bedroom/month? (Ie: 1200-1600 for a 2 bedroom apartment)? Or did you mean something else?

Yes, per bedroom per month. It's more like $1800-2400 for a 3br though, because those appear to be the most cost-efficient. Off the top of my head, I remember visiting one place that was a 2br for $900/person (including utilities) around 140th which I liked, as it was quite spacious, but it was a bit out of my price range. IMO, if I had $1100/month or so I could have found a place in a great 2br pretty easily though. Quality seems to vastly improve with each additional $200/month.

Oddly, Brooklyn and Queens were not cheaper.

But it is obviously Harlem and not what people usually mean by "in Manhattan"

You...do realize Manhattan is an island, right? The boundary between Manhattan and not-Manhattan is pretty clearly delineated.

Come on!

Even ignoring north of 96th street (which, check a map, is part of Manhattan) there are plenty of neighborhoods where you can find a two bedroom for $3k or less. Yorkville, Chinatown, far LES, parts of alphabet city, the far west 30s, and probably others I'm not familiar with.

That you could say such a thing says more about you than the rental market.

Those are the exceptions not the rule. And majority of the so-called true 2 bed room are flex twos.

See: http://newyork.cbslocal.com/2013/07/10/average-new-york-city...

just to note I did a mental exercise on this recently: affordable home is supposedly 2.5 times yearly income (if you earn 50k do not buy a home worth more than 125k).

the upshot of this is for the average income in London (28k) the affordability limit is 70k. And there were last month 66 properties advertised for sale in London at 70k or less - for a city of 8milllion

just agreeing with the parent post here

The crash, when it comes, is going to be epic.

Yup, that is the whole point of market economies, they self correct eventually. I totally sympathize with the folks in London it sucks not being able to find an apartment, so you end up either in a horrible commute or working elsewhere. That makes it harder to find people to work there, so if the imbalance persist the jobs move elsewhere, and the revenues go down, and the economy cools off.

So if you're in your 20's today, something to think about is how this might self correct. Either telecommuting could take off, or something like Musk's Hyperloop dropping off people from one urban center into another. Ask yourself what is it about London (other than the job) that makes it a desirable place to live. Can those things be replicated outside of London? Can you build an urban 'night life' center and split the night life from the work life? What is it going to do to the cost of businesses that have to be in London? Can those businesses be made more efficient or profitable by enabling them to minimize their local footprint? On and on. It really isn't sustainable, and as Charlie points out the crash is going to be pretty epic. So think about how you might turn that to your advantage in 10 years.

Musk's hyperloop might or might not be workable in the right place, but it's simply not going to work in London. (Cost of new construction: prohibitive. Also, London's transport infrastructure is groaning at the seams -- it dates to the 19th century or earlier (road layout mostly dates to the 1670s) and it's simply overloaded. Hyperloop seems to be a high-speed low-numbers solution; what London needs is relatively low-speed but extremely high volume transport.

When it happens I think it'll look like an explosion in semi-telecomute jobs. All those people who spend weekdays away from their families at the moment will find they really only need to be in town for 1 or 2 days per week, and companies will realise that this is a great way of opening up the talent pool while keeping wages low.

So, building lots of co-working spaces in England's market towns and regional cities seems like a sensible move right now.

“companies will realise that this is a great way of opening up the talent pool while keeping wages low.”

It's certainly cheaper to move bits than bodies, so why don't companies realize this already? Why do they keep placing more jobs in places people can't afford to live?

One cynical suggestion is that the people making these decisions do live there, and their inflated property values depend on keeping demand high. But this explanation is obviously false because it would be a violation of fiduciary duty.

Naturally :%s/London/Silicon Valley/g among others.

It's certainly cheaper to move bits than bodies, so why don't companies realize this already?

It is the whole 'working at home' issue which not all companies can deal with. Whether it is employees who take advantage of not being visible or managers to fret over what they aren't able to see, it challenges them to be as productive as if they were all in the same room. There is also a certain energy "boost" from having everyone together for whatever reason.

On alternative might be something like the dedicated co-working spaces with high bandwidth connectivity. Imagine that you're "office" is a just a mile or two away, has perhaps 8 or 12 offices/cubes/spaces and is set up so that it is connected at 10gbit to the main 'campus. When you are there you are "virtually present" in other working spaces around the country connected similarly. Large projection screens providing views of the other spaces with real time teleconferencing type audio links with spatialized volume management. The result is you are "near" your home in the lower cost area, everyone at "work" sees and can hear the other folks at work, and rather than paying to heat/cool/lease a multi-floor space in downtown you are paying for a bunch of dedicated 10G point to point lines between many smaller, more efficient spaces.

London is expensive, and West Hampstead is one of the more expensive areas in Zone 2.

However, there is much better value to be if you move out a bit. I rent a 3 bed double story semi-detached house in zone 5 NW London in an awesome residential area. Its located in a cul-de-sac, we have a proper front and back garden, no 1950's council flats anywhere nearby, near a great high street and lots of green spaces around. Rent is £1350 per month.

Oh, and there is a fast train (no stops) to Euston which takes only 12 minutes.

I don't think there will be an epic crash in London any time soon, if ever. There is no excess supply, no overbuilding. It's completely unlike the Spanish or Irish property market in that regard.

London property prices will decline if and when London loses its role as an important financial center. Maybe if the UK leaves the EU, Singapore's gravitational pull increases, or some important regulatory changes take place.

I'm not sure that a decline in the financial industry would have that effect.

I don't think such a decline would have any effect on the supply side; it won't suddenly create more houses, or release more houses from ownership to rental.

What effect would it have on the demand side? Well, people in the financial industry who could move to Singapore or Zurich or whatever might well do that, and so stop wanting to rent houses. But there are vanishingly few such people - you're talking about the elite. Their loss (if we call it a loss) wouldn't have much impact on demand. The kinds of stupendous penthouses and townhouses they rent mean they're not even competing in the same market as the normal middle-class mugs. The majority of people in the financial industry - from bank apparatchiks down to post-room clerks - aren't about to up sticks and migrate to a tax haven. If their jobs go away, they will be looking for other jobs in London.

Even if they decide to give up and go and become shepherds in the Dales or something, how many of them are there? Finance is big in London, but it's far from being a dominant employer. There are huge numbers of people working in all the other sectors of a post-industrial economy too - law, media, IT, corporate head offices of all sorts, academia, healthcare, culture, not to mention all those civil service jobs. If we accept the (forecast) 2013 numbers in http://www.london.gov.uk/sites/default/files/wp51.pdf then finance employs 357 000 people, out of a total of 4 859 000 - 7.3%. Significant, but not enough that anything short of a collapse of the industry will have a significant effect.

I think you grossly underestimate the importance of the financial sector for London's economy. I've been watching the IT jobs market there for a long time. My estimate is that at least half of all IT jobs are directly or indirectly related to finance. I'm sure it's even more extreme in legal and some professional services.

Property prices do not simply depend on the number of people looking to buy. They are also determined by how much people are willing and able to pay. If you strip out the inflated salaries they pay in finance, it's going to trickle down to all other salaries and prices.

The financial sector employs large numbers of foreigners. If they leave, demand gets crushed. Also, let's not forget that London property isn't just bought to live in. It's also an investment for rich people from all around the world. If finance moves on, these investors will follow suit.

It'd be useful to get some hard numbers on how many jobs in the other industries are dependent on finance. And, conversely, how many jobs in finance are sustained by the other industries, rather than simply being part of the edifice of international capital. FWIW, my estimate would be that less than half of tech jobs in London are in finance, but without hard numbers, we're just making things up, really.

I'm not sure about trickle-down effects. These highly-paid finance people are not competing for the two-bedroom flats in Seven Sisters that i and other more ordinary middle-class people are after, are they? They're looking rather further upmarket. So, their demand drives a high prices of nice flats in Greenwich or townhouses in Chelsea or whatever. If that demand goes away, prices of those will fall. Then, some people who are currently looking at flats in Seven Sisters may switch to looking at these cheaper houses in Chelsea (choosing a barely affordable place somewhere nice, rather than a cheap place somewhere not so nice). That will reduce demand in Seven Sisters, and should let prices fall. But the degree of fall isn't related to the prices that the finance people were paying in Chelsea, it's just a function of the number of people who shift their attention out of Seven Sisters. I would expect the effect on prices in Seven Sisters to be muted. As opposed to, say, a collapse in the publishing industry, or the government getting serious about moving the civil service to the frozen Northern wastes, which would directly reduce demand in the middle of the market.

The point about international investors doesn't make any sense to me. People don't invest in the London property market because this is where the financial industry is, they invest because it's a safe investment with a good return. The only connection to the financial industry is indirectly, via demand. And since my belief is that a substantial decline in the financial industry would not reduce demand very much, i also believe that such a decline would not cause a flight of investors.

That's a bit misleading, the cheapest 2 bed flat for say nw6 is £13k a year from a quick search and the cheapest in London is probably around 10k, things are overpriced and finding quality housing in a nice area is hard (as it is in most large cities), but there is a broad range of properties available, and rental costs vary from £200 a week or less to over £7,000 a week for 2 beds in different areas just a few miles apart.

I love these comments about a bubble in one of the most coveted cities in the world when interest rates have been at their lowest ever. What is causing this bubble that prices would decline so much that they would match Barcelona, a great city but not one desired by people all over the world in the center of the financial capital of Europe.

Here a fellow hacker from Barcelona.

I rented a loft for 6620€/year. It's mint condition and it's in the outskirts of Barcelona. I'm 12 min in subway to the plaza Catalonia and in 7 min using the train or 20 mins in bus. To be honest, I would never never again will rent in the centre of the city. It's expensive and all buildings are antique, without the proper commodities.

If you want to come Barcelona, check the outskirts, get a scooter or enjoy the Barcelona transportation system. It's wonderful.

I want to add some more info about living in Barcelona.

The weather is magnifique. It barely rains all the year. You can go mountains withing 2h car travel if you want to enjoy the snow in winter.

Eating can be really cheap IF you go to the supermarket, buy all the meals and cook yourself like I do, I saved 300€/month doing this instead eating outside. If you can compile rails, you can be a chef, :). I do buy the meals and stuff for around 90€/month. That includes the 40lts of water i buy. Then daily i try to buy meat, fish or vegetables for the week and it cost me no more than 220€ month.

I pay 90 euros electricity, 30 gas and 40 water every 2 months. 60 euros for 100mbit fiber connection + phone and mobile and that's all.

Sounds a lot like San Francisco (though I guess "wonderful" isn't the word some people would use to describe mass transit, but I think it's pretty great compared to the one I have now in the American midwest)

Indeed, in terms of environment, Barcelona is like San Francisco, except without the fog or Asian food. Unfortunately, it doesn't quite have the same employment opportunities either.

It is not like SFO at all. The weather, the food, the culture, the beaches (you can swim without freezing it), the mountains and the history makes Barcelona a really different city. No offense to SFOers.

I have to concur on the weather part. San Francisco in summer is like Barcelona in the worst day of winter. Please do not equate sunshine and nice weather. No offense to SFOers, your city is lovely nonetheless.

I have a two bedroom flat in San Gervasi (a rather posh area) for 700 euros a month, so yeah, the rent in Barcelona is rather cheap.

Sounds great - but would I be right to assume that Spanish is the working language in the tech community?

Most tech startups work in English, specially the ones with international/remote workers. Besides that, the "working language" is Catalan, because Barcelona is a city in Catalunya.

Language isn't a problem, as long as you speak English. Outside work, you'll hear both Catalan and Spanish. Both are easy to learn and understand, and people do really make an effort to understand and be understood, so no problem there either.

Barcelona is a different city. Most of the europeans come to Barcelona because we're used to speak english, if you compare to other cities where people barely speaks spanish well. Barcelona is multicultural to a high level.

At my job we all speak english. And sometimes we speak mix english / spanish but its rare.

About 5 years ago I did this. I flew from the south of Spain (flying from Jerez on RyanAir) to London once a week for 2 days a week (couch surfing with a friend).

Its a hard lifestyle - by about the 10th of these flights you will be sick of the security hassles (and RyanAir) - but it was way better than living in London full time (no offense).

I did it for 18 months before finally burning out on it and moving to a full time remote position (which paid less but I decided that that was worth the upgrade in lifestyle).

Once a week for 2 days a week?

Every week he flew in, spent 2 days in London and then flew back.

UK renting is just idiotic at present all over, although especially bonkers in our capital city.

Remember that 1 bed flats are especially in demand at present as a result of the (in)famous bedroom tax[1]. A single person or a couple are only allowed 1 bedroom if they need to claim housing benefit (unemployed or low-wage, and remember that in London 'low waged' is a pretty high threshold, e.g. teachers, social workers, retail staff, bus drivers &c).

Bear in mind that building 1 bedroom flats has (hitherto) been regarded as a waste of money for housing associations or councils, so that really only commercial lets are available (at usually twice or three times the rent of a HA/council flat with 2 beds), so, ironically, the tax payer will be paying more to move couples out of 2 bed high rise flats in rough areas which are hard to let into expensive private let 1 bed flats. There will be no takers for the high rise flats (unsuitable for children) so they will be mothballed then expensively demolished.

Yes, bonkers, but the UK is run by the Daily Fail and other populist idiots.

[1] http://england.shelter.org.uk/get_advice/housing_benefit_and...

Edit: OK anonymous downvoter, state your reasons

Not the downvoter, but I think s/UK/London/. I agree with everything on what you say about London, but outside of London the rest of the UK isn't really that bad. You can rent a 3 bedroom house for £300/month in Yorkshire. Even if you are the only earner in a household, on minimum wage, you'll still have over £500/month left after rent (probably more if you have kids due to benefits).

Bonus: It's a three hour commute to London [1].

[0] http://www.zoopla.co.uk/to-rent/details/20671512?search_iden...

[1] http://traintimes.org.uk/Gainsborough/London/06:30/monday/18...

"You can rent a 3 bedroom house for £300/month in Yorkshire."

Leeds? York? I suspect not.

Bear in mind that single bedroom flats are mainly built in areas where land is expensive, because it is only then that the small space saving over a 2 bed flat outweighs the similar building cost.

Birmingham: 3 bed house commercial, way outside city, is £750 pcm. That will increase when H2S happens (if it does).

Maybe £300/month was a bit ambitious for Leeds, but here's £400/month:

http://www.rightmove.co.uk/property-to-rent/property-4286620...

This is in Bramley / Pudsey, 4 miles out from Leeds city centre (well within the Leeds / Bradford urban area). I imagine you could get similar in Armley or Holbeck (1.5 miles out).

If the metro reaches Bramley, I accept your point!

In the Birmingham/West Midlands anything in reach of centre is over £500 per month.

I think s/South-East England/London. For values of 'East' which include Oxford, Winchester, and other such towns which offer cosmopolitan amenities and either a strong middle-class labour market (hello, Cambridge) or a plausible commute into London.

As other commenters have commented (in other comments), there are plenty of bits of the UK which are still cheap. And whilst they may be absolutely lovely, they're cheap because they're miles from anywhere that anyone with any money would want to work or go shopping.

That's a roughly 4 hour commute in each direction: 1h flight, 1h train ride from airport to liverpool street + commute to the airport and waiting. And this are, in my experience, conservative numbers.

So you spend 128 hours per month commuting, to save 387€. Not what I would call a bargain.

Oh, what about double taxation? I'm pretty sure you'd be hit by that and that would most likely put you well in the negative.

Most European countries have a double taxation agreement between each other. It seems like UK and Spain have one as well (at least according to the example on http://www.hmrc.gov.uk/international/dta-intro.htm ).

It's part of the base EEA (i.e., EU + Iceland, Liechtenstein, and Norway) agreement; you pay income tax where domiciled.

I know an assload of people who work in the NYC area that have commutes that long or nearly that long. 3hour+ commutes aren't uncommon at all.

Well then I would confidently say that's stupid, unless they are using their commute time to work on something or catch up on their favorite shows.

Your most limited resource is time. Money is a distant second. And if those people arent monetizing their commute or taking care of their entertainment, they are wasting time to save some money. It's nearly as stupid as fracking - wasting water to get oil, only to later have a water shortage and a raped environment. And half as stupid as wasting your health for money, then trying to get it back with money.

It's not stupid. High salaried people in NYC often locate their families in the suburbs in CT and NJ, which are safer and more livable. The commute is just a function of where they determine the salary/lifestyle tradeoff is even. Some people just place a higher utility on their family's lifestyle than their own time.

I don't know that I'd call CT or NJ safer or more liveable. Especially not to the point where it would justify such a long commute.

If you're a developer and doing that, you're probably doing it wrong. That's 3 hours of your life you could've spent doing whatever. Even looking at cats is better than sitting(if you're lucky to get a seat) in a train for 3 hours.

3 hour commutes aren't uncommon...in the States. Pretty rare in the UK.

In the States a 3 hour commute is uncommon, though certainly not unheard of.

It was fairly obvious to me that this is not a serious suggestion, more an indication of how expensive it is to rent in London.

The argument in the post is flawed because of the commuting time issue you mention, add to that the fact the Ryanair is extremely unreliable as an airline...

PS: there is no double taxation between UK/Spain

Ryanair is not unreliable. Horrible and uncomfortable yes, but no one can say they are unreliable.

I am saying it. Ryanair is very unreliable. Twice I've had emergency landings with them, and it's not fun.

Just take a look at this [1] and then we can talk about Ryanair's incredibile reliability.

[1] http://m.youtube.com/watch?v=SIu295DWj94

Considering the Barcelona winter weather I'd be tempted, if I got a job in London. And I hate commuting. (A reason I'm not that hot on getting a London job anyway, despite loving the city.)

I've moved 7 months ago, and the weather has been truly lovely. I'll see how to fall/winter will be. But really, coming from Slovenia where we have hot summers, I didn't miss a thing :)

Ok, but why would anybody get a job in London because they love the city, but then not live there even though they hate commuting?

Ambivalence? Oh yes. (Love to visit the place, but is it really good to live there?)

I'm just going to throw this out there, but no matter how shitty the seating is. I am at my peak productivity on planes. I don't quite understand it, but it seems to be true for me.

So that said, this would probably increase my own personal productivity.

Cheaper, but fairly ridiculous. Stay in Barcelona and telecommute.

Similarly, it would be cheaper for me to rent in Mexico City and commute to my job in Los Angeles. Yes, some global metropolises have lower rents than others.

> it would be cheaper for me to rent in Mexico City and commute to my job in Los Angeles.

Is this serious? Because that's the whole point of this blog post: flying everyday between London and Barcelona it's actually doable, for real. As in: some people might end up doing it.

how many people would look at this commute (at least 3-4 hours each way) and think its doable?

I don't find 2-3 hour commutes all that unusual, though just an anecdote, in PA I knew families which would commute via car to NYC 3 hours in traffic. On the commute if there's room to work, 3-4 hours could represent a decent chunk of thinking/coding/email time.

I work in Orange County, not far from the airport (and even closer a few years ago) I did the napkin math on commuting from Arizona every day at one point, and it definitely worked out. I would've saved money doing that.

Of course that presumes that my sanity has no value, but I'm not certain how much worse it would have been than some people's driving commutes.

BCN-London can be had for E$34 round trip. LA-MEX goes for US$400 cheapest average seat. That makes all the difference. Maybe try Tijuana, though.

Nah, the Mexican government imposes a $100 tax on all international flights.

I'm still convinced that we're just a few years away from a time when people don't have to commute to an office just to sit at a computer. That company in London could save some money and so could the employee in Barcelona if telecommuting were an option.

I think a lot of geeks have a vision of a perfect world when a detailed, unambiguous spec arrives in their email, they write the code and upload it, then the money is transferred to their accounts. There is a fundamental flaw with this concept, which is writing a spec that good is more work that just writing the code yourself. And the guy who writes that spec will need to collaborate with others enough that having everyone in the one place to do that makes sense. Videoconferencing works if you want to discuss something with which you are both familiar with someone you already know, and this admittedly is a large part of many people's jobs. But for everything else, you really do need to be there.

I think videoconferencing sucks because the tech is so primitive. In 10 years we'll have proper videoconferences which are using augmented reality and have sufficient quality to replace physical meetings 90% of the time.

Of course, even conference calls suffer from the use of low-quality software and hardware. For some reason companies tend to use $1 microphone and $5 speakers for conference calls.

At one job, we had a full, no-expense-spared, telepresence suite. For formal meetings or presentations it was acceptable, but you still had to think about it a bit (e.g. pay special attention to whose turn it was to speak next, compensate for the body language or lack thereof, etc). For just hanging out, which is how most collaborative thinking work actually happens, it was useless, even with the best shared whiteboards money could buy. If you had 10 hours to work on a problem, you'd get far more done if you spent half of them traveling and actually stood in a room with everyone around a real whiteboard.

If someone cannot write it, he will want to say it, and if he cannot even say it, he will want to come over to gesticulate.

God that annoys me. He can explain things properly, so assumes moving his arms around will make it clearer.

I could have made the exact same statement 10 years ago though. And where are we? (I think we're in a place where we realize it's really difficult to replace face-to-face.)

When I used to work in banking - they had high quality equipment from Tandberg (now Cisco) - and it was genuinely as good as watching SD TV.

Nothing beats face-to-face, but proper kit gives decent results.

I'm sure there a jobs in this industry where a constant physical presence is needed. But many of us are professionally employed and notice that we go into an office every day and then communicate entirely over the computer. Given that situation, it makes sense to conclude your job would me more efficient if you simply telecommuted (provided you wanted to).

The rewards of telecommuting become even more pronounced for those of us who live in expensive cities and are forced to either spend exorbitant amounts of money to live near the office or else waste a lot of our lives commuting in traffic.

I used to think that too, but as I have gotten older I have realized that I'm absorbing huge amounts of non-verbal data just from the ambience. People put in a email what they want the record to show, but what they actually want from you is something more subtle. A 2-minute chat in the corridor can convey far more information sometimes than a whole day exchanging email.

I realize this is a personal issue and others certainly don't feel this way, but telecommuting every day would be so ridiculously lonely to boot.

Telecommuting doesn't mean that you have to be alone. You could go to a shared work space that is closer to home, or to a coffee shop, or the mall, or a park.

As someone who spent years working out of coffee shops nearly every day, I can say it is definitely not equivalent to the level of engagement and concentration provided by a proper workspace.

Oh, you can get a lot done there. But it's no office or home office. And the home office is monotonous and lonely.

There is a fundamental flaw with this concept, which is writing a spec that good is more work that just writing the code yourself.

Some in Congress should probably read this, too...

The irony is that this is positioned as something that devs want to happen and businesses oppose. The reality is that the large companies want to offshore work as much as possible. This would be extremely bad news for developers in first world countries, if it weren't for the fact that they only have jobs because it works so badly in practise.

So you believe the job of an engineer is "just to sit at a computer"? You dont make other useful contributions outside of that?

There's always the occasional sperm donation to eager groupies :)

Haha

So you believe the job of an engineer is "just to sit at a computer"?

The job is to write code, which could be done from anywhere (home, coffee shop, on the train, at the beach). The other stuff like collaboration, meetings, architectural discussions, etc., could be done virtually or scheduled for, say once a week. The benefit of a few hallway discussions is far outweighed by the 10+ hours per week spent commuting to the office.

There is a HUGE number of engineer positions where the job isn't just "to write code". If that's all you're contributing then you're in for a very limited career.

Having worked in both I realise recently. You can stick to the corporate world. Get told to use Java, Oracle, etc. Get well paid. Have decent career prospects. "Just write code".

Or my current position which is to develop the in house database, in the language if my choosing. Get to experiment with new technologies. Design it all myself (so no one to blame if it goes badly).

I would be better paid in the first job, but its way less interesting.

In the corporate world in the UK, most developers move onto more businesses roles anyway. Due to outsourcing, more respect and what not.

Only in the sense that a civil engineer's job is to pour concrete, or an electrical engineer's is to burn coal.

"The job is to write code"

Eh, this is kind of what I was getting at. This view is insanely simplistic. Outside of writing code I feel like people make contributions to the product in discussions, train their more junior peers, interview prospective new team members, do a code review for someone else, etc. The job is not to just write code. This is my point. If you see it that way, you're looking at it the wrong way.

In my impression, all valuable contributions made by an engineer can be expressed by a set of commits to a set of files. I do not believe for a second that contributions that cannot expressed in that way would actually be valuable. Can you give us one example?

Your impression or your experience working with/as software engineers?

Here's what i did last week excluding bureaucracy and writing code. Talking to people to get requirements. Mentoring junior engineers. Discussing solutions with colleagues, code reviews, spec writing, spec review.

The spec writing is expressed as commits to files (we use a wiki) and some of the rest could be expressed as commits to something but bandwidth would be lowered converting it to text

Your boss may not understand what exactly you do, but he can surely see you come in, sit at your desk, and see you leave at the end of the day. How is someone who cannot program his way out of a paper bag otherwise going to manage things?

Peer assessments?

Task lists and measuring customer satisfaction?

I think a lot of companies will push back against this. A lot of service companies don't really make anything but provide a kind of social network based around offices. If you eliminate the offices the company looses power and could be dis-intermediated.

This is silly. Just go southwest a few miles.

There is, for instance, a flat steps from the London Overground in South Norwood (http://www.zoopla.co.uk/to-rent/details/30891717) that is going for £400/month (€470/month).

(It's unclear why you'd want such a long commute, versus living in far-away green suburbs by the train.)

It's just away of saying rent in London is ridiculous. No one in their right mind would do as author said.

But Barcelona is nice. Bow? Not so much.

From the description:

"Men Only / No Females"

What the hell? How is that legal?

it isn't, landlords do it regardless

I'm curious, what's the reasoning? This seems really really strange to me. My experience has been that female roommates have done the least amount of damage to any apartment I've shared.

not a clue, religious reasons maybe?

Technically a landlord is allowed to be very particular (e.g. discriminate) if they are also a resident in a dwelling.

I've seen tons of Craigslist ads for roommates that say "females only".

The irritating thing is that they usually say it at the bottom of the advert instead of in the title, so you waste time clicking on the link and reading it.

In New York City -- if I recall correctly -- the non-discrimination laws don't apply if you have a small owner-occupied building (less than six units, I think), or if you have shared living spaces (like a shared kitchen or bathroom). While it might not be fair in the grand scheme of things, it's somewhat understandable, since the vast majority of these buildings are essentially houses with a spare room or two that the owner rents out.

I assume other cities and countries have similar exceptions in their laws.

That's a room, not an entire flat!

It's a 4 hour commute!

Why would you live in Central London? You can commute for an hour into Liverpool St and get much cheaper rents.

There isn't a single house or flat (for any price whatsoever) within 4 hour by train radius from Liverpool St that compares to a three bedroom in Barcelona.

Not that you'll have any time to enjoy your presumably lovely 3 bedroom flat in Barcelona with two 4 hour commutes each day.

How far can you get on the Eurostar in four hours?

Well sure, the selection of tapas in England is rather limited, it's colder and rains more, the local football teams aren't as good and you have to speak English all the time because Catalan and Spanish aren't very widely understood. But if you can't beat Barcelona for living, you'd probably want to work there too. You can definitely get similar space for your money to the Barcelona flat highlighted in the blog post in a perfectly adequate dormitory town a short commute from Liverpool Street, if Southeast England is more your thing.

I'm not convinced that house prices area actually a big deal, except as an indicator that more housing should be permitted (by zoning laws).

There are two arguments that are typically given.

Firstly, you want to encourage people of different incomes to live together. I don't believe that this is a worthy goal. It's not clear that the benefit to people on low incomes outweighs the loss to their high income neighbors. And the richest 1% always find ways to isolate themselves anyway.

The second argument is that welfare should taken into account the cost of living. I also believe this within reason, but the welfare system already does this in many ways. In fact, London's "one bedroom rule" is a clunky way to do precisely this: it lets people live where they like, but prevents people from purchasing an excessive "quantity" of housing.

Or you could live in Birmingham, in a £650/month one-bedroom apartment 10 minutes away from New Street station, where you can take a 70 minute train to London Euston.

Sure, Birmingham is not Barcelona or London, but I'm not sure how you'd enjoy them by living most of your off-work time in a Ryanair flight.

A yearly season ticket from Birmingham to London incl the tube is £7,252 (or £5,240 without the travelcard).

A peak return ticket is £158 (this Tuesday, trains arriving before 9am)

I like this article as a thought experiment, but I think in practicality, it would probably be miserable to fly to-and-fro 4 days a week.

The main cost that was ommitted that would give us an idea whether the commute is worth it is the opportunity cost (http://en.wikipedia.org/wiki/Opportunity_cost). While it'd be difficult to estimate how much the author's time is worth, if we assume that he/she gets paid an hourly wage of W, and it takes H hours to commute to and from London, then the opportunity cost would be something like W x H. If that opportunity cost is greater than the 387€ in savings, then it would not be cheaper to commute from an economist's perspective.

I just moved to North-West London Two weeks ago and can confirm these numbers. It's an interesting write-up and I can see that it's been written for the mathematical demonstration rather than the practicality but it does give food for thought.

So he can live in Barcelona and get home at 10 PM and leave for the airport at 5 AM.

Who cares if you live in Barcelona if you're asleep all the time?

Hey, in Barcelona, that means he's getting home just in time to go out for dinner.

I left Barcelona in 2007 to come to London and although the cost of living is higher here ( I live in West Hampstead ), salaries and opportunities are also much better. Granted, I spend more money per month in fixed costs than my entire salary in Barcelona, but I still save more than I spend.

Also, from this article it seems that rents have actually fallen, because in 2007 I could not find that kind of accomodation for that price and I was strugling to save any money compared to now.

I guess the housing market collapse in Spain has actually impacted the crazy Barcelona prices of mid 2007.

I moved in 2008, and the rents have gradually been going down. Usually involves a bit of negotiation with the landlord, as legally they are allowed to raise it in line with inflation each year. Or moving out, which is a hassle, and ends up costing. So fine if you are moving anyway, but otherwise it depends.

Had a friend on UCSD that rented at Tijuana and crossed the border everyday to San Diego.

Was this recently? The hassle/delay of crossing the border has really gone up in the past 10 years. Both the Mexican and Canadian borders, actually.

5~7 yrs ago. I asked the same thing. She said she had a "pass" that allowed for faster crossing, and it was pretty common.

I just moved to London, less than a month ago.

I decided that I was willing to pay a premium for my <25 minute commute to work (close to Tottenham Court Road). And as long as other people think the same, rent will go up. Pretty standard supply and demand. Everyone works in the center, and nobody likes to waste 2 hours of their day hopping trains and buses.

So this is what you get, take it or leave it, I guess...

Where do you live (and what did you get, and what does it cost), if I may ask?

This post is also a great idea to start a HN Barcelona meeting :).

It's not the point of the article, but 4 hours wouldn't be that bad per se. I would hate to be on an airport every day and being with ryan air every day (I rather pay a lot more than fly ryan air personally; I am almost 2 meters in length and quite bulky in width due to food and daily gym; ryan air is cruel punishment, no matter the cost), but when I still worked in an office in the Netherlands (granted, that's over 10 years ago), I would spend 2.5-3 hours at least in traffic jams. At least in a plane you can read a book or do some work. Sitting in a car, usually in the rain/cold, foot on the break ready to move yet another 30 cm I might even consider worse than ryan air...

so 1500 GBP is about 2420 USD 1 bedroom in the good part of SF, USA cost about 2500/month.

Sure, there's no council tax and utilities are cheaper. Still, its pretty close.

I bet Paris ain't so far from that either, and let's not talk about NYC.

Basically, all of the large tech cities prices are "batshit insane".

The only hope I see, barred 1h30/2H by plane travel time, as the author suggests.. is remote work whenever possible. You can then live 3-4h away from big cities (so you can still get together if needed), and prices are slashed by 10.

How exactly does one qualify x as cheaper than y when the comparison requires y to omit a massive economic component: the opportunity cost or value of one's time?

Additionally, why propose such an intrinsically inefficient model? What about using a hostel on M, Tu, W, and only fly in M AM and out Th PM? Monthly commute ~28 hours, quality of living benefits, and probably save even more $.

Can someone from the EU comment on the potential tax benefits of an international live/work arrangement?

Ryanair lies about flying to 'Barcelona' - it actually flies to Gerona, about 95km away (1hr by ground transportation):

http://gospain.about.com/od/ryanair/qt/ryan_barcelona.htm

Although, Gerona is itself a beautiful city and would be a nice place to live.

Actually, your link says:

"However, Ryanair have recently decided to start flying to Barcelona from around Spain and a few other airports in Europe."

Now how much does he earn per hour? How much time does he waste on a long commute each of those four days a week?

Funnily enough, I came to the exact same conclusion last week while visiting London, from Dublin.

€30 return flights and it's faster than Barcelona, 1hr flights (and you can show up 45 mins before flight leaves for IE->UK).

Even using Hotel Tonight while I was in London, accommodation was €200+ on a Tuesday night.

To Barcelona hackers - which districts are the best to rent a nice modern-built loft/apartment:

- from quality angle?

- from price angle?

Edit: formatting

quality: sarria-sant gervasi, eixample. price (without being bad areas): nou barris, sants.

It is well established that prices RyanAir advertises are not prices passengers pay.

Given the option of the hassle and commute, people would prefer to just live in London. Which is the whole point- real estate pricing is efficient in this case.

> It is well established that prices RyanAir advertises are not prices passengers pay.

The prices on the website are exactly what you pay, as long as you pay by debit card and don't check luggage.

Source: I live in Barcelona, and travel monthly to London.

People sure seem to hate a lot about Ryanair. I also flew with them regularly back to the UK when I was living in Ireland. I tried a few other airlines (FlyBe, Air France, BA and Aer Lingus) but found Ryanair to be the easiest and most reliable.

> It is well established that prices RyanAir advertises are not prices passengers pay.

Not true. An EU regulation in force since 2008 makes that illegal [1]. Ryanair, for all its other faults, abides by the law.

[1] Article 23, Regulation No 1008/2008. PDF: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2... "The final price to be paid shall at all times be indicated and shall include the applicable air fare or air rate as well as all applicable taxes, and charges, surcharges and fees which are unavoidable and foreseeable at the time of publication."

Just wanted to add that the apartment that the article refers to is located in a really nice place of Barcelona. Definitely not the center, but relatively close to FC Barcelona stadium, and close to the rich part of the city.

It might at least get you a HON circle membership if you take Star Alliance flights but daily use of Ryan Air can't be beneficial for your mental stability.

My friend works for one the City. He is permanently renting hotel room nearby. He says it is actually cheaper compared to normal rent.

East London is where it's at! It is cheaper to buy than rent though!

Time to move to Texas!

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