How do Bankers with less than £100k cope with London crazy housing?

The housing market in London has been a volatile situation for some time. Demand has seen housing prices rising, in some cases as high as 18 percent. In a desirable neighborhood like Notting Hill, residents can expect to put out as much as $1.7 million (1 million pounds) for a one bedroom. This has created a challenge for the new breed of banker. These 20-somethings prefer lodgings close to the City. Unfortunately, owners are aware of this and that can mean high prices even for someone earning almost six figures annually.

Being in the business of money, bankers seem to have found a solution. They are taking in lodgers. One West End private equity professional says it’s happening more and more. Bankers are flat out buying properties and taking in tenants to help maintain its costs. Many see it as a perfectly logical move. Prohibitive rental yields are forcing homeowners to use rent money to pay mortgages.  Even under these circumstances there are plenty of in-demand regions like Notting Hill and South Kensington well out of reach, but if you wanted to live in Dalston, Stoke Newington or Bethnal Green – all desirable neighborhoods – it could be done under the owner/tenant scenario. It’s an ideal situation if owners take in other bankers. There are certainly plenty looking for accommodations and everyone will be working long hours, minimizing potential personality conflict and social unrest.

The aspiring entrepreneur is definitely using the London housing situation to their advantage. One 30 year old equities banker that’s worked for a number of U.S. banks and is currently working at a fund company has invested in several London properties that he maintains for a steady revenue stream. He believes it’s a logical step. “If you’re working in finance you’re very ill-advised to keep too much of your net worth in stock. If the markets tank you’re going to be pretty f-ed. You’ll lose value on any bonuses that are tied up in stock and you may also lose your job. It makes total sense to diversify into property.”

The concept of bankers renting to bankers is becoming a common practice throughout London. It certainly saves time. One doesn’t have to go through agencies and agents, or screen applicants from all walks of life. By sticking with banks and firms like BNP, HSBC  or RBS, homeowners can connect with professionals like themselves. The newcomer to the industry can find affordable housing in a market that’s ready to bleed them dry. And with no end in sight to current rising rental yields, bankers renting to bankers is a win-win situation for everyone.

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