Learnings from London Trip
I’ve been planning for this trip for almost 4 years now, but so many hurdles came in between. Finally, with the reason of visiting Swaathi’s graduation ceremony, I made it to London. It was a week-long trip, it was supposed to be a fun trip but it turned out to be a learning experience for me.
What is London?
Before the trip what I envisioned about London was, it was a broken city more like how New york was, like filled with robbers and pickpockets. But all I saw was calm and nice people around, didnt face much of racism as well.
Moreover, London was good in few things, the neighbourhoods were clean and calm like what I saw from the trips to San Francisco. It had a bunch of skyscrapers but they weren’t overwhelming.
Let’s talk about what I observed.
The Rent vs Mortgage Ratio
In India people use to say buying an house is a challenge, I always wondered why. Also here the purchase of an house is a milestone in your life and people try harder. The prime reason is that the rent in India per square feet is very less compared to the mortgage. So when you buy an house in EMI you wont be able to match the rent to EMI and hence you pay extra from your pocket.
In contrast, in London the rent is very high compared to the mortgage. So people prefer to take a mortgage and buy an house and park their rent in EMI. This way they own an house in 20 years and they can sell it for a good price when they want to move out or retire.
Here are some numbers for you to understand better.
In London
- House purchased for 250,000 GBP (Which is around 2.5 Crores in INR)
- The average interest rate in UK is 5-6% for housing
- So you pay roughly 15,000 GBP per year as EMI which is almost the same as the rent for a 1BHK house in London
In India
- House purchased for 2.5 Crore INR
- The average interest rate in India is 8-9% for housing
- And here you pay 2,00,000 INR per month as EMI which is almost 3 times the rent for a 1BHK house in Bangalore
The Public Transport
Public transport is heart of London.