This article was originally published in December 2017.
Excited to start their new jobs in real estate private equity and experience the life of glamour and money in finance, Jordan and Patrick are hit by the sobering reality that is London prices.
Read the first part of this series
Patrick: I was imagining myself sipping Dom Perignon and driving an Aston Martin around Mayfair, but instead I am spending 95% of my salary on a tiny 1 bed and £6 Stellas in a dark and dirty pub in Zone 2. London is bloody expensive. Eye-wateringly so and there is no getting around this.
Jordan: Oh come on, it’s London! What did you expect? It was never going to be affordable at the start of our careers. And while I personally think that it is quite ironic that two well-paid young professionals are priced out of the very product/service that our industry is founded upon, we are still doing way better than most other 20-somethings.
P: There is absolutely no denying that. Bizarre, isn’t it? And while I work in real estate, ironically the people I have come to hate the most are London estate agents. Absolute vultures, circling above our heads bombarding us with voicemails and emails to squeeze us for every penny we have on rent. We definitely shouldn’t have provided them with our personal email addresses. Clearing out my spam folder took forever…
J: Lesson well learnt. In terms of rent, there was a golden rule within the previous generation that your rent should not exceed 30% of your after-tax income. I think I am on 60% right now…
P: It was a pretty fun year though!
J: Yup! It helped that we both worked within five minutes of each other. It has its benefits that the PERE industry is basically congregated within a one mile radius from Selfridges. It also helped with reducing the areas that we wanted to live in to the western Zone 2 tube stops on the Central and Jubilee Line, which are thankfully not as bad as other lines can be during rush hour. Although it is still not a very pleasant experience.
P: I think apart from the flat hunt, settling into London wasn’t actually that stressful. We had our bags all packed and ready from when we left uni. It also helped that many of our friends made the same move into the city and together formed an already established social network.
J: One thing that I realised after a few months of living here is that the huge number of people living here made getting to know new people both easier and more difficult at the same time. You obviously have your work colleagues, but I am always hesitant to blur the professional and personal lives too much.
P: Well, people generally have less time compared to the uni days for hobbies or interests so it’s harder to meet people.
J: But it’s not as if there are no clubs/interest groups or plenty of activities to attend in London. The size of the city and work schedules just raise the barrier to entry for these activities. I think the reason why both of us have reduced our time spent on the pursuit of other interests is due to two factors: the first one being the unpredictable nature of our jobs, which can fluctuate immensely depending on deal flow, and the second reason being that the free time that we do get often ends up being spent in the pub.
P: Hahaha, or a club! Would you say you are drinking more or less than as a student?
J: Definitely more. When people initially told me that real estate is a relationship-based business, I wasn’t yet quite aware how much of the relationship establishment was being done at the pub on a Friday afternoon. Not that I am complaining though.
P: There are worse things in life. Do you still remember the feeling when you received your first pay slip? I for once was relieved that I could finally pay back the overdraft I accumulated during the first month of work. Paying four weeks of rent plus the six week deposit was pretty painful.
J: Quite a mixed bag of feelings to be honest. On the one hand a sense of pride, but on the other hand I had a bit of an imposter syndrome, since we were getting paid to train and learn, whilst not adding much value initially. I think my father was happier than me, since he could finally stop funding me after 21 years.
P: It definitely feels better though to be finally able to buy things for myself with my own earnings than being handed the money without anything in return. Maybe it gave me a bit too much of a feeling of accomplishment given how quickly it went. There was always slightly too much of the month left over at the end of the money.
J: Saving money was pretty much impossible. I would always start counting the days until the next pay cheque a week after payment. Particularly during the first couple of months.
P: Sure! Sum it up: paradoxically even industry professionals find it difficult to find adequate rental accommodation at the start of their careers and to get on the housing ladder on our own.
J: And be prepared to spend a lot of time at the pub outside of work or because of work, depending on how you want to justify it to yourself. And if you find any pub that offers pints for less than £4 within Zone 2 it is a keeper (and please tell me which one!).
