I might be confused, but doesn't the fact that you're turning down work mean that you haven't yet plateaued rate wise? I mean, if you're turning down work doesn't that mean that you can increase your rate and still be doing the same amount of work?

It would be intuitive to imagine that the rates companies are willing to pay vs demand would form some continuous curve. i.e., as you increase your rate, the demand would steadily decrease allowing you to find the optimal balance point.

However, my experience, though limited, has offered a very different picture. The vast majority of companies have a number in mind that they consider to be the standard rate for development work in their city. It looks like in London that's about £50/hour. Once you attempt to exceed this rate, regardless of qualification, the number of companies willing to hire you drops significantly to the point where you would have trouble finding steady work.

There are exceptions to this rule on both sides but most freelance developers will face this ceiling until they master the skills to overcome it (which, as you can probably guess, are sales-related, not technical).

Agree - conversions dropped by approx 50% when I increased my rate from £50ph up to £55-60ph.

It seems to be a super-sticky price point.

This is because you are dealing with clients for whom £50 is the upper bound rate of the developers they deal with.

If you want to increase your rates and have a skillset for it, try doubling your rate and going after clients that are used to paying double your rate.

I have the problem in reverse. I get well paid for my part time remote gig when it's on (say around £80ph - I'm not london based). Local gigs want to pay around £45-50, and given my current situation I'm reluctant to commit to full time at that rate. So I quote higher and they lose interest.

If only you two could join forces during his transition away, eh..

you're gonna love learning this:

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

On average, how much work are you requested to do for each project?

Also, do you only develop the backend, or do you have to do the entire frontend as well?

I would love to have a job that's just freelance backend (application logic and database setup) web development.

Find a partner :-)

It's much easier when two people can look for work, and on getting the jobs, you know that you can split it based on the bits you like doing.

Especially good if you both have an understanding of backend and frontend.

Thanks for your honesty and frankness. Good luck with your totally different business :)