How are people affording to buy in London?

[absolutelyeverybody]

Looking on Rightmove at pretty standard terraced houses in ok but not super posh areas like Clapham, Fulham, Wandsworth - houses are £2m!

Who is buying these?!

Is it simply a case of family money/help??

And further in to zone 3, houses are £1m!! How are people affording this's?

A lot of people mid 40s ish up have made a ton on London property so that fuels a lot of it. Very different for younger people.

I don't know anyone who bought without some form of help.

Tbf if 2x adults are on £100k each they can afford the £1m.

With today's interest rates?!

Look at London flat prices post Brexit, many have hardly changed in value.

I live alone and managed to buy a tiny 1 bed in zone 5 (deposit from divorce settlement). Definitely couldn't afford to buy any closer to town!

My in-laws house was 60k in the 80s, worth 2m-2.5m now. bought on one salary

Affordability matters, people often stretched themselves, maxing out mortgages and interest only mortgages which often paid off with the years of low rates.

But young people aren't having dc or are moving out which is a shame as imo cities thrive on new blood.

schoolsweek.co.uk/unfilled-primary-school-places-up-6-in-a-year-as-falling-rolls-bite/

Any younger people (by which I mean up to early 30s) buying in areas like Fulham, Wandsworth now are buying with family money/inheritance. Maybe not from super rich families but parents/grandparents may have downsized and released the equity from their own property.

There’s hardly anyone early 30s and younger buying houses with their own money in those areas now - e.g. with a deposit they saved themselves and a mortgage paid from their own salary. Maybe an apartment but not a terraced house as they nearly all cost upwards of £2M. You’d need a huge salary to do that and most people on those sort of salaries don’t start earning them until mid 30s+
When we bought in the mid-2000s it was possible to buy a small terraced house in those areas on a decent city/finance salary without any family money but not anymore

A lot of ordinary working families in London have massive mortgages. It’s normal for couples in their late 40s to still have huge mortgages. I don’t know a single child in dds class who has a SAHP.

I have family in Yorkshire and they think this is bonkers. Ironically they’re the ones with inherited wealth though, not me the Londoner!

My guess is they are drawing on equity, some family money and decent saving potential.

We don’t live in London, but our first house was £800k+. We afforded it by having good salaries (but we are definitely NOT in the £100k each per year bracket nor will we ever be anywhere close to that!). I did have a bit of inheritance and we saved probably somewhere around £150-200k in 10 years). So we have a very good LTV.

We have no intention of ever moving, but give it a few years and I’d think we’d have significant equity in our house. If we took on a similar sized mortgage again, we’d probably be approaching £2mil. Now I wouldn’t want that! But I can see how it’s possible if we wanted to stretch ourselves. If we’d bought in our 20s, like some friends did, we’d probably be even better off, but we couldn’t afford it back then. We had to put the £250 mattress from Dreams for our first flat together on finance. 🙈 The man in the shop actually laughed. We definitely weren’t in a position to buy a house back then. But in time we were.

I think you need a "leg up" from somewhere. Most people I know in London, the leg up was in the form of a 6-figure gift from parents. For others it is a mega well paying job. For me and DH it was living abroad in a cheap / low tax location for 5 years in our 20s and saving the amount for a deposit. It's not fair.

@mindutopia how did you get a 650k mortgage on low salaries?

It's also making areas less diverse as 2nd gen immigrants don't often have the family money going back to gps to help them. Many people in London were on social housing but again that's massively reduced.

I’m in my thirties and live in London - and truthfully I know vanishingly few buying houses in places like Fulham or Wandsworth. You’re looking at £2m+.

The people I know with houses in those areas have had them 15+ years ie bought them for less than half that price.

Buying a £1m takes a chunky family deposit and 2x £100k incomes, which isn’t that unusual in London.

I agree with the PP poster of the experience of looking at houses work eg £2m and thinking they seem very modest choices for people earning…. Maybe £4-500k a year. Very confusing.

I know a lot of people (me included) who are having a bit of a crisis over the inability to get to ‘the next rung’ on the property ladder even with excellent jobs as it might cost £1m+.

I know life isn’t fair, but the discrepancy in what housing you can afford based on basically when you were born is appalling.

I can’t see us moving now as even if the bank will lend me more money… a £5k+ a month mortgage to live in a slightly bigger terraced house seems… possibly insane?

Particularly when you have childcare costs (another £2-2.5k per child…!)

They do but there are always new supplies of young adults wanting to experience living in London while they start graduate careers - even if they move out at a later stage.

I know life isn’t fair, but the discrepancy in what housing you can afford based on basically when you were born is appalling.

Ain't that the truth!

@MidnightPatrol exactly its not just what you can borrow, but who wants to pay thousands to service interest now for a basic terrace!

@Twiglets1 I'm not saying no young people are coming to London, I just think there are less & they aren't staying as long.

And £100k+ in stamp duty.

Fulham hasn't always been expensive, it was gentrified and is so now but it wasn't always the case. I was born in West London and grew up in both West and South and I find many people think that West = posh but if you were born in London and childhood was 80s, 90s you know that isn't the case.

Many people who were born in London if they are in their 40s, 50s have probably got a head start with family help, parents who have had windfalls from just living there since they were born 70, 80 years ago! I know loads of people like that, family homes in Clapham, Islington, Fulham and they have helped their offspring.

However, a massive issue in some areas where family, friends I know live are empty houses, portfolio properties and it ha totally changed the dynamic of these areas for the worse!

And £100k+ in stamp duty.

oh yes!

You did say cities thrive on new blood and I agreed but also made the point that London is full of young people & has a never ending supply.

My friends (mid 30s) who live in those areas are either both earning 100k+ or have inherited/been gifted large sums of money.

We earn less so live further out.

The birth rate has dropped very drastically though - schools are closing down. It’s down by something like 25% this decade.

The only people affording families in the inner zones are increasingly just the very rich and those who get council housing.

Come on, Fulham was totally posh in the 80s and 90s! Full of Hooray Henrys and Henriettas.

If you went back to the 40s and 50s you might have a point.

My dad (born 1938) always thought it was a hoot that Battersea was considered desirable. In his dad it was a total dump, think Up the Junction. Of course it’s been gentrified for at least 30 years now.