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?

I’m not disagreeing with that (the birth rate has dropped in lots of other areas too) just with the suggestion that London may lack “young blood”.

London continues to thrive because it is still an extremely attractive city for young people to move to for studying or work, both from UK and overseas.

We are in our 30s with two DC under 5 and we live in SW London. Our joint household income is £150k and i suspect we were by far the lowest household income in our NCT class. I think the amount of money / family money sloshing around London is just inconceivable to many. We bought our house for around £350k around 10yrs ago. Now it's probably worth £600k. Our NCT friends would have spent £700/800k 10yrs ago a mile up the road and are now in houses worth £1-1.5m. Another 10yrs, stopping paying nursery fees, more promotions, a load of equity in the current house, potentially inheritance money and you do start to see how it is possible to move up into the £2m + bracket whilst still in the "young family" stage.

@Twiglets1 but I also referenced children and fewer children and families does have an impact. A further loss of 52000 children over the next few years is significant to me. London is the only city here getting older.

@Twiglets1 I think we are reaching a tipping point for families though, as it’s just so insanely unaffordable to have a reasonable quality of life.

If the mid-senior professionals can’t raise their kids there, they’ll leave. That’s not good for London. If entrepreneurs can’t afford to live there and set businesses up, that’s not good for London.

Hard to take risks and be creative when survival is so expensive. And even with young people moving here - they’re doing so in smaller numbers and not living in the inner zones. The grads who work for me now live in totally different areas to where I was - as they’re unaffordable.

Yes, Zelensky owns a few.

Zelensky is not an oligarch. He might well be backed by oligarchs, Ukraine being a fairly corrupt country, but that doesn’t make him an oligarch.

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

People don't realise the scale of the problem because most don't understand the funding model. It will make London less attractive to young families, you really don't want to be putting your dc in a school that has already reduced its PAN and is still not full.

I don’t see the problem with having fewer children in London. That makes me sound like I dislike children which I don’t ( got 2 of my own).

It would be a problem to have fewer young adults but not so much fewer children, in my opinion. There will always be families in London, though I can see the divide growing between rich families & those in social housing.

We have good salaries?

"According to research from the Resolution Foundation, the median age in the capital increased from 33.8 to 35.8 between 2011 and 2023."
"This makes London an outlier compared to many of the UK’s other major cities. Bristol, Newcastle, Cardiff and Nottingham have all gotten younger since 2001."
"“Many major cities across the midlands and the north are getting younger. London is the one city bucking this trend,”

“Changing immigration flows since Brexit, combined with falling birthrates from a baby bust steeper than the national average, have worked together to age the capital over the past decade.”

@Twiglets1 but fewer children here now means fewer young adults in the future because the data already shows fewer young people are moving here. I already dont think it's as exciting a city as it used to be or that increased inequality is a good thing. We will have to agree to disagree.

Beleive it or not, some people have more money than you. Not everyone is struggling

Graduates on training schemes in big city financial institutions/lawyers can be earning over £100k within 3 years of leaving uni.

a couple earning that each can easily afford a mortgage on a 2m home by the time they are 35 as their income will have increased massively over those 10 years. These people congregate around exactly the areas you have mentioned OP
I think some people don’t realise how much others earn.

The difference between 33.8 to 35.8 is not huge though … both are still young and economically active.

Covid did temporarily affect the numbers of young people moving to London also, as less point living somewhere that expensive if you’re not commuting to work. Now more people are being recalled back into offices I can see more young people moving back to cities.

It absolutely wasn't 'totally posh', it is/was home to a very deprived council estate, equally, it was definitely affordable on an average middle class income, just like lots of these places. I know as most of my family and DH's fit into that category.

I think some people don’t realise how much others earn.

There aren't enough high earners to buy all the expensive houses though. Even in London there aren't millions of people earning 6 figures.

These houses would require £4-500k of income today though.

10 or 20 years ago people on far more ‘normal’ professional wages were buying these houses.

Most people in them wouldn’t be able to afford to buy them today.

It's really shocking that this is celebrated, personally a whole generation missing is not somewhere I'd want to be living, a bit like those elderly out of town villages, strange to not have all the ages represented in a community. It isn't just London, it is happening in other areas, where I live, lots of gorgeous period flats and properties overlooking the sea (or not) being bought up for air BNBs or again, foreign investment portfolios, it's awful, the schools are closing down and it changes the whole vibe of the city I brought my DC up in!

That's a bit of a false allusion though as it isn't as simple as that and pretending it is, may be in your interests if you have a portfolio of properties for example and like the status quo but it doesn't have to be like this and it can be challenged it's whether there is political will to do so!

It’s often the combined equity of 2 London flats.

people of my age now (50) when they were 25 were buying flats when you could get 105% mortgages and a London flat for £200k. I bought a £350k flat in a very posh area (that was a lot of money then) with a deposit saved from bonus’ and a sub prime mortgage.

people were just wealthier in general then.

i sold that flat for £700k , so get a couple who did that then bought a house together and you’re over £500k in straight equity cash in 10 years. Many of us are coming to the end of our mortgage terms now and have just benefitted from house price increases.

dong underestimate bonus and redundancy payments for high earners too- I work with plenty of people who get 150% bonus

@Goldenbear Yeah I find it odd that some think it's nothing, the whole change in demographics is completely new.

These houses would require £4-500k of income today though.

And people I do know like that tend to
live in places like Surrey where they actually get a decent house for their cash.

people were just wealthier in general then.

wage stagnation and frozen income tax bands has also played a part.

people of my age now (50) when they were 25 were buying flats when you could get 105% mortgages and a London flat for £200k.

And of course mortgage lending tightened up after 08. As a teen/student I had a saturday/holiday retail job - some of my colleagues bought flats on 105% mortgages/interest only etc. It was just so very different then.

Yes, to me, 'Youth' isn't just graduates starting out in their careers, it includes teenagers and children living in family homes.

Absolutely