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?

We saved a 5% deposit 20 years ago and bought a flat. Sold for 150k profit 4 years later. Bought fixer upper terraced house. Sold for 650k profit 12 years later. Bought bigger house using that equity and savings DH and I had amassed from work bonuses/living abroad on ex Pat package and renting out house plus 2 professional salaries.

£0 was gifted or won. Neither of us work in banking so no bankers bonuses.

The people we sold the flat and 1st house to both had help from family to finance the purchase.

£0 might have been gifted but a 5% deposit and 650k of growth in 12 years absolutely falls into the “won” category. You were lucky with the timing, the landscape for people mortgaging in London today is totally different.

Sold for 650k profit 12 years later.

I just can't imagine that in today's landscape, I really think those days are gone in the main. Even when you look at some of the areas @absolutelyeverybody has mentioned in recent years prices haven't changed that much.

I've wonder this for decades.

I've also watched house prices go up where I grew up since to point only a few I grew up with have managed to buy - most have left for other areas or are in HA housing or private rentals in middle age. They are doing a massive amount of building urabn spral petty much having eaten my once rural villiage up.

Area we are in bucks the trend for children - more than surrounding areas - it due to cheaper housing - but in last decade prices have risen here as well substainally. Same for where DH grew up people on good wages can't afford the cities so move to the town - rising prices and leaving locals on lower wages prcied out.

My DC may get some inheritance from DGP if they still have their houses as asset when the died in next decades which my mean they get on housing ladder.

I suspect with London it mix of two high wages and family help or they bought earlier all of that.

Wandsworth has been expensive for a long time.

my grandma sold a terraced house there that her family had owned since 1918 in 1988 for nearly a million and it had 1920s electrics and heating.

the new owners gutted it (which frankly it needed as it was always bloody freezing - only heating two coal fires).

Clapham and Fulham have been out of reach for years! What are you classing as super posh?

Wandsworth & Fulham did have cheaper bits

People saying that £200k is crazy money to live on... it's not at all in London.
Me and Dp have a combined income of £180k ish. We do not have a lavish lifestyle at all. Our mortgage is insane. Bills are insane.
We do live in London and in a £1m+ house. But we can't afford to do it up or go on fancy holidays,

If we compare ourselves to neighbours locally, they are all doing massive extensions, drive 2 cars, go to USA, Japan etc.... and have cleaners and gardeners. This is because they have next to no mortgage and they will also inherit in the next 5 or so years.

Neither me nor my DP got help with the deposit and we will not inherit. We will sell our house for our retirement where neighbours will be able to free up money for their kids AND live in their big houses.

Sorry, long post but basically - a salary of £100k doesn't not make you wealthy. A salary of £100k with inheritance does.

It's because income is different to wealth.

A million in 1988 doesn't sound right.

I’d say that young couples in £1.5 - £2m houses in Fulham have to have had help.

It’s possible for a young couple to earn £100k each, pay rent in London and save hard to get together a 5% deposit for an ‘affordable’ flat - but it takes time. What’s difficult now, of course, is that a lot of people need a WFH space each, too so everything’s very tight.

I’d say it’s enormously difficult to buy if you’re single and don’t have help.

No one thinks increased inequality is a good thing. It just seems to be a thing in society at the moment ( not just in expensive cities).

Who is celebrating it?

Acquiescing then, letting it go unchallenged, being a political about it, strikes me as that attitude is in many people's interests.

The number of people buying a 1M terrace (and that’s on the low low end!) without family help will be in the absolute minority.
Even with 2 100k jobs a 900k mortgage is most of one salary. If they’re expecting to have kids then having them in childcare with no tax free help, no funding until 3 it all starts to become really difficult financially.

Even the handful if people I know on 500k incomes have had family help for their 2M 3 bed terraces. And by help I’m talking several hundred thousand. It’s very hard to meet these sort of prices on income alone.

A million in 1988 doesn't sound right.

My friends house in Wimbledon village was 1m in the late 90s & it wasn't a terrace.

So, not 1988, then. And that poster was talking about Wandsworth, not Wimbledon.

House prices doubled in the 1990s - I bought in 1993, sold for double the price in 1999.

@Ddakji It's certainly unusual for a terrace house in Wandsworth to sell for 1m in the 80s.... that's where my in-laws live & paid 60k in the 80s

We live in a 1m+ house, but are definitely not wealthy.

just lived in London my whole life and managed to buy a small 1 bed flat when I was in my mid 20’s.

Sorry but have to disagree. You’ve chosen to live in London and live in a £1 million house. You’ve chosen that. You’re paying the price for living in the city with the most opportunities for you and your kids. It’s happens to be the most expensive city in the UK. Most of us can’t dream of living there or even funding our kids to live or study there. You have the advantage that you’ll sell your £1 million plus house ‘for retirement’ and make enough money to move somewhere really nice. Like up north to places which are rapidly becoming unaffordable to average northerners.. And fwiw we can’t downsize, our house is already small 😂

My husband and I have a high combined income.

What are you disagreeing with though? That a large salary doesn’t always go a long way in London? Well - it doesn’t.

And why assume that Londoners want to move out of London in retirement? London is a great place to be retired in.

I always find the inability of MNetters to understand and accept that people can and do buy in London without family help bizarre.

I bought a 2-bed flat in a leafy part of Zone 3 at the age of 31 with zero family help. I’m a high earner, flat-shared until I was 30 and saved hard for 8 years.

I know more people who bought without family help, than those who were gifted six figure sums. I do admit to being in a graduate/professional/finance bubble, but still. There are an awful lot of us in London.

I’ve left the UK now, but my friends in London are now selling their starter flats and buying the £1m+ houses you speak of. Again, no family help.

I was fortunate with the timing. It was not a matter of pure chance that I chose to live, work and buy in London. Or to buy the biggest and best shell of a house that needed complete renovation for max value add.

Friends/family who did not relocate to London from hundreds of miles away have not earned the same or made the same equity in their property.

It’s not luck, I didn’t win it. I took maximum advantage of a rising market in London; good decisions combined with the good fortune of a rising market.

Totally agree with this. The decision to move to a place with more opportunity and better jobs is not luck. I was completely broke as a new graduate in London - living off my overdraft and 0% credit cards for the first couple of years - but the risk paid off and I’ve been able to progress faster in my career than if I had moved back home and taken a local job.