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?

My first property was a 1 bed shared-ownership flat in an East London borough in an area of 'regeneration'.

The areas mentioned by op are highly desirable! Fulham and Clapham very much so.

Most people, even on £1/4 million between them won’t be going there without a lot of help. Many grandparents or parents give 7 years before they die. We have.

Also there are other decent areas not that far away where it’s cheaper. Eg Camberwell, Peckham Rye and similar with good residential roads and a lower price tag.

Yes, it's quite clear that we're talking about a specific period of time seeing unusually high gains. That specific part was nothing more than the luck of the draw. Unearned good fortune, the sort that hasn't existed in other time periods.

I saw an article this week suggesting that 'many' people are gifting their DCs deposits of £100k each.
I've been saving hard for the last few years to try and help mine as much as possible but there's no way I'll reach that.
In the real world what kind of sums are people gifting for deposits ?

As much as they can afford.

There's no point us comparing ourselves to others - there will always be people richer than us so it's a personal decision how much we can afford to help our children financially without making ourselves vulnerable.

Some people don't give their children anything and others give hundreds of thousands.

Some of the school mums I met had 6 figs to get on the ladder, money for renovations and then more 6 figs to move up the ladder. I sold my flat to a parent buying it for their dc, it was the 4th flat on my small street to go like that. The demographic changed considerably.

Yes, I was thinking the exact same! Cleaners, security staff in Tesco express who won’t be on 6 figure salaries.

Most will be in social housing I imagine or be part of an extended family living in family homes bought many years ago before housing got so expensive.

In 2015 I had a gifted deposit of 37k and with my savings was able to buy a 45% share in a 222k property on a salary of 25k. You can do the maths. I then got promoted 3 years later and bought a 70% share when the property was worth 250k.

Yes you are probably right. Or renting a room as part of a house share somewhere further out.

Not all houses cost 2m in London.
There are also cheaper areas

Agree about cheaper areas particularly in zones 4 plus.

I live about an hour from London. I know a fair few 20 year olds that moved there.
The ones who have been in solid relationships for a while have bought with parental help - basically two good salaries plus help.
The singles all rent.

I always find this kind of thread a bit baffling. There are people who have earned or inherited (or occasionally won!) lots of money. They can buy expensive houses that other people can't afford.

We’re buying them. Civil Servant and city bod. It is well within our budget to spend £2m+. We are looking to move, and any house in a good catchment area is well above £1m, the good sized ones are nearing £2m. It’s ridiculous to some but I don’t see it as ridiculous if you look at the areas concerned.

This is an unpopular opinion on MN but parents should downsize and gift money to their children to help them get on the ladder otherwise they will always have to rent (or marry someone who owns).

Yes, I do know it’s come up in the world - I have a property there - but although I’m very fond of Tooting I still wouldn’t put it into any ‘posh’ category. (And IMO it’s all the better for that.)
Gentrified to some extent, yes, certainly.

I’m 59, and several of my contemporaries have done just this. But they worry about handing on assets which might one day be needed to help pay for care.

@GETTINGLIKEMYMOTHER agree with you re Tooting. Streatham has always had posh bits, and used to be very post back
in the day. Home to the first Waitrose, losing John Lewis was bad times!

I would go further than that, you could get a 3 bed terraced house in an ok road less than 10 mins walk from 2 tube stations and about 10 minutes from 3 different overground stations around here, north london , 20 mins into Kings Cross, for about 750k. The area is fine, parks etc close by.
That is of course still expensive, but it’s not the 2million OP talked about.

On our London street, people are either:

1.Home counties (usually Surrey) ex private school kids. Dad retired from finance. Hefty house deposit. Kids not very impressive professionally. In HR or the arts or yoga or something

or

2.Insanely driven and well paid (100K upwards) people who have moved into London from other parts of the UK/world to do power jobs in banking etc. No bank of mum and dad. Much more go getting to the point you know they don’t fall into category 1 before it comes up in the pub!

DH and I bought a small terrace home in zone 3, a few years ago. It was just over £400k. Both of us grew up in working class households.

Bought a tiny studio flat years ago, sold it when we wanted to start a family, we made no money on it. Word of advice: do not buy a studio flat!

we then went into private rental for YEARS (for school catchment) also because we just didn't have enough deposit saved to buy.

My parents died and left us siblings with an ex council flat. We split up the proceeds and it was just enough for do and I to buy a 2 up 2 down in a down at the heels area of London.

I dream of a home in Fulham or Chiswick! Will never happen though.

@GETTINGLIKEMYMOTHER my son lived in a house share in Tooting when he first moved to London at 19 - used to go and visit - I really liked it, especially the markets- was a great mix of gentrified and down to earth stuff too - kind of place where yes you could get an artisan almond croissant but also a good hardware shop etc!! Much underrated I think

It’s pretty depressing (for us at least!) at the moment. We saved and bought and sold a flat but not in that golden era/perfect timing that so many seemed to have achieved. Typically, those high incomes and jobs happen when you’re in your 30’s and 40’s which then coincides with starting a family and eye watering childcare costs!

We are in the boat now that we are both high earners but with little equity. Couple that with nursery fees, interest rates and house prices as they are now, we can’t afford to buy a family home (or at least, a family home in a safe enough area).

I just don’t see how this trajectory can continue

We are going to have to leave unfortunately

What’s your budget? Why not buy a 3-bed flat, or a maisonette, or a small 2-bed house? There are ways to stay living in London if you make compromises on the property. I have never understood the obsession with buying a ‘family home’ and that taking priority over everything including location. I would much rather live in the city / area I actually want to live in, in a flat/maisonette/small house, than live in a bigger family home elsewhere.

When I lived in London, there were several young families in my block of flats. It’s really not unusual to raise children in a flat, especially in London where there is ample green space (also incredibly common / the norm in parts of Europe).