How do people in their late 30s afford £600k+ homes in the South East?

[bluntscissors]

So many people I know with jobs worse than mine have houses worth £600k+

We are in the South East so £600k+ isn’t actually a super fancy house. Of course no one talks about their finances and it would be crude to ask.

I am almost certain if you have a house worth this much then you must have had at least £300k in cash for a deposit otherwise the mortgage would be too much.

My group of friends is only late 30s/early 40s so haven’t had decades to build up equity.

Is my hunch right that they all must have been gifted 100s of grand from their parents? This seems absolutely wild but I can’t imagine another route.

If you have a house that is 600k+ tell me honestly how you managed it?

They may have bought the house in their 20s when it wasn't "worth" £600k.
(A house isn't worth anything until you try to sell it. It's just where you live.)

My house is worth 400k, I am single and bought my first house when I was 23 using a key worker scheme. I have had 3 houses now and each time I have made quite a bit of money on each one. My last house I made 130k. Im 44 now.

Its not that difficult.

We got our first house on 17k salary each 8/9 years ago for 195k with a 20k deposit we saved ourselves.

Did it up with a new bathroom for 6k, and paint jobs/ styling and sold it for 265k 4 years later.

In the interim we had overpaid about 5k extra during first remortgage to get to next LTV band.

By that time we had better jobs but kept our 17k minimum wage lifestyle. Had saved 30k extra for house move.

Bought a falling down abandoned house with holes in the roof and cracks in the wall for 390k in 2021 when stamp duty holiday.

Still doing that up; but it’s now worth somewhere between 550 and 650k (hard to tell as a bit of an anomaly in the area). We have 200k left on mortgage.

We are planning our next and final move in 5 years time - we want a 5/6 bed detached farmhouse with 3-5 acres and outhouses for around 700k.

We have a house in this bracket totally self funded.

We are unusual though.
The house was possible as I bought a derelict flat in z3 for 250k in 2012 and sold in 2019 making a decent profit (~150k) as i did a lot of the work myslef and back then you could refub a 2 bed with bathroom / mid range kitchen for 15k if you were careful. I also put up with lodgers for 6 years (took 1 yr to renovate) which built equity.

Not everyone had a parental leg up... a lot do though...

How did you manage to secure that first mortgage? Was it with a mainstream lender?

just ask them? My friends and I all talk openly about our finances. For people I know in this sort of position, it is due to huge amounts of help from parents and grandparents, and I know that for a fact because they’ve told me. Two of them were bought flats outright by a rich granddad. Another it was help from in laws. Another inheritance from grandparents and a childless uncle.

My son is early 30s and he could afford 600k on his own with mortgage and savings , no inheritance.

DH and I have a very expensive house. We both bought flats in newly gentrified areas when we were in our mid 20s which sold quite well. We are also both senior lawyers in the city. No family help from either families as no question of inheritance yet.

Bought a doer upper with savings and a small inheritance for £400,000 that we did ourselves in our early 30s. Added 30% in equity by the time we sold. Had a 30% deposit for our next house top of budget at £800,000. Also a doer upper. Hate it, want to sell up and leave London!

Our house was £550k. Put down £85k each so £170kwhich we both saved ourselves. No family money. Bought at 28 and 30. Been saving since my first job at 18.
Now have £320k left on mortgage and just paid for £185k of renovations from savings so house is now worth approx £975k.

We both work in finance and are qualified accountants.

Our house is SE worth about 500k. We could push to about a million but are choosing not to. We are a dual earner, both ft workers, family. We aren't hugely spendy, so we don't drink, most of our clothes come from Primark and we wear them out rather than replacing in everything every year. We get a lot second hand.

Also house prices have gone up a lot on the last ten years. So our neighbours of similar age bought their house 2 years before us and it was 150k cheaper than ours. So their mortgage is all paid off now. Those 2 years cost us!

Ok so most people seem to have had gifts or inheritance which I guess is what I thought.

The people I know didn’t get on the ladder in their 20s so it’s definitely not a build up of equity.

I’m finding this very depressing. We’ve saved ~10k a year for the last 3 years but 300k only gets you a pokey flat in a bad area here. I’m not willing to take on a mortgage of more than ~£270k (which is around £1500 a month repayment).

I know we are best off building equity in the pokey flat than renting but it just feels really depressing.

Being mortgage free is bliss. I agree with you. No point in stretching and having all the stress of a massive mortgage.

It's a constant discussion, about whether we will regret not stretching while we can to increase what we can pass down to DC. But for now it makes sense with all the uncertainty (well, trump) not to go crazy.

Unfortunately I’m not sure people are able to build equity in the way they were in previous years. There was a time when property prices just kept rising, but the market is much tougher now and flats in particular seem to be going backwards.

Tbh if you arent on the ladder I wouldnt be rushing to get on right now and prices are only going one way.

We’re mortgage free & could afford a 600k+ house mortgage-free. We’ve got about 300k in savings and 500k in the house.

We both worked abroad for most of our 20s & early 30s as proper expats with everything paid for, so saved all of our salaries for 10 years. Then our jobs now have higher salaries than you’d expect - I’m in HR and have seen my equivalent job in a different industry advertised at 38k, whereas I’m on 85k.

We save about 50-70k a year whilst also living really well with what we do enjoy (4-5 holidays/city breaks a year).

We don’t have much practical family help or help with money. I think we got 6k-8k for help towards our wedding.

We are incredibly lucky that our risks paid off, that we are both able to get ahead in a corporate world (has come at a cost as we are both late diagnosed ND) and that we also found each other with a similar outlook, risk profile and earning potential.

Oh really. How certain are you of this? I live in popular city in the south noted for high prices and not enough housing stock so I’m not so sure about that.

Inheritance / family money, or some people got on the property ladder just before prices went totally bonkers and then sold and upgraded.

Posted on another thread but my nephews all have £600k plus properties late 30’s/early 40’s. They had an inheritance from grandparents and at the same time their boomer parents downsized from London to a different area. All received about £300k and bought flats in London but have now upgraded to houses in outer London. One has paid their mortgage off as they have a high paying career. Kids who inherit from the boomers will be well off as quite modest houses in London bought in the 60’s by their parents are usually a million pound plus.

Have they had houses before? My dc and some of their friends are buying houses 500k + in their late 20’s/early 30’s but they’ve had a house before that they’ve done up and made a profit on (as have their partners) so it’s enabled them to move up the ladder.
If these people are in their late 30’s they could’ve bought and sold a couple of houses by then?

Unfortunately the gap between the haves and have nots is ever widening. My advice, if you’re still young, would be to see if you can make a life outside of the South East where property prices are lower (although I’ve noticed many areas of the country are catching up with outer London prices, albeit for slightly bigger properties). This is what I’m encouraging my dc to do and when we retire, we’ll join them wherever they are if possible. My dc are younger than their cousins but won’t have the sort of inheritance they benefited from.

We had help to get on the ladder, cash gift & lived at home to save. All my friends were similar although some had huge help eg 500k plus.

Agree, I started a thread about how prices haven’t kept up with inflation the last decade plus. I was quite shocked tbh.

Yes mainstream lender.