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?

Probably wise investment. If they invested £500 per month into a S&S ISA from first job at 18 to 38, it would be worth around £250-350K. It's easy to see how 2 people with good incomes could amass quite a sum, especially if their parents are letting them live rent free/minimal rent to save.

It’s good if you can afford it without major sacrifices. Crazy IMO if you’re massively stretched on a huge mortgage.

My youngest 2 DC have houses in SE worth c£900k. They started out with flats in their mid 20s- we helped them with deposits. They both have moved up the ladder using equity in the flats plus small inheritances plus both having well paid jobs and partners with well paid jobs. They are both able to overpay on their mortgages.

We're 39, house approx 400k in the south east. The only way we did it was moving home when we were about 25 and saved like mad for about 2 years for a deposit - we we're renting at the time, but made thre call to just do it. Bought a tiny house, then moved 8 years later. Thank God for that decision.

Generational wealth in 90% of cases. Next question.

We had a £25k deposit on our first place in 2019. There’s two of us and we both used LISAs so it took less than 3 years to save up, ie from graduating uni to being 24. Saving £4k a year (to max out LISA) on a professional salary isn’t that much of a stretch when you don’t have DC or other major outgoings.

I'm not being arsey this is a genuine question. - is that an actual statistic?

My daughter and partner in their 20s just paid north of 600k for their first house, they are a lawyer and investment banker

if you’re sure their jobs are not high paying, and some can be surprising. Then yes it would be inheritance. But I’d not assume salary unless it’s someone like civil service, the forces, teaching etc

So if people are mortgaged up to their eyeballs as @DollieDay said can you still realistically save / put money aside every month? Is there some leeway too such as if one person lost their high earning job? With the job situation rn it’s not easy to find another equally high earning job in a short space of time…

me and husband bought a £600k house 2 years ago at 27. No help. We bought a £300k house at 24 via scrimping and saving after uni for the £30k deposit. We sold the house for a big enough profit to put down £60k on the £600k house. We had a combined income of £130k at the time so our mortgage wasn’t even maxed out (could have borrowed nearly £700k).

Absolutely. I live and work in London, and my friends and family are all here. And those few** friends of mine who have lived a non-commutable distance from London have found their local job market pretty terrible, with many relevant opportunities London-based.

**so this is a small sample size!

I worked from 14.

worked through uni, got the max loans and put together a deposit.

graduated at 21, bought a flat in a northern city. My friends told me I was mad “tying myself to a mortgage” that young, and they were going to wait as they didn’t want a flat, they wanted a house with a garden. Guess what, 10 years later and whinging about still not being able to afford that house.

got a job in the se, bought a run down 2 up 2 down small terrace with the equity, did it up over the years.

sold and had enough equity for a 3 bed semi plus very big mortgage. Was interest only for many years while I got myself stabilised, then started paying off chunks.

now late 40’s and nearly mortgage free.

The income multiples are getting scary again. I remember what happened last time the banks were lending so much and I also remember that we all agreed to learn the lessons from that. History really does repeat itself!

My husband was a moderate earner but lived at home through most of his 20s so saved plenty, bought a modest 2 bed flat in his late 20s. I was renting but with a high income and so saved plenty. By the time we bought our house for £1m after we got married, he’d had his flat for around 10 years and it had c£250k equity and I had saved around £200k after working about the same amount of time. No inheritance but big savers for different reasons and benefitted from DH being on the property ladder early.

I do one day a week in an agency, up until a few years ago when it was a buying frenzy around here, it was big gifts from parents as they always came to the viewings. Also a lot of the young couples moved from rural places to here and had big family money behind them. Very few sales were to people that were already in london.

Yep, we found it scary how easily they would throw money at us. But also we were early in our careers and even since then we both earn considerably more now. Not sure we’d have done it if we didn’t think we could increase our earning potential so much

It’s scary for the wider market - It only ever ends one way when too many people are stretched too far.

I’m 42

i don’t know anyone that lives in a high value house just from being a high earner

people either bought young and made a lot of profit, inheritance or accident payouts

il always get to the bottom of it 😂😂

This is the problem. The job opportunities in London for certain industries are just second to none.

Early 40s & we bought 10 years ago for £300k with a 10% deposit - I was gifted 10k by grandparents and saved £20k from a side hustle for the deposit. I couldn’t have done it without grandparents help - they also lent me the stamp duty (around £7k) which I paid back over the next year or so. The house is now worth £600k - we have spent £70k on it over the years which was done via remortgaging but we have around £300k equity.

perhaps they bought smaller places previously, many people do buy without help, my dd has- ok not in London but she would be able to buy a flat for why she’s buying a house for in London, mid 20’s. She has saved the deposit

Well, reading this thread has been sobering.

I wish I could turn back the clock and undo all of my poor life choices.

Maybe not now with prices so high, but 10-12 years ago it was possible. Those of us in our late 30s had lower house prices and lower interest rates, it was perfectly possible to buy in our twenties without family help, even in the south. Our first house deposit was £27k which was 10%, small 2 bed house. £13.5k each easily saved up over a few years after graduating.

No, its more like 40% have some sort of financial help. About 25% are given some or all of their deposit.

it’s really hard to move up the ladder now, stamp duty is prohibitive & it’s much harder to build equity plus higher rates.