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?

Yes
OP is inserting phrases that no one has said. They've just said that they've done it without help. And there have been lots of us.

It's perfectly the norm in certain sectors of the population. It probably isn't the norm for someone on the average salary of £40k, but perfectly the norm for professionals much younger than late thirties to earn 80/90k outside london.

If you have 2 of that salary then it's perfectly doable to save and pay a large mortgage. All my son's close friends of that age own houses over 600k, not at all unusual in their group( not London).

I also think that when you consider the amount of money some parents pay for private education every year, it’s not at all inconceivable that in a couple of years after they’ve finished that the parents give the equivalent to them for their first home deposit. They’re used to spending it on children anyway, and I know if I could afford private school then it is what I would have considered doing my son finished. Unfortunately I can’t so he gets 20-30k that I’ve saved from when he was little to pay for his deposit (NE) so not as much needed as in the south.

Theyre also likely to have mortgages for 30 years at pretty high monthly payments.

I think TBH that the days of doing it without help are coming to an end. All of the market data suggests this. People who did this over the last 10/15/20 years benefited from historically low interest rates and rocketing house prices. Higher interest rates and stagnant growth don’t lend themselves to building equity.

No, there are a lot of people saying 'they' must have inherited or been gifted about others. Then, there are a lot of us who have actually done it without help explaining how we did it without help.

It is starting younger than makes the difference. I bought my first home at 30, DH his at 25.

I’m late 40s with a house worth about £800k. But we bought it when I was mid 30s and it cost £400k. No family help or inheritance- we bought a flat in a terrible area late 90s and then upgraded to a house in a slightly better area (did that up) and then bought this one which we won’t be selling (unless to downsize). Mortgage almost paid off now which feels reassuring as we can then start properly saving to give DS a deposit.

This. If you're a professional then you won't have reached your maximum salary by your thirties, you've got years ahead of an increasing salary, you should get decent pay rises so expect your income to rise significantly in the years ahead. Overpaying the mortgage is perfectly normal in those circumstances.

Please don't beat yourself up. This is a good example of not trying to compare yourself to others
Many parents use inheritance to fund private school - that pot has dried up by the time they leave.

That deposit you've saved for your son is amazing :-)

@bluntscissorsI myself don't have a massive mortgage but I have worked as a Mortgage Underwriter for the last 20 odd years
I can confirm that majority of first time buyers take out the maximum term available and can also confirm that we will lend to age 75 without batting an eyelid. I work for a mainstream bank with standard competitive interest rates.
It is also not uncommon to see people in their early 20's on very high salaries.
It's eye opening.
Personally I wouldn't be comfortable with a mortgage of over 3 grand a month no matter what my earnings but people are, lots of people.
I guess if you are at the beginning of a very well paid career it is less daunting

Of course they can. You don't have to "do well in finance" to have a £600k house.

If you're buying as a couple and each earn say £50-60k you can get a mortgage for £540k. £60k deposit - equity from a previous house and/or each of you saving £200 a month for 10 years. Not a stretch at all to do that without "family money" if you're a couple. Obviously for individuals buying alone it's much trickier...!

No-one is saying anyone can do it.

People are saying that if they don't have family wealth then they probably have a large mortgage which is perfectly achievable on the combined salaries of two professionals. You seem to be very averse to the idea of a large mortgage, but that's your choice - people are just pointing out that's what other people have done...

We were gifted £350k from our parents to buy our £750k house in the south east. Most people in our situation were gifted £80k-£100k

Oh sorry I didn’t mean to make it sound like I was thinking I had done less than I should.

I’ll be giving him more than I got from my parents (I’m also paying for his uni so no student loans) and he will (hopefully) pay this forward if he has children. We have started a great cycle that if it continues means that whilst it’s not a wealthy lifestyle, by has afforded us 20 trips to Disney, and the same number to European destinations.

He will have to work hard, but he has been given plenty of opportunities. Hopefully he can convert these and turn them into even more for his kids. I think that’s all parents want isn’t it, for their kids to have the same or better life than them, and for that to continue.

We bought a flat for £200k, resonated it over 5years during out late 20’s and then sold it for £400k, which we used to move to a house which then cost £500k, not worth over 600

Yes, but those averages aren’t for the south east.

And I think you are wrong, I would say saving for your future from a young age is the norm, especially since the LISA was introduced almost a decade ago.

Re mortgages at £3k+, I guess it depends what rent you’re paying. Before we bought in London we were paying £4k+ in rent so our mortgage when we bought didn’t feel too much as it was less than we were paying in rent.

I think you’re maybe underestimating salaries in London. By mid to late 30’s lots of people are earning £100k+

The median salary in London is about 47K so no, 'lots of people' are not earning what you suggest.

Quite. Lots of people in certain industries might be but the majority of people in London aren’t. I live here and don’t know anyone on £100k because I’m in an arts/creative bubble. Some of these people have had help from parents/in-laws to buy. The ones that haven’t either did it alone and bought small flats or are still renting.

I know one person earning 100k, the rest of us are on 40k tops.

Hundreds of thousands of people in London earn 6 figures. £100k doesn't put you in the top 10% of london earners. That is lots of people.

My kids are late 20’s and most of their friends have been given huge deposits by both sets of parents.

So in my teens I had friends who pleaded poverty, wouldn’t buy a round for example or would refuse to go out as they had no money. but upon further discussion I found out these friends religiously saved like 40 percent of income. They never considered that money spendable money and assumed everyone else did exactly the same.

Well I know lots of them, but then that’s not remarkable because most people I work with are earning that.

But that’s still lots of people.