To ask where all the money comes from?

[Whatsnewwithyou]

Mostly on these house buying/selling programmes with youngish couples in ordinary jobs and budgets of 750k. Is it almost all inheritance?

I have a friend who always seems to be going off skiing and another who has been unemployed/job searching for ages but still shops at John Lewis and goes on holiday. Both are single and have very nice houses. It turns out both have trust funds from grandparents but I knew then both for years before they ever mentioned it. I used to wonder why I couldn't afford all these holidays etc when they could and thought I must be really bad with money.

So are trust funds and inheritances quite common? They must be, right?

@sleepingonamarshmallow thank you, and I really am sorry for flipping it with you. I shouldn’t have and a bit of a step back made me realise I was projecting and massively took it personally when I shouldn’t have.

For what it’s worth I am sorry about your Dad, it must have been really traumatic especially so young.

Lesson learned not to post when highly emotional, and I really am sorry for upsetting you.

I bought when houses were cheap and mine is now worth a lot.

I have money set aside to help both DC with deposits when they want to buy.

I don't think it is fair to say it is debt that enables people to buy lovely houses/any property. Either people are wealthy (inherited/gifted/earned) and are buying cash. Or they earn enough to get a large mortgage. Anyone with a mortgage has debt obviously.

I know quite a few people with interest only mortgages and they aren't bothered. They just say they will downsize when the time comes, and use the equity they have built up to pay mortgage and buy new place outright. To be honest house prices in SE have rocketed in past 20 years so it's easily doable. Or they say they will sell up and rent and take an early retirement with the surplus.

I think it is good that young people can afford to buy property - when I was in my 20s I don't think I knew anyone who couldn't buy, even when I lived in London.

I know only 2 who've had trust funds, and they were substantial - enough to buy nice but not palatial,London properties outright.

Other than that, it's been BOMAD, or parents who don't need the money directly passing on legacies from their own parents.

As for fancy cars on the drive, exotic holidays and expensive new kitchens, etc., having had my eyes opened more than once I'd never take those as sure signs of money in the bank. So often it's cc debt or finance. I know a few with plenty stashed away who drive very ordinary cars and aren't remotely bothered about the latest/most fashionable this or that.

I live in an expensive area of the country with rubbish wages. I’m the only person I know under 40 who hasn’t had significant help from relatives to get on the property ladder, to the point where they used to ask on a regular basis why I wasn’t able to purchase a house and couldn’t understand why I wasn’t getting gifted money from my parents. My own (rich) aunt asked my parents why on Earth they weren’t releasing equity in their house to pay for my deposit.

I find it absolutely shocking, that kind of attitude. I think it’s fabulous when parents can afford to help their children get on the property ladder and choose to do so, but he people I know certainly are not grateful for the help. More than one of them are so dismissive of that help - saying it’s okay they are moving into their (second) property on their parents’ dime and that the house isn’t suitable for them, because they’ll just sell up in a couple of years and their parents will foot that bill too.

I should add, DH and I are on the property ladder now, but we have only had very minor financial help (in the way of a couple of wedding gifts - I should add we eloped because we couldn’t justify the cost of a wedding) and have funded he vast majority of what we own/do ourselves. We are now in a position to afford holidays, save money etc. And we have hardly any debt (minor credit card debt we pay off in full each time). But it took us ages to get here (compared to everyone we know). I think we appreciate it more for it.

I was a SAHM and when we moved here DH retired. It never occurred to me that people might be wondering how we lived. Very simply we saved, invested and lived off the proceeds. It really is nobody's business.

100% agree. Cars on lease are also painted as terrible, but cars are a depreciating asset - it makes zero sense to fork out full price on a car that halfs in value once off the lot. With PCP schemes you pay a £1/2k deposit and £2-600 a month depending on the brand of car. You swap the car at the end of the term (don’t pay the balloon payment) and have a lovely new car again. It’s a very out dated idea that owning a car is the best thing - it’s not.

Esspee I don't think anyone does take an interest in how you live - the post is about youngish couples who are able to afford much more than they could have saved for. Not your situation.

I asked the question because I always felt like I must be daft/bad with money because I couldn't afford what my friends could while earning the same or more. I thought I must be wasting money, missing out on investments, not doing something right. It was only years later I found out they had family money. So I was wondering how common this is amongst young people. I am now middle-aged and saving well for retirement, not interested in how regular folks do that personally (though perhaps others might be??).

There was a whole thread about PCP and it is much better value to buy outright a 1 or 2 year old car if you have the cash, if you don't own the car then you also have to worry about every little scratch and what mileage you do. Also most young people didn't use to expect to own a brand new car every three years and constantly pay £200-600 a month for ever which is what PCP is. Nowadays it seems to be the norm to have a detached house and 2 brand new cars in your 20s/30s when not earning that much so it must be debt or inheritance.

Many people who declare having a business are able to set cars, computers even some household stuff depending on kind of business against the business, many are run from home. eg childminders. There are a lot of people who work and live in middle east for a few years or a good many. and on returning to UK have amassed a load of money. These people then pass the money on to family through property and sometimes trustfunds for family members. Offshore workers also amass large amounts, offshore a/cs etc. There can well be some unknown source of the wealth.

Has anyone else who owned property a long before any of their friends not felt uncomfortable about it?

I don't feel uncomfortable about it. My friends still have their parents. I know which one I would rather have. I also know which one they'd rather have.

@PirateWeasel, I found my mum dead in her house when I went to visit her. She was 67, I was 29 - my sister was only 25. No care home fees for her.

Going back to the original point, we're in the process of selling DM's house and it seems to have been people in their early-mid 30s who bought flats in London with 100% mortgages who were then in a position to spend £750k+ on their 'family' home now. What seems to have happened in a lot of these situations is that 2 single people bought their flats in the early 2000s, they've benefited from the market movement and then got into a relationship so now they have the equity x2 from their individual flats. Puts them in a very cash rich position.

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I bought a house when I lived overseas in a country where property was cheap. Sold it before moving back and had made good money on it so could get on the UK market.

My grandparents all worked mediocre jobs but had the benefit of affordable rent for their entire lives because they had council houses, so they managed to save.

I live in a relatively big house now but although I'm paying off capital I don't ever expect to own this house outright. We're here now due to jobs and good schools but once the kids leave home we'll sell up and move to wherever is cheaper.

Also, I'm probably tighter than most people realise on things that people don't see. I buy a lot anonymously second hand whereas some people wouldn't consider this.

Interest only mortgages aren’t common, they haven’t been widely available for many years.

I know lots of people as you’d describe and they just earn a lot . Made equity on property and worked their way up the property ladder early.

I bought at 24 as a single mum. Totally doable in late 90s and up till around 2006 but my friends said I was boring and even though they had more income, no one else in my friendship group bought early. Even the high achievers I'd known from school didn't buy early. It's not luck, it was common sense to have security rather than lots of clubbing and actually for most of them, they still could have gone clubbing etc as mortgage works out cheaper than renting. They couldn't get their heads around it and thought themselves too young. Its a lack of foresight and common sense for many.

Now its different for young ones and that's sad as they don't get this chance for future stability unless they earn in the top percentages or get an inheritance, payout or windfall.

It's far harder now to just make a good sense decision. Banks and lending limits, affordability have all changed and obviously higher prices.

I'm mortgage free at 39 now as moving to cheaper area after just recently selling that house.

Totally doable in late 90s and up till around 2006 but my friends said I was boring and even though they had more income, no one else in my friendship group bought early.

DH and I were the same. We married and bought our first house in 1997 when I was 21 and he was 22 (seems so young now). All my friends were having gap years after university and travelling the world when I was doing a ‘sensible’ job and paying a mortgage. A decade of high interest rates and house price stagnation/deflation meant that many young people saw absolutely no point in buying; renting seemed a financially more sensible option.

Even back in 2004 many of my peers who graduated with me in 1997 were moaning that they had left it too late to get on the property ladder as prices had ‘gone stupid’.

I must be missing something - what is all this ‘it’s normal for people to have a detached house and two brand new cars when they are young these days’ - none of my friends in their 20s have detached houses with 2 brand new cars in the drive (not in the south west east or midlands anyway). And plenty of them are in decent jobs. They mostly live within their means. Who are all these people in their 20s buying detached houses?!?

We live in a 2 bed flat in a nice area of South London, do many parents around our age(late-20s, early 30s) are in full houses, completely renovated despite having similar jobs. Having known a few couples for a while Im sure it's family money - one couple was recently taken away by their parents for a week in Barbados where the hotel was £2k a night. Another has a father who owns an extra apartment in blackfriars that she uses from naps, feeding etc while in Central London with her children. My husband has a good job (not by mumsnet standards, but is in the top 10%) and we are still around £200k off being able to afford somewhere with a third bedroom.

Generally I don't mind that we are worse off, but almost everyone I know who is better off has said something about our flat that felt rude or thoughtless - said our place felt like a cave, suggested extentions that would be atleast £100k...

One other group I know is people with parents who own small businesses such as locksmiths, window companies, and have full homes for them. I always wondered if those businesses were really that profitable or if it was something else...

SB1189. At least 3 people in their late 20's who work with me have detached house , new cars, also having babies or have children, average wage £30k a year, though they could have a rich spouse but I doubt it, guessing spouses earn about the same guessing from conversations so circa £60k households, Detached house around our way is probably £250-300K so 4 times joint income + deposit sounds about right. Big mortgages for income, well I think so anyway.

Big mortgages for income, well I think so anyway

Lots of people assuming this

Doesn’t exist anymore.

Unlikely they’d get 4x salary joint income mortgage. Or at least not without a very significant deposit

Just done a quick check for £60k joint borrowing and got £285k

Interest only mortgage, credit, loans.

I think other people spend a lot less money on food than I do! I have noticed that many people I know go on holidays a lot, but they eat the cheapest food, really nasty food with no nutritional value. But that's their choice. I prefer to have a good every day life style rather than a holiday.

This is me I hardly spend anything on food, mostly because I'm just not that bothered about it. I could eat egg on toast every day for lunch and basics pasta and a jar of sauce every night for tea and be absolutely fine. Not big on expensive coffees, eating out, I don't drink and I don't smoke. I have a "capsual wardrobe" which consists of a couple of black skinnies, couple of jeans, 2 going out tops and 7 plain cotton tees. I always buy a couple of nice jackets a year and that's it. Days out with two kids are free, I drive but don't use the car at weekends we walk everywhere.

BUT... i go on at least three holidays abroad every year, including one "big" holiday for example this year is Florida with all the bells and whistles. I own my house at 26 and I'll be mortgage free in about 7 years. Bought first one at 19 which was the cheapest flat in the whole city (horrible area) put the 5% deposit on a credit card, did it up myself by learning to paper, lay flooring, tile etc and sold it a year later for £15k profit. I kept doing this throughout my early 20s slowly upgrading each time.

I earn 34k which is a for single mum with two kids, my essential bills- mortgage CT and broadband are about 500pcm and I live off £50 a week inc petrol, clothes and food. Their dads maintenance covers childcare. So I save A LOT of money and have disposable income, most things I pay for yearly.

Similarly a family member earns more and they're in debt and have not a penny left at the end of the month. No holidays, struggle before payday. But they can go to Asda and blow £150 on a weeks shopping for a family of 4. They have fashionable clothes etc.

I certainly couldn't have afforded to buy a flat without inheritance money. Friends who also own have all had some inheritance or parental help. Those without it haven't been able to buy.