To think London house prices are unjustifiably high

[Alanis126]

I was recently visiting London, where I once lived. It was a big big struggle financially and I wasn't sorry to leave. House prices have been stratospheric for 20 plus years and while there have been some small declines in recent years, I saw a central and fairly nice but ordinary sized flat which cost £1m. There are of course many properties costing way more. There are a couple of things in particular that I don't get. Forgetting the £1m central flats, even a very ordinary property in a quiet zone 5/6 area without much in the way of social amenities was £400k plus. While some people have family money, I think it is fair to say most people start their working lives with no or negative net worth. For many the early/mid twenties will be the lowest point if their income and when they most would like to or benefit from having access to social amenities. When even rent in a grotty house share is £800 plus bills, I don't see how it becomes feasible to live while you are trying to build a career. I know there are other cities but what if you have a job in an industry only existing in London? If houses are £2m or £3m then does it matter anymore what the price is? Could they be worth £5m, £10m,£150m? And while I accept people may still choose a London lifestyle, if someone has London equity and doesn't enjoy their job, is it only fear of being priced out for good that stops them relocating and having a total change of lifestyle?

Hence why the super rich can pass on billions via trusts

You can also use pensions to avoid it, insurance policies etc even equity release can reduce what you owe.

Yes, inheritance tax can be mitigated but taxation on trusts is pretty hefty too. Pension pots have been capped at 1M(?) down from 2M(?) in the past. If you earn over 210k annually, you can only save 10k into a pension tax efficiently.
So there are options but it isn’t as rosy as people imagine.

I think the issue is more that someone with an estate of say 15m can pay less inheritance tax (as a percentage) than an OAP who happens to have an expensive house because they have been there decades. There was a Duke a few yrs ago who inherited billions. Obviously the trusts & the legal advice is ££££ but the super rich aren't paying anything close to 40%.