If you paid £1m+ for your house...

[propertydetective]

How old were you and how?
If just from savings/earnings, what sort of level were you at financially?

Sorry to be nosey. DH and I live in a three bed semi, we've been here a year and it's worth £550k. We don't have children yet but have dogs and realise that it's pretty annoying not having the space we desire and would prefer detached to not piss off our neighbours.

In our area a 4 bed detached can range from £850k-£1m+, we live by the coast in a commuter town so the closer you get to the sea, of course the prices rise. I found a house we would love to buy in the future just to figure out prices, that was listed for £950k. The houses are never on for more than a week before SSTC so they always seem to go for the asking price or thereabouts.

And my AIBU, is it just stupid to potentially have such a big mortgage? I'm 26 now and we have achieved everything with 0 financial help and we are really proud. But likewise, we will seriously need promotions/luck to get the money together.

We can currently get a mortgage for around £500k meaning we either need major promotions or to win some money. I like to dream though...

@Mreggsworth

I dont think theres the option for the generation getting onto the property ladder now to make lots of money from investments. My parents in law have never earned more than 19k each, but they bought three dirt cheap flats about 25 years ago with very small mortgages and with help of a small inheritance. They have all sold now for about 150k each. I know a few older people too who have made money from property, either letting or having multiple and selling.

Someone on a 19 k salary now struggles to get a mortgage for themselves, never mind multiple mortgages, so very different times.

Our son managed to get himself on the ladder and has now traded up. He’s 26. He chose to join the armed forces at eighteen. He saved a lot by not going to university from school and had ‘Help to buy’. Those who like him, took the Kings Shilling at eighteen have all bought and are now investing or moving up.

It remains about choices, doesn’t it?

True. There are some choices that allow you to "move up" from a relatively young age. Never to the significance that happened 20/30 years ago though.

However If everyone took the choice to not to go University, and prioritise saving to get on the ladder quickly from 18 we would not have any nurses, doctors, lawyers, teachers and midwives etc. So while it's a choice, its not one we should all necessarily be encouraging.

@Mreggsworth

True. There are some choices that allow you to "move up" from a relatively young age. Never to the significance that happened 20/30 years ago though.

However If everyone took the choice to not to go University, and prioritise saving to get on the ladder quickly from 18 we would not have any nurses, doctors, lawyers, teachers and midwives etc. So while it's a choice, its not one we should all necessarily be encouraging.

Indeed - although in fairness he did get a degree and is doing a masters through armed forces now. His fiancée is doing a masters in trauma nursing through armed forces too.
I wouldn't discourage anyone from going to university; indeed we tried quite hard to persuade him down the more traditional route, but, in truth, he would have spent his time drinking and charming girls. He worked out he might as well get paid to do that rather than accumulating debt.

Interesting to see the responses, especially considering opportunities. I agree that this has a big impact on how likely it is to get the property. I'll give some background on me/us so that it's fair. Going to NC soon so it shouldn't really matter.

DP and I met when I was 20, he was 26 (6 years ago). I was at University, I am quite academic so was awarded several scholarships. One of which was with a graduate scheme with a big finance firm in London. Throughout Uni I worked, I left with no debt apart from my beautiful student loan. I received a full loan as I am from poverty, free school meals etc.

My starting salary was £27k, DP was a teacher and his salary was £33k. Our take home was similar as his pension is big. We lived apart with our parents PAYING MARKET RATE RENT for a room. We saved every penny, didn't go out, became weirdly frugal and put a deposit down on a small flat which cost £170k in an area we didn't want to live that made my life so incredibly hard and shitty that I just wanted out. However, area was good.
We sold it two years on for £190k.

We continued saving in those two years to get together enough to buy a house in a desirable location. I qualified in my job, DP became a specialist type of education teacher (can't be specific as it's outing) and started a business. On moving our salaries were £50k, £40k and the business made profit of £24k a year (post-tax).

Our house again has gained value, £50k in one year, agreed by our mortgage company for valuation to remortgage. I earn about £65k a year, I have £55k in savings (from bonuses, taking on extra work and starting another little business), DH makes £55k from his main job and £25k post tax from the business.

My earning potential is well into six figures before 30. I am on track for that. We are considering starting a different business and have invested a lot of money, it's currently up around 10% in various holdings.

I think the main things is that I am happy to work 18 hour days in different jobs if it means we can make more for our future. DH works from 6am-8pm most days, but we both have weekends off every week. We might change that soon. We think we may as well as we don't have children (yet) so it's the time to work hard and enjoy life.

Sitting in front of the telly feels like a waste when we can DO things. So we both volunteer a lot, mainly foodbanks and I also work with an animal charity a couple of times a week. We take quite nice big holidays (normally!) which is our pure rest and recoup time, we don't ever use phones or take them out with us, they sit in a hotel safe and are checked for emergencies only.

I hope it pays off one day!

The end.

Having read your update, I think its clear what your motivations are, and its brilliant you are setting up extra income, and charity volunteering. In that case, I would keep doing what you are doing and aiming high on the housing front - you can always change your mind later on on the £1 m house but if you have the savings I don't think you'll regret it.

I'd have loved to be so motivated at your age. Instead I spent loads on holidays, going out, meals, clothes etc, and only really started looking at money and saving at 30-ish. However having really focused on building our incomes and progressing our careers, in our mid thirties we are in a much better position. We've decided to spend less on housing (for now), and focus on saving and investing to have options to cut down hours and finish work earlier later on (if we want to). Have you read Mr Money Moustache?

Now is the time for hard work OP and pushing yourselves forward. When children come along it is so much harder. Good luck to you both, it sounds like you are well on your way and it's good to have aspirations and goals.

OP you’re extremely motivated for your age. Well done for saving so hard.

I’m slightly younger than you however I do not earn as much as you. My husband is on a higher salary than me (I earn £37k however my earning potential in my career is £100k which I hope to achieve by the time I’m 30) and thanks to family money, working hard and savings - we live in a £1.1m home. It isn’t in the South East but it’s in a very leafy part of the country with frequent trains less than an hour away to London. Houses here can range anywhere from £500k to £3.5m.

Obviously I live in this sort of house because my husband and I come from a well-off background however we saved for a long time too so we could buy this house outright.

Good luck for future OP!

In 40s, both having worked in tech industry for many years, some good fortune with respect to stock options. Mixture of hard work, and the right place at the right time.

I've also been in the wrong place at the wrong time, so that happens too :(

@PantherPantherus

I am currently working on my mausoleum. Rather than get a mortgage I am saving up to do it out of surplus income and expect to have it ready at the end of my life, so around age 75 I suppose. At least that is what the ONS says. Not sure what it will be worth, but I bought a 15 hectare site and have some lapis lazuli and some marble ordered from Italy which is not cheap, but I want it to last at least 4,000 years.

I hear you. I was thinking of a burial chamber like The Valley of the Kings, just this side of the allotments, but try getting that past our council!

£55k in savings at the age of 26, plus a half million pound house, with no help and having to previously take out a student loan? Those have been five very lucrative years.

Mind you, I’m in Scotland, and don’t know anyone who owns a house over £500k. At £1m you would be looking at something very special

Scotland is rather variable. I'm in a fairly normal Victorian semi in a normal town in Scotland, smallish garden and it's just been valued at £600k.

We're looking to move to somewhere detached with a bigger garden and have a budget of about £1m but it's slim pickings.

We've also got a small one bed flat in Edinburgh worth about £150k which is rented out.

OP I think while you have good incomes coming in you need to have a financial plan and maximise any spare income you have.

Mid thirties. We saved money living rent free as expects for a couple of years, then got redundancies for deposit on first flat.

First flat grew ~70% in 5 years (bought in the financial crisis) so gave us a chunk of equity when we moved. We both earn 6 figures with decent bonuses too.

"I dont think theres the option for the generation getting onto the property ladder now to make lots of money from investments. My parents in law have never earned more than 19k each, but they bought three dirt cheap flats about 25 years ago with very small mortgages and with help of a small inheritance. They have all sold now for about 150k each. I know a few older people too who have made money from property, either letting or having multiple and selling.

Someone on a 19 k salary now struggles to get a mortgage for themselves, never mind multiple mortgages, so very different times."
Its impossible for so many who missed the property gold rush and don't already have a lump sum in equity or inheritance to invest.

Thats the bottom line. Under 30 and your home ownership opportunities heavily rely on who your parents are, how well off they are and what kid of health they and your grandparents are in

Completely agree. It's so much harder now as you need big deposits for property, taxes have changed, savings are rubbish, plus much harder to build equity.

We will never get there, despite living in a house that is worth approx 1 million (madness for a 3 bed 1 bath mid terrace). Our next move will be down sizing and hopefully being able to help our children with some money towards a deposit.

Our home is worth about 900k so next move will likely be a 1m property. Not anything we did as we were helped with deposit. If we had managed to do the same in the late 90s we would be in a 2m plus house alas we were still kids!

You’ve done amazing OP, it’s nice to read good outcomes from hard work , you’ve done really well for your age!
I only bought my house in my mid 30s, always felt too poor before. No parental help, inheritance etc, only did it with earnings…also generally risk averse and didn’t want too large a mortgage , so waited till we had 50 pct deposit in savings to do it . On hindsight, given the way property went up, should probably have started way earlier

Mid 30’s. Bought our first home for £1.2m. In London so by no means palatial, just regular 4 bed Victorian terrace.

No help from parents. Saved salary and bonuses for deposit and have huge mortgage.

Well paid careers though in finance and law. Our combined salaries more than tripled between our late 20’s and mid 30’s

We were both 37 and bought a house for just over £1m. We had about £220k as a deposit, built up through savings and equity from our previous house (we didn't make a huge amount on it, just enough to cover stamp duty). No family help. We each work corporate jobs in the City and have a really big mortgage. It's our forever home though so we're plugging away at it.

With all due respect, this whole thread is one big argument for salary and bonus caps, higher business tax rates, progressive income taxation, and further financial disincentives for second home ownership.

I bought my first house at 18 - 3 jobs and lots and lots of saving, second at 23 - from this house each time I upgraded house if I upped the borrowed sum, I upgraded my endowment policy to the same value but kept the 25 year term. By the time I came to this house, we were able to pay 50% deposit. Before kids.
Thus when I came into lump sums (bonus) I paid chunks of the mortgage and eventually when the endowment paid out it paid off the remaining sum and released enough cash to buy solar (at the original FIT rate, meaning we make money on electricity generated above the house's energy costs),

You keep your phone in a hotel safe? What the fuck? I love the idea of occasionally checking a phone for emergencies - do you understand what an emergency is? 😂

Our daughter is 28. They’ve just signed exchanged on a sweet little house at £735,000. This won’t be their forever home, but with a bit of work doing, it will probably reach a value of around £1M.

I think house prices are ridiculous. It’s not grand, it’s not detached, it’s in need of a new kitchen and bathrooms and the garden is not huge.

They’ve done it by working very hard. They studied from 18 without a break. Now they both work full time as GPs and then do locum in a Hospice and hospital at weekends. They have deferred children until they have a house big enough and can comfortably afford them. They’ve deferred expensive holidays, clothes and luxuries. Short term pain, long term gain.

@davidrosejumper

With all due respect, this whole thread is one big argument for salary and bonus caps, higher business tax rates, progressive income taxation, and further financial disincentives for second home ownership.

Is it? Surely it's a reflection on property prices first and foremost.

We've just spent over £250k of post-income tax savings on stamp duty. The tax man does very well out of high property values.

My aim is to buy a 1million plus property in the next few years. I have my own business which I am building to make a lot of money. To be honest after the year of all this Covid stuff, I am happy that me and my children are healthy. Some great stories on this post.