Wealthy young people!

[Sushi4Dins]

There just seems to be a lot of them, suddenly! I just don’t understand how, in the middle of a cost of living crisis, droves of young people are still buying all these houses!

I live in a London suburb (leafy, green, ‘naice’ schools) and a young couple just bought the house next to us. They’re lovely, first time buyers in their 30’s and both consultants of some kind who used to live more centrally. There’s lots of similar people moving into the area.

This particular house was on the market for £750K. We’ve lived here just over 10 years, but certainly couldn’t afford to move here now! How is that affordable for first time buyers? They’ve also been on long haul holidays twice in the last three months.

I have teenage DC and I’d like them to become these people. How do I make that happen?

I am in my early 20s and while I cannot (yet) afford a house, I have a couple of friends my age who have been able to buy nice houses due to large sums of money from their parents.

One of them had grandparents who passed away, when the house was sold my friend's mum inherited over £200k. She gifted £100k to my friend, who then used that as a deposit which allowed her to have a smaller mortgage. She still earns above average though, I'm not sure she'd have been able to afford the same house if she was on a lower salary.

My other friend's parents did equity release on their property and accessed funds that way to allow her to buy a home.

Family money

If not then you give them a good education, encourage aspiration, research high paying jobs in fields they may enjoy and work out how to get there

If anyone is entrepreneurial, they can also do something on the side

I am depressed by it all. If you find the answer let me know.

Sell your house downsize give them 200k each
Tell them to study and choose well paying careeer

You tell your DC to chose a career that pays well rather than 'as long as you are happy and enjoy yourself money is not that important'. You know.. All the usual law, finance etc. You also encourage them to fall in love with a similar minded young professional from the same industry. Together they can buy the house in your leafy area

I am almost sure it will be family money. It is in my circle. It is a cycle, family money gives good education and lead in to good jobs, those people then do the same for their children and help them buy their first London flat, they meet another similar person, two incomes and maybe even two lots of family money and they can afford the huge house.. on it goes

They get a sum from mum and dad to buy their first property. Simple.
It all depends on your family background.
I always say: your life is determined in the womb. Everything hinges on it.

Because they are allowed to graduate, then live at home and all their salaries are pocket money, meaning they can save. Pff

Lawyers, bankers, accountants, surgeons, there are lots of people in their thirties earning enough to spend that much on a house in London.

A graduate trainee in banking will start on around £70,000, and by their mid twenties can be on several times that.

Family money. Significant amounts of it.

I'm from a very expensive city, and all the people I know who bought in the city either inherited or were given a LOT of money. They mostly have well-paid jobs as well to afford the mortgage, but not enough to save what they would have needed. Those who haven't been given large sums of family money live on the outskirts, or moved elsewhere.

If they're both consultants then they could be on high salaries which allows them to buy without a huge deposit?

Rich parents

Against the narrative here, but early 30's, so working for about 10 years. Say average pay £100k each, not beyond the realms to think they could each have saved £100k each, and then 3 x joint income, there's your answer. No need for parental input.

Assuming 10% deposit, for mortgage purposes, they would need a combined income of £150,000 to qualify. Now, whether you would want to spend that much on a house with such income is another question but if they are both consultants of some kind, chances are their combined incomes would be larger than £150K.

Just to be clear, they’re both very nice, clearly very intelligent and extremely well educated. She’s Nigerian and he’s Scottish and it’s clear they have very good jobs. I don’t begrudge them anything, they seem to work hard for it.

I suppose I’m just looking at it from the perspective of 20 years ago. Even with a bit of support from our parents (which we got) and quite good jobs, my husband and I wouldn’t have been able to buy a five bed house around here straight out of the gate. And there seems to be so many of these couples suddenly. It’s almost like there’s more money to be had nowadays, despite so many people having less?

Am I making any sense at all?

I know of an 18 year old who was able to buy a flat, thanks to bank of parents & grandparents.

1 bed flat round here 450/500 k, 'vibrant' zone 2/3. If they each had one to sell with a bit of equity, goodish jobs, yes, possible.
Plenty of couples here, having 1st kids, mid 30's buying the houses. LOTS of bankers tho.
Neither of my kids will be able to buy normally here. Could poss stretch to a share to buy tho, or maybe go in together on a 2 bed.... Lately I've even thought about splitting our house into flats. And they get somewhere that way...

The ones that baffle me are ‘influencers’ on YouTube, early twenties and their first house is a new build four bed detached, they aren’t surgeons or accountants, they just seem to shop for a living, once they have blinged up the new build they then move on to a bigger place and start renovating and extending that one! It seems that a lot of young people are pretty wealthy.

Unlikely to be bought by the couple saving. If they are both Consultants they are likely to be on £70,000 ish each, but due to the amount of training would have only reached this salary level maybe 5 years ago. Far more like to be family deposit plus mortgaged on a £140,000 joint income.

Or dead parents.

We weren't FTB when it happened but I inherited half a London property after DM died when I was 29. It gave us a big deposit and we were more than able to afford our place in a similar London suburb. If they're on reasonable money and have either saved, inherited or been gifted a deposit I can well see how it happened.

The couple we sold Mum's to were early 30s newlyweds - they'd both owned flats and were combining equity to buy somewhere a lot bigger.

Couples in their late 30s are also just old enough to have benefited from 95/100% mortgages and if they bought in London/Home Counties they'll have seen a lot of equity increase over that time.

You probably earn less than them then.

It’s perfectly possible for couples in their thirties to be earning hundreds of thousands a year each in London.

My child and partner in their mid 20s are corporate lawyer and investment banker.

the type of roles that allow young people to buy at this level have pretty much always been the same

ignore the whole bank of mum and dad rhetoric, like High earning jobs don’t exist, very few mums and dads are shelling out close to a million inc stamp duty and costs for their kids, but many many young people are in high earning jobs. Many more are not obviously.

but it’s the same old, corp, tax or commercial law, banking, mergers and acquisitions etc that pay. Even at this age you could be a gp on over 100k a year.

I see those sorts of people as entertainers, essentially. In my head, they all earn far more than ordinary folk can fathom in truly mysterious ways.

Lots of Aldi version Kardashians.

It’s almost like there’s more money to be had nowadays, despite so many people having less?
you are right OP. It’s a zero sum game - if someone has less money it means there is someone who gets more.

I almost definitely earn less than them. Or perhaps on par. But I’m 20 years older. That’s rather my point, which I’m clearly not making very well.