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?

Depends where you are too. My dd is house shopping currently, she's saved every penny herself by working through university, earning scholarships for excellence, and her joining bonus for her job. Buying with partner same age. She's 22. It isn't in London, £260k is her budget.

Not always family money, give them some credit!

My niece and her husband, early 30s, bought a house last year £1m+ and are planning to buy an inner city flat next year. They work hard and earn very well - think high six figures between them so it’s all their money as they come from a normal family where there is no family money.

It really isn’t. The total amount of wealth can (and does) increase. The idea that there’s a fixed amount just doesn’t work.

They must have high paying jobs, plus they are a couple. They could have family help, or good bonuses. 70k is not a very high salary to be honest, esp in certain industries (e.g. banking, software etc), so they could easily be on 150k+ each plus bonuses and share options.

Do you think a ‘cost of living crisis’ just means all people stop having any money? All it means is that the average cost of goods is higher than the increase of the average wage.
Plenty of people still have good jobs. Plenty of people still get promotions, they still get pay rises or they can alter their spending to inflation hits them a bit less.

my husband and I wouldn’t have been able to buy a five bed house around here straight out of the gate.
Is in your 30s really classed as straight out of the gate though? Your average 36 year old is 15 years out of uni. That’s well into a professional career.
20 years ago people actually had a much larger spending power for property compared to now so your analogy doesn’t really work.

I am very fortunate to be in a similar situation in my early 30s. I have a good job (roughly top 10% salary-wise), saved a good amount over the last few years and yes, was very lucky that my parents gave me a substantial amount. My partner who I bought jointly with is a very high earner (top 1%) and saved his half himself. And we have a fairly large mortgage, although with a good LTV. Although we have only just finished the purchase, we were lucky and got an interest rate locked in before they went up lots.

‘Straight out of the gate’ meaning as first time buyers, in this context. So, no equity. 20 years ago, first time buyers weren’t buying 5 beds in the London suburbs.

And, in this particular situation, they’re in their early 30’s and both have postgrad degrees, so 10 years working, tops. In London, most people aren’t able to buy at that stage. Much less buy a large house in an expensive area. At least, that was the case until fairly recently. It feels like there’s been a shift.

It’s not about them, specifically. I suppose it’s more general wondering as to the current financial zeitgeist.

Well done to both of you! May I ask what industries you both work in? And level of education? Just general info, if you’re comfortable sharing it. It’s fine if you’d rather not!

OP, you only notice the people that can afford it. For every person/couple that cam afford £750k as first time buyers, there will be tens, even hundreds that can't and are struggling to buy anything.i see younger (20s ) kids saving and saving and stretching themselves to buy 150k houses.

@Sushi4Dins 20 years ago, first time buyers weren’t buying 5 beds in the London suburbs.

Of course there were though!
There are rich people today and there were rich people 20 years ago.

Not everyone earns an average salary, otherwise it wouldn’t be the average. There will always be people who are high earners.

@Mapletreelane That's certainly very true.

@Swiftswatch I think there seem to be more of them around just now, and that they seem to be skewing younger. It’s fine if you disagree.

This was dh and I in our twenties - the neighbours round here thought dh was a gangster of some sort🤣.

No, he just has his own business which he works very hard at and makes a very good living.

This could be any one of my friends. We are all early to mid thirties and Live in London in houses ranging from 500k-1.5mil.
Earning 75k each they could borrow 675k and then a 10% deposit of 75k makes 750k.

It seems the parents who are gifting large amounts of money to their children to buy houses are the boomer generation. The generation that didn’t have hand outs from their parents, worked hard, low property values, good pensions etc, saved their money and benefited from all this.

The millennial generation haven’t had this start as everything costs so much, and so further rely on their parents to get onto the property ladder, even if they’re successful with good jobs. It’s also the generation learning to live for the moment, enjoy what you have , save but spend too. But will Also take financial risks.

makes you wonder what the next generation will face? Parents who used all their money? Have lots of ‘stuff’ but no cash to gift?

obviously all of this is generalised for the most fortunate

I am mid 20s and have just bought a flat in outer London with my partner. We have bought outright but he has paid the majority (>80%)

The money is a from a combination of savings, his salary (banking) , gifts from parents and inheritance from a variety of deceased family members

I earn an average wage (civil servant) and appreciate I am extremely privileged to be mortgage free at this age

I am well aware this would have been impossible alone - I would imagine a lot of these people are in a similarly lucky position. I am grateful every day but well aware I didn't earn any of this which I do struggle with!

What others said - family money. I live in an area where the standard house is £1.5m. Maybe £1.3m with the wind behind you (and coming in from your cracked Victorian windows). Two sets of friends have bought recently - first time buyers, husbands in civil service, wives researchers in what are not senior roles or lucrative fields.

People really have no idea how much some people in boring corporate jobs can earn. In middle to senior management at my company, everyone is earning 6 figures and some many more times that. I think some people just think that 'Bob in accounts' earns about 50k....erm no, about 300k.....

Good jobs or rich parents/inheritance. I know only one family like this. His dad owns successful business, so obviously they helped out. It doesn't happen to too many people though, so I'm trying not to compare myself, as I'm from completely different background. Comparison is a thief of joy as they say.

I’m surprised (maybe shouldn’t be!) by how many PPs are immediately screaming “family money”. As a few people have pointed out, 10+ years into a consulting job in London you could easily be on well over 100k each depending on the type and level etc. And sure they won’t have been on that much the whole time but with pretty much guaranteed pay rises and bonuses each year they are definitely likely to have built up substantial savings especially if they’ve been living in flat shares etc

Next generation down, ages range from 26 to mid thirties, all have their own homes bar one who isn't buying because she wants to move abroad. None had parental help to buy , although one did live at home for 18 months after university - paid board but was given board back when he moved out

All earn far more than I have ever dreamed of earning. There are some young people doing very, very well.

As PP's have said, it will be family money.

Just think how much properties have gone up in value in the last 20 years.

I know someone that bought a property in SW London. It is a total do'er-upper. Obviously lived in by an old person that hadn't modernised since the 1970s. Due to its location it sold for over £1m, despite the amount of work that was needed.

I imagine the children or grandchildren of that estate did very well out of it.

Deposit from parents combined with a decent career and marrying someone with the same.

20 years ago, first time buyers weren’t buying 5 beds in the London suburbs.

of course they were, the same high earners for their generation, those in the lucrative careers. I work for a large corporation, our starting salary for grads is 45k. That’s at age 21/22. Which is by far not the top payers in the field. And irs not a law/finance type industry either, just a global corp. By early 30s they can afford your neighbours house easily.

I agree with a lot of posters who see folks and think oh they just have a boring corp job, and have no idea of salaries. I also agree with the statement that for every High earning there are ten who will unlikely ever to be able to afford your neighbours house.

The only person I know in that age group who's bought a house worth that sort of money is a plumber!! If they get family money it must be from his wife's side of the family and it's not from his.