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?

The suburbs! www.rightmove.co.uk/property-for-sale/find.html?locationIdentifier=REGION%5E225&maxBedrooms=5&minBedrooms=4&maxPrice=800000&minPrice=700000&sortType=1&propertyTypes=&mustHave=garden&dontShow=&furnishTypes=&keywords=

Losing both your parents and inheriting their estate when you are still a small child might put you in this position. You think these people are lucky or privileged but perhaps they are just the victim of unfortunate circumstances.

Jobs that pay well and often have bonuses attached:
Magic circle lawyer, investment banker, actuary, accountant, corporate advisory, management consultancy, some tech jobs, specialist economic advisory.

Often these jobs are not that exciting and many of them will involve significant work life balance sacrifices in early-mid career (and often later)

Bank of mum & dad does help even with good salaries as rent is so high.

For this generation it won’t be the highest paid who will be most successful financially, but the ones who come from wealthy families. Sad but true IMHO.

If they’re in their 30s as FTB with high salaries sounds like they’ve been saving a fair bit plus mortgage

Also not having dc yet or not having them at all.

The thing is. It’s such a high salary to maintain and such a big mortgage to service. What happens if one of them loses their job or gets ill? It’s not like a job in retail in case of an emergency will even cover the mortgage temporarily.

So I do realise I'm missing the point. But where in London can you buy a house for £750k? I'd love to know!

places in z3,4 & 5

you can buy a house in south east London zone 4 where I am for 450k let alone 750

Loads of places! My house in zone 3 is worth between 440k-500k. It's a four bed with two bathrooms

For this generation it won’t be the highest paid who will be most successful financially, but the ones who come from wealthy familie

I agree, what you inherit or have help with is for many more important than salary.

Also borrowing was cheap so many have taken on huge mortgages. I know people with 1m interest only mortgages.

@TedMullins yes you can. i just assumed they had that budget.

We were mid/late 30s first time buyers (we look younger) that bought in a zone 4 London suburb same price range in 2019. Neighbours were not very welcoming we wondered why for a short while then got over it. I eventually realised that these thoughts about how we managed to afford the house (and renovate it from top to bottom no extensions though) probably formed part of the basis on which they judged us.

We've just sold and our buyers were a FTB couple in their early 30s who I am pretty sure earn in excess of DH and I (never met them but they both had fairly searchable names) - no DC yet either.

10% deposit, a significant mortgage (over £600k I reckon) and they seem to have had change to start ripping the place apart according to my old neighbour.

I'm not sure it's a hugely different position to many more average earners, with regard to the risk.

Take home on a 100k salary is about 4900 a month (assuming student loan repayment and pension contribution). A 675k mortgage at 4.5% is 3750 a month. So if you're both on 100k, splitting that is obviously very comfortable. But if one person lost their job, the other could still cover it and you'd have over a grand left for everything else. Now that would be very tight, but if the second person got even a min wage job it would be entirely doable. And assuming you aren't complete idiots, you'd have some good savings to tide you over as well.

What I have observed on the other side of the net curtain is this:
Young-ish couple buys house, spends months and months fully renovating it with the usual drama involving skips and lorries. They sell it for a profit within a couple of years.
Another young-ish couple buy it from them. Once again, they start a major renovation so once again, we have months of skips, lorries.
Question is: what could they be doing after such a thorough, recent renovation? Is it even structurally a good idea to completely gut the place two years after it was last gutted? The increased costs of building works do not seem relevant either.

It’s filtering. Your rich contemporaries OP didn’t live near you. But rich people entering the property market 20 years later are priced out of traditional affluent areas and are living in your neighbourhood, which in turn becomes unaffordable for their average earning potential peers.

It's often an inheritance from someone - grandparents maybe. Or else they've got high flying jobs in the city. They might be hedge fund managers or similar.

DH and I bought a flat for half as much as that again at 34 and 35. 1.25m High salaries, a small life insurance payout when DH's mum died, no debt, a lot of saving. The first flat was bought was a fixer upper in an up and coming area and we made about 100k pure profit on it when we sold it.

Life insurance payout was about 50k and helped us buy the first flat, but wasn't even close to the whole deposit.

We're lucky - had educational opportunities that took us to 6 figure jobs and managed to get through with no debt except student loans, which we soon paid off. Also unlucky though, because DH lost his DM fairly young, hence the life insurance payout.

Both sets of parents aren't great with money. My FIL is a double bankrupt and my parents are fine, but made some unfortunate choices. They keep trying to borrow money off us, so they're definitely no help.

If they'e in their 30s, their parents are in their 50s and grandparents in 70s. Life expectancy is still in the 70s for a lot of folk, so most likely inheritance.
An old friend of mine was given 200,000 when in her early 20s gifted from her parents who had inherited it from a neighbour

It isn't all bank of mum and dad. It's easier when you are younger and kid free to save very well, especially if you are each on 6 figure salaries which consultants might very well be on...

DH and I are early thirties and if we really wanted to, could be looking at houses at the £1m+ mark. Both of us privileged in the sense that we are from stable loving families but neither of us have been gifted sums of money.. we each earn more than our parents did. We just worked hard and invested from the start like they have probably done.

OP, I think teaching your children the benefit of investing and compound interest rather than spending every last penny will set them nicely to maybe be comfortable money wise like this couple.

No, but it’s pretty normal in the subset buying £750k houses.

Too many factors, I consider myself fortunate, had no help financially from anyone but myself, worked my bollocks off from age 18, no degree.

Made it to ops manager from apprentice by 26 and was on £40k then, moved to a new job in aerospace and my salary doubled over 12 months, coupled with some clever investments into stocks and shares/crypto and bonds my mortgage will be paid by 35, value of current house is £680k, put down a £50k deposit.

A lot of people are quick to jump to 'inheritance/parents etc' when in reality there are some young people who are ambitious, work hard and smart with their money.

You generally find that those who make assumptions are generally lazy and believe everything is down to luck. Granted some people end up in situations through no fault of their own. But a lot don't strive to better themselves.