To ask how so many people can afford to spend 1 million+ on a house (SE)

[BettyBoopBetty]

That’s it really. Where we live most houses go for sale in the region of a million and more and many of the buyers are young families. I don’t get how so many people can afford that sort of money on a house!? If you do, what is the secret? Very highly paid jobs? Family inheritance? What’s the norm?

Yeah high salaries and family help. DH Dad died when he was 22 and left him 50k which was the deposit, and DH works in finance and reached 100k at 30 so we’ve climbed the ladder and that’s how we can afford it.

there are a lot of power couples. like i have a friend whose boyfriend is a doctor and bought a flat with a combination of earnings/inheritance. She herself had family help and bought the flat downstairs. So they own the whole house really which is well worth over a million pounds.

People still tend to marry partners with a similar social class/ with similar earning power/similar backgrounds. If both have good careers and both benefit from family help, its not surprising that they can afford a million pound house. What would be surprising is if both spouses are from immigrant backgrounds, have no family help and are both in salaried employment.. and still manage to buy a million pound house.

Many successful professional people have kids later, so even if the kids are young, they are provably not that young. For us, and friends, it goes: buy a flat or terrace in London (or two flats if both single at the time, often with a kind but not massive family deposit gift), sell said flat for a decent mark up (often keep the second to rent out), save a couple of half decent City bonuses (100k or so) and voila! 250K deposit to buy a million quid house in the leafy commuter belt by 38/40. A decent promotion and a few good years and it’s easily paid for by 45.

We are 43 now and have one such house, a second in France, two kids at private school, investments. If you’d told us at 32, struggling with me on maternity pay in our East End flat and DH working stupid hours trying to make partnership we’d be in this position in just over a decade, I’d say you were having a laugh. A few years can make a huge difference.

In our case, luck, high salary and sadly, inheritance.

Are you in a suburb of London by any chance? Ime it's often couples who've owned in inner London pre-kids/with babies, when then have benefitted from a massive increase in value of that property, who can buy family houses a bit further out for £1milion+.

@Hayliebells yes

For us it's been driven by our salaries increasing healthily and also coming into large bonuses around the time we wanted to make the final move into a large family home. No inheritance or family support.

Great salaries for us in London and no family help. I grew up quite poor so it has been quite a journey for me!

One of the great things aboit this country. You can make your own way.

Well this thread is making me feel a bit shit. Ah well. Good for all those switched on folk though.

Same. Post grad degrees, professional careers, living well below means.

The sad thing is that’s not possible anymore. It was only possible for this poster sue to the huge increase in property prices in london that have effectively closed the property market to any young people who don’t have family money

A lot of it will be funded by equity gained mostly by rising prices, either directly or due to inherited wealth where a parent has passed on a huge sum.

So most people who buy a £1M property today won't have saved up a £100k deposit and have a £900k mortgage, more that they might have a £300k mortgage and paid a £700k deposit because they paid £200k for their previous property a few years ago and sold it for £800k, and will have had a deposit and/or paid off some of their existing mortgage.

Or they inherited £700k from their parents who paid £50k for the property decades ago and it was worth a huge sum when they died.

I bought a flat in London when I was 19 with a 20k deposit for 192k, sold it with a profit of 60k plus had a repayment mortgage, bought a repossession in another area at 28 for 300k it made lots quickly so pulled out the equity (rented it out) and bought a larger house with my husband (circa 800k) with a huge mortgage at 34. Sold repossession property recently and paid off what’s left on the mortgage with profit. House now worth 1.5 million and I’m 42.

When we moved into our house now my neighbours asked us if we had won the lottery. I was so offended at the time as we both worked hard and were good earners ( on reflection thought we also had the housing market on our side). Now though I can see we were quite young when we moved in. We were very lucky. I’m not sure my children will have it so easy.

Similar story here. Bought a flat in zone 3 with 100% mortgage in 2000. Sold it 6 years later releasing £115k for a deposit on our next house. Overpaid that mortgage, prices went up and released £870k for a deposit on the next house.....
No inheritance, just huge mortgage overpayments whenever we could and good luck.

Family help in lots of cases. If you managed to get on the ladder very young you will likely have lots of equity. Of my peers in 1m plus houses they all (bar one) got on the ladder early 20s with help eg rent free living at home &/or cash gifts. The only one who didn't & bought later earns £££££

This will be us in 2 years time. Exactly what your say. Salary increases, significant overpayments on current house. That’s it really.

One of the great things aboit this country. You can make your own way.

I couldn't have bought with family help & know very few who did. The ones who bought later spend a lot more servicing debt. I think actually if you have parents who can help that's often more important than salary.

For those younger people ie still at uni in the early 00s it's much much harder.

Huge scary mortgage, and having to take on renovations as we couldn't afford a fully done one. No family help, but decent salaries and and overpayments on our previous flat that we didn't own for long and didn't make much money on- we're mid to late 30s.

Already the mortgage rate increase has not been fun with almost £1k a month extra in payments. Feeling very nervous, but we wanted this area for schools and a shortish commute to work so we could get back for childcare pick ups.

Salary increases and moving up the ladder in increments. We never maxed out but moved up a rung, took the profit from the last one, increased mortgage for next , in line with income, and so on.

Rare I’d say we moved 5 times up the ladder. I’ve seldom met anyone who had that massive a leap. Generally in my experience it’s a few rungs to get there, increases in salary and mortgage overpayments, clearing more equity,

I don't live in a million pound house, but a nice house in an outer London borough and desirable area.

Me and DH saved up, bought a small ex-council place that needed doing up and sold it for a profit. No family help.

No one seems to want to save anymore. We lived with parents and saved the majority of our wages until we had enough. Why is that no longer an option for people? (Yes, I'm well aware that living with parents isn't an option for everyone!)
The people I know who 'cannot afford a house & can't save because there's no point' still seem to find money for eye lashes, fake fan, nights out, holidays, nice cars, expensive clothes, tattoos, insta worthy restaurants/ cocktails etc. Just save up?! After I graduated and started work in a professional job, I came home and slept in a bunk bed with my little sister. Lots of small sacrifices, that all paid off in the end.

I'm only 36, so not that out of touch.

Me and my fiancé brought a flat a few years ago and made some money on that. My partner is a high earner so we were able to upgrade to our house!

Age doesn’t determine if you are “out of touch” evidently.

Did you buy between 2008 and 2011? What fixed rate mortgage did you get?