How do people end up living in a £1 million house?

[shortsaint]

As I do my nightly peruse (daydreaming) on Rightmove (most expensive first) I am wondering how people end up living in a million plus property?

I do not live in the south east or Home Counties, just an ordinary Midlands town. I consider myself fortunate as we come to the last couple of years of the mortgage. We probably have the lowest value house of my friends, with an above average joint income, 2 kids, both work f/t. We have had 2 houses in 20 odd years so haven't followed the property ladder, had no inheritances or windfalls. Is that what it is?

My grandfather bought our home in Hampstead 45 years ago. In asian families it's common to still have multiple generations living together. So my father never bought his own home. Bills were split by three.

If we’d bought our house 10 years earlier we’d have around £6-700k in equity.

As it is, we’ve lived here 8 years, got on the property ladder 13 years ago (so prices had already gone quite mad, we’re in outer London.)

Our first flat cost £205k (up from much less 5 years previously.) Our current place would go for around £800k.

If we wanted to leave our area we’d be able to afford something pretty amazing. We can’t/don’t want to, so we’re in a very ordinary house that is worth an objectively large amount of money!

Inheritance is the other big factor. Lots of London/SE inheritances that have been in the same hands for 40-50 years or more where the houses are mortgage free and worth a couple of million.

If not bought a while ago and allowed house price rises to do their magic, it is usually with help. In London it may be some savings plus huge salaries. But it is usually inherited/gifted money for a deposit from parents or grandparents. Say £300 gifted or from inheriting a smaller property. Then if a couple's combined earnings are £140k per year and they get a 5x salary mortgage if lucky/right moment.

Probably a narrow bubble but a good number of my younger sister's friends (all late 20s/early 30s, privately educated in London and generally from wealthy families, all in jobs like banking and law- top London firms paying 6 figures plus bonuses) were often helped by parents with deposits and then sold their £500k flat, moved in with partner and combined with both their deposits and salaries could get to nearly a million.

We went up the ladder but in just a few big steps, thanks to buying in areas where prices increased quickly and doing works that added value (but doing a lot of it ourselves)

Like a PP each house has doubled in value; current one is valued at £1.5m but we’re not doing works to sell it; it’s just for us

I married well 🤷‍♀️

If you bought long enough ago almost anywhere in the South, then prices have risen by multiples.

Being older helps as does being lucky. We bought a house in South London in about 1995 for £116,000 in an area which was a bit rough but massively improved while we were there. It last sold for £1.2 million in 2020 (not sold by us but we have moved a few times since and our current property is probably about that).

We had x2 high incomes and many years of saving behind us.

A real mix for us. Good salaries, no kids, help from family, early inheritance, making good decisions with our previous property (bought in a good area so by the time we sold the value had increased dramatically) and last but not least, drastic saving. Overall it has been a combination of hard work and total luck/privilege. We do have a pretty big mortgage, though!

Also in the midlands

Bought in 2002 for 80 sold for 110
Bought in 2004 for 230 sold for £410 (after extending)
Bought in 2009 during market crash for 760 (marketed for £900) extended and renovated now worth £1.6m

Ours is just shy of £1 million. We saved until we were nearly 40, then had some inheritance added to savings, so had a big deposit. We both earn reasonably well. Honestly, it’s just a lot of saving, family help, and being able to get a big enough mortgage.

We are currently house hunting with a budget of around £1m. For us it is entirely salaries.

No family help, only a moderate rise in the value of our current house as we only bought for the first time a few years ago.

DH has family money and that paid for our house outright (just short of £1 million) and we live in the North East.

So family money for DH and luck for who I married on my part

Interesting. And the market has a lot to answer for...

Out first house was bought in 1999 for £95k and sold for £167 4 years later. Thought we had a good deposit and bought second home for £200 and it is now worth double that. BUT. Our mortgage is still nigh on £800 a month for another 2 years. We had 2 kids and public sector salaries so couldn't have afforded more than that. We've improved - small extension, kitchen, bathroom etc.

I long for my dream house in the countryside. No chance. I need another £250 min! And I'd like to retire ONE day!

My sister lives in a plus million pound house that she is properly renovating as well. She and her husband earn a lot and he inherited a couple of million.

The house I grew up in is now valued at £1.2m but we sold it for about £300k in 2000. In the Cheshire Golden Triangle.

We bought individually at a very good time and both sold properties to buy a place that needing doing up. Almost made double on that place. Did the same thing again…made just under double and now have a house valued close to 1M.

Currently doing the same thing…

Bought house 1 2002 for £220,000 with an inheritance giving us a 10% deposit.
Sold in 2005 for £225,000.
Salary increase in that time.
Bought house 2 for £325,000 in 2006.
Sold for £300,000 (a loss) in 2014 but mortgage paid off by life insurance (had cancer).
Bought house 3 in 2014 for £750,000, using proceeds from house 2.
Overpaid mortgage and paid off a few years later.
Prices have risen hugely where we are so currently worth c.1 million.

We both have very high paying jobs. No inheritance, family money, other help or windfalls. Lucky enough to go to good universities and do well. I, in particular, come from a relatively deprived area and had a single mother. I see my privilege but at the same time we've done pretty well from where we started.

'Family money' always confuses me. Does it mean that parents buy a house for their child? Or is there a trust fund?

Where I live £1m would buy a very modest house. Million pound properties conjure up images of footballers’ McMansions but I can assure you in many areas of London, this would not buy anything approaching a dream home. Sadly.

@CharlotteGoldenblattYork

'Family money' always confuses me. Does it mean that parents buy a house for their child? Or is there a trust fund?

Generally they mean an inheritance or parents gifting a deposit. There always seems a reticence to believe on here anyone has done it themselves, it’s either you bought decades ago or someone else did it for you, it’s very odd, most folk I know did it themselves. Most folks reach their fifties before their parents pass away and most parents don’t have the ready cash to give enough money to buy million pound houses.

@shortsaint

Interesting. And the market has a lot to answer for...

Out first house was bought in 1999 for £95k and sold for £167 4 years later. Thought we had a good deposit and bought second home for £200 and it is now worth double that. BUT. Our mortgage is still nigh on £800 a month for another 2 years. We had 2 kids and public sector salaries so couldn't have afforded more than that. We've improved - small extension, kitchen, bathroom etc.

I long for my dream house in the countryside. No chance. I need another £250 min! And I'd like to retire ONE day!

So how old are you? How close to retirement? I think the issue here is you’ve focused on paying off the mortgage, plus neither are big earners, you’re an average family with kids, so had other expenses.

@Bluntness100 early 50s, though I did not buy a property until I was 30. Had VERY low paid jobs in my 20s whilst my friends were already on the ladder. We have a few years of supporting kids at uni (one already there) then I'd like to be p/t after 60. Idealistic but y'know...

Unless you’re high earners or have managed either to renovate or to benefit from
Market changes (or both) then it’s hard to get there. We’ve had the benefit of all of those things but haven’t had any family assistance/inheritance. The main thing is the salary levels though. Our house is worth a lot but we both earn six figure salaries in an area of the country where that isn’t common.

No inheritance or help here. My husband and I both bought our modest houses separately when we were both young. When we met, my husband moved in with me but kept his house and rented it. We both worked hard to make inroads into the mortgages and overpaid where we could. We have now paid off both mortgages and both have benefitted from increases in value - now worth around £525,000 collectively. We have both had payrise and are now both high earners and have also managed to amount some good savings. We are now selling big houses and upsizing to a house worth £1.2million in the next couple of months.

We feel we have done well but we have both worked hard for it. We are not flashy and we don’t tend to go on glitzy holidays or have loads of designer goods although we have chosen to send our son to a private school. We have generally prioritised mortgage and pension which I am now glad of.