How do people afford £1m+ houses on here?

[Hellodotcom]

For those who bought their house for £1m+, how did you afford it? Where do you live? I live in a terraced house in Newcastle with DH. We only spent £180k on it!

Because I'm over 40.

Friends bought a downstairs flat in a very nice part of London (think Paddington Bear), then ten years later remortgaged themselves to the bone to buy the flat upstairs. Then spent mad money on reuniting the two.

I think they are crazy, but they made adult choices and unquestionably spent £1m+

I agree I always find them strange cause the answer is pretty obvious. People have more money?!
be that due to buying in London 30 years ago and now having an incredibly valuable asset, a very well paid job, inheritance etc. it’s not rocket science

Have a well paid job and worked crazy hours in my 20s to succeed in career. Ploughed all money into overpaying mortgage… have 12 year old car/U.K. hols. Also kids are at state not private school. Very privileged but I’m the main earner.

Like other posters have benefited from London property prices, so am now selling house mortgage free for £750k, and with savings and a mortgage buying a new one for over £1.2m.

Was this in an article written over 20 years ago?! Where i live in (outer) London there are no houses for 500k let alone 200k. A 3/4 bed terrace will cost you £1m.
You might be able to buy a house in some of the less desirable areas of London such as Feltham or Hounslow for 500k but not for 200k.

We sold our 4 bed terraced house for £1m in SW London last year to FTB - young couple with a baby. We weren't party to the info as to how they could afford it (and didn't care as long as they could) but I assume one or all of the following:

• help with deposit from family
• own savings
• inheritance
• well paid professional jobs - one or both

This has to be the case for people entering the market at the £1m level who have not built up equity.

2000- bought for £200k
2004- sold for 360k
2004- bought for £500k
2014- sold for £995k
2014- bought for £1.2m
2021- valued at £2m (obviously just a valuation, not a sale price)

So a combination of luck, especially the luck to have been able to buy our first flat when prices were more reasonable, and growing salaries meaning we could borrow more.

2005 - bought a £180k flat on a £30k salary using the pre-credit crunch stupid mortgages
2009 - sold house for £275k, bought a £500k house with then-BF in ‘up and coming’ Balham which needed work
2013 - sold house for £950k because Balham had up and come and we had done the work
2014 - bought house for £975k in area due to get a new tube station which needed cosmetic work
2018 - sold for £1.35 because the station was closer to be completed and whole area was now looking much smarter, bought dated but lovely
house for £1.5
2022 - after 4 years of redecorating and renovations (probably costing £200k), house is valued at £2m. 10 years left on mortgage

So in our case, for example we can't afford a 1mil house but only a 800k house. Because our family income is only 120k. We just took out a mortgage 4 times our salary plus deposit - gets you to around 800k

However, my sister - early 30s is looking at buying one now. Household income 200k-230k and 200k deposit. I.e. they take 4/5 times multiple of household income plus a deposit. There are a lot of young people in London with 200k household income circa age 30-35 i.e. when they want to start a family and get a family house. Interestingly in their case, they made no money on the flat they bought in 2016 (flats stalled in London around that time), so they can do this even without house price increases.

However, with rising interest rates, house prices will not jump again for a while.

You cannot buy a house for 200k in outer London where I am! the cheapest property in my postcode (apart from retirement flats) is a studio flat above a shop on a really crappy road and it is otm at £200k.

Being on the property ladder makes it possible. The last house I bought has increased in value by 55% in 8 years. Not through any work done, just from rising house prices. This is in the South but well outside of London and the South East. If you can afford to buy a property you’ll (probably) save money every month as mortgage payments are cheaper than rent and all the while the your home is increasing in value. When you come to sell you’ve made a big profit and you’ve got more money to use as a deposit on the next property

In the case of my sister, it's not like. Just high earnings

Agreed

maybe 2 bed flats or terraces for that price

no family houses in normal suburbs

where we were in SE London average 4 bed terrace was 900k plus

where we are now in SW London/Surrey borders average 3/4 bed semi is 900-950k- and I’m talking quite basic so anything nice is £1m plus

its just an average price that seems to be paid by us and our social circle

we are mid to late 30s - bought a small house and built up a little equity and the rest is savings to get our deposit - same as our friends

We actually had two £1m+ properties without being or feeling particularly rich. Just comfortable. We have one 2-bed flat in central London that we bought for 295K in 2003, we rent this out, and it is now valued at £1.2. Then we had our family home in a different part of the country that we bought for £660K in 2013, sold it earlier this year for just over a million. We have downsized abroad now, well in my home country, and spend a little under £800K for the new property to have some cash in the bank for other things too. The London flat is our retirement/a rainy day fund basically.

And this is now worth prob £2m - so probably paid off for your friends!

My BIL/SIL purchased a two bed flat in Zone 2 for around 375k, then sold about five years later for 550k. Both had gifted money from parents for the deposit but not sure of the amounts and whether they added to it themselves.

When that property sold, they purchased a three bed house in the same area for around 700k. Needed full modernisation and they also added an extension to the back. They've owned that house for about four years and I reckon would be worth about £1m now.

The reason they could upgrade is because they are both high earners (I reckon must be 200k between them) and the benefit of house price increases, buying a house that needed work and also adding to the house (extension).

They are actually looking to buy an additional small flat near the coast to visit family nearby so must be doing alright!

DH father bought a farmhouse back in 1990 for £140k, paid of the mortgage by 2005, it's now worth £1.6m, he has put about £300k into doing it up over the years. DH is the only child so at some point he will inherit it and that's how he'll have a £1m property.

For us it’s buying houses that require a lot of work, doing them up and selling them. We’ve moved three times in last ten years, current house is £1m (bought for 790k three years ago) and just about to move to a new house £1.3m but should be worth closer to £2m when I’m finished with it. First house in 2008 was 240k flat.

I’m in the same boat as your sister. Early 30s, bought a flat in 2016 that made us zero equity (but helped us save as our mortgage was slightly lower than rent).

A standard 3-bed, 100sqm home where I live is £1m+, so with a household income of £200k, savings of £350k, the way we can afford a family home is by taking out a stonking mortgage of £800k+ which makes me slightly sick to think about.

We have been outbid on houses by cash buyers and after getting the inside scoop, it’s often parents coughing up the cash for their kids, having themselves built up equity. So that’s another good route if you’re lucky enough to have wealthy and generous parents!

Was given a deposit for a flat out of London when I worked there. Rented out that flat when I left. Was given a much bigger house deposit by my dad, bought a £500k house in an "up and coming" area of London. It's now worth £800-900k. We refinanced and bought a family home for £900k, I sold the flat and spent the proceeds on extending the house which is now worth about £1m.

Oh and we have good jobs - both earn £80-90k - but really it's mostly been getting the deposits at good times that has been crucial

London:
Bought small flat in my 20s: £30k
sold for £36 k
Bought small terrace house for £70k
Sold for £240k (a previously shunned area now much gentrified + house price rises over)
Bought semi for £385k
Sold for £870k. (As above)

We could have afforded a £1m house after that, o a mortgage, but chose a different route.

1999 - bought 1 bed flat in SE London for £67,000, aged 26
2005 - sold above flat for £147,000, bought 3 bed maisonette in same area for £192,500.
2019 - sold above maisonette for £500k, mortgage paid down to about 60k so large deposit available.
Bought 4 bed fixer upper house in same area for £750k. Done a lot of work on it ( still tons to go), but house now work over £1m

Most will have done simply by buying in before 00s

The vast majority of people buying today won't see anything like the equity gains of old as FTBs are older, the first rung is £££, the cost of renovations & stamp duty is £££ plus higher interest rates

How are people so confident that properties will triple in value?

I don't think many places in London have seen that since Brexit?