Is the London dream unaffordable for young people?

[fenika]

Other than London being an exciting place to live for culture, fun, experiences, and the like, it is now completely unaffordable.

We are from a working class family in the north. My brother was a complete swot at school and got a place at Cambridge. He became an accountant in the City of London where he met his wife. They worked their way up in corporate careers and built a huge amount of money in property. They are now retired at 50 and live very very comfortable lives.

My dd went to the same state comp, won her place at Oxford to study economics and is now working in finance. Her boyfriend is also in finance. Between them they earn in the top 1-2% of the UK. Despite this, even if they continue in the long term in their careers, they won’t be able to afford much more than a 2 bedroom flat in a nice area. They work just as if not harder in their careers.

Is the dream of moving to London to move up in the world a dead dream?

Having said all of that, in another 5-10 years even Zone 5 will be completely out of reach.*

Not sure about this, maybe the cheaper areas but I think growth will slow down & be quite stagnant for a few yrs in general. So much of the past property market was driven by equity gains which is harder for those now on the “lower steps”. Our flat went up 200k in 2.5 yrs when we sold but prices haven’t really changed in the last 3 yrs. I also wonder if there has been a small change in mindset. I have a fair few younger colleagues & historically they would aim to buy a property usually a flat anywhere because it’s a “safe bet” & will increase in value etc.but many are moving further out or relocating to other cities to buy as they actually want to get value for money, I don’t blame them

My in-laws house was 90/100k in the late 90s, those houses go for over 2.5m now. Obvs Hackney wasn’t so nice in the 90s but the price growth is insane!

Rather than considering whether it is affordable the question you should be asking is what is the trade off?

I earn 200k and used to live in London. I had a decent standard of living but fixed costs incurred from living in an OK area were insane.

Fast forward 4 or 5 years and I earn a similar salary WFH in another part of the country.

My current standard of living is off the scale compared with the one I had in London. I will also be able to retire much earlier than would have been the case had I remained in the SE.

I realise many people will have family and personal ties that make it hard to move but I do think at times some are blinded by believing the only solution is to make the best of things in their current location.

2 people on 100k each living outside of the SE can have a wonderful life.

The thread is the London dream. Here you have an example of people studying 7-8 years each, have a previously highly rated profession but will end up not being able to afford what most define as desirable area. Now on the 2m, you can add to Islington, Hackney, Muswell Hill, Highgate, East Finchley, Hampstead, Queen’s Park, Kilburn, Swiss Cottage, Camden, Chiswick, Hammersmith, Barnes, Richmond, Wimbledon, East Dulwich, Clapham, and so many more. Now am sure, some people will find a link showing me a 1m 4 bed, which will likely be pokey, out of catchment, next to an A road, etc but reality is most of the above costs £750-£1000 a square foot, so 1.5m-2m for 2000sft, a confortable 4 bed (not detached please stop inflated my statement) people with good profession used to be able to raise their family. I don’t hate the game, just responding to the London dream question. Yes it’s dead in a way that London housing market resemble a kleptocracy to maintain the status quo.

It’s a bit of a COVID glitch though, some people who proved themselves in a company for years have been able to carry on from home, not sure the trend of more WFH is still up and certainly many companies publicly states they want their employees in the office. Also, with the incoming economic recession, I suspect employee heavy on WFH will be disproportionately affected by redundancy so let s see how this survive a full economic cycle.

Of course it's affordable for them, as with all other areas in London people buy a 1 or 2 bed flat, then build up to buying a house.

next to an A road, etc but reality is most of the above costs £750-£1000 a square foot, so 1.5m-2m for 2000sft, a confortable 4 bed

Well you’ve changed the parameters now as 1.5m is quite a way of 2m! Plus anything under 2000sqft wouldn’t be pokey in my mind…

Fully remote is likely a covid glitch but hybrid? which existed in many industries pre covid. I think it’s here to stay plus we have a shrinking working population & job shortages in some fields so certainly power will shift to some employees. The press has very much pushed the “get back to the office message” but offices still have high vacancy rates particularly in Canary Wharf & many companies are relocating to be closer to transport links, reducing sq footage (which again was shrinking pre covid) & upgrading to more modern office spaces to entice back the worker.

I agree that the idea of the ladder particularly in London doesn’t really exist.

The ladder idea doesn't work. I know most people just buy a house then stay there. Because people buy later they've done all the moving around in rentals and usually have a career, and kids, already so need a grown up house not a flat or project. We bought a 2 bed then extended. And will stay here forever hopefully. Stamp duty is a pointless cost etc.

I understand your point. My husband and I live in London and we've ocassionally talked about how we would be able to retire early if we moved to the countryside or up North, but I've lived in many places in the UK and every other place feels without a pulse. London is the only place that made me feel like I was alive.

We are lucky enough to experience the good sides of London and we can't possibly take away London from our son who was born and raised in the city. If we leave, we know that coming back may be difficult in terms of affordability. For us, London really is the dream, although we understand that's not everyone's experience.

this is so true. the whole 'up the property ladder' thing doesn't work anymore. the cost of finance and housing is so extremely high compared to average incomes that if you managed to save enough money to buy (maybe at 40yo) the idea of upsizing from a 1-2 bed to a 3 bed house is near impossible and will leave you enslaved for life.
people really don't understand how fucked the uk is, the glory days are well and truly over, and its the property market that has fucked it for the country, especially in the south. unsustainable.

"and quite a life of poverty for anyone who isn’t born into money or on a ridiculously high wage."

So most people then? And as you say for that reason the property party is well over, the only thing keeping it going was zero interest rates on the mortgage debt. Can`t believe that people were loading up on the debt tokens and pretending to themselves that interest rates could never rise again!

My DS, at age 30, bought a 2 bed flat in a gated community, two years ago.

This is in Haringey, which is eclectic neighbourhood, which I think will eventually be the new Clapham.

They like it. They don't need to do a lot of travelling as they are still able to work from home, but can commute to work easily enough. For going out, they have a lot on their doorstep.

I think what young people need to do is sniff out what might be a diamond in the next 10 - 20 years time, and invest there.

I think what young people need to do is sniff out what might be a diamond in the next 10 - 20 years time, and invest there.

Tbh I think those days are gone & increased hybrid working means traditional areas that might gentrify will likely change. Plus fewer young people in general.

But is it an aspirational dream or is it a necessity??

The "top" financial jobs are centred on London so if you want a top financial job, you don't really have a choice but to get a job in London. There are very limited career options in other big cities and virtually no options at all out in smaller cities and towns in the regions.

You are right. London is done in terms of the find a nice area and wait for prices to gentrify.

The centre of town is now really driven by rent and high rent for finance workers.

You can still buy a nice flat but where people live if they are professional has vastly changed.

To what level of gentrification an area has or has not reached is almost irrelevant in 2023. ALL of London is unaffordable for average income earners. This means the city is lacking real character, there is less chance for subcultures to breed, like they used to. Essentially everyone is living like a rabbit in the headlights, slave to the money machine barely able to breathe. It's become very boring and sad.
Today I wouldn't bother moving to London out of choice, I'd move somewhere more dynamic and accessible like Liverpool, Glasgow or Bristol.

I agree @Sublime66 pretty much all of London has gentrified in price terms. And I think younger people will more look to other cities & other countries tbh.

Yes, exactly. Those days are gone. Things have been going downhill in most places for some years. It's not difficult to observe if you just walk around most high streets in the UK.

London isn’t that expensive!

I think prices will eventually drop. Not by much, but a little. I mean Dublin property prices are already dropping! London won’t be far behind.

You are deluded or live in a bubble

WTF is the “London dream?” Loads of early career professionals move to London after graduating: law, banking, media, arts, tech, medicine, science, higher education. They rent. Some of them end up buying there, usually when they couple up and start thinking of children, some of them move elsewhere once they are established on their career path and either commute back in or move elsewhere altogether.

This was the case in the 90s when I graduated and stayed in London for work (I went to a London university but am from Yorkshire) and it’s still the case now.

Clapham, Hackney, Camden, Bethnal Green etc are literally stuffed with young people starting out on their careers. Some are doing great, some are struggling, some are basically sofa-surfing (especially in the arts) but ‘‘twas ever this.

But this is the case in Sydney, Van couver, prob NY- people move around these days, they buy property anywhere, there are many many rich Chinese,Russians etc who want a nice safe country to park their dosh.
To be angry at the ‘privileged’ previous generation who weren’t in a global world with the ability to go online and buy a house anywhere is a bit pointless.

'twas ever this'
No it wasn't. You only need to check the numbers relative to incomes to see this immediately. Many things have changed.

Yeah my in laws house was about 90k in the late 90s now they are 2m plus. Hackney really wasn't like i5 is now 😆