Depressing difference in house price outcomes

[coldaire]

I’m a teacher, as is dh. When training to be a teacher we made some lifelong friends who became a couple and got married.

None of us come from any family money. So just teacher’s salary.

We bought where we were from in the North. Bought in a nice place near a city. Paid £250k for our house in 2006. Our friends bought in a good part of London for £250k in 2006.

Our house is now worth about £370k. Our friends house in London is worth £1.6mil. Neither of us have extended and they’re both a similar size.

Friends have now sold up, retired to the coast, and given their daughter £800k towards a house so she can buy in London and is starting a family.

We could sell our house of course, but even giving £100k to our daughter is no where near going to help her buy a similar house to friend’s daughter.

We made a very good amount when we sold our house in London. When we bought in 2000 the area was a dreary, stabby dump. It was a massive gamble. It could have gone either way. Presumably the same went for your friends when they bought.

My Northern pals (I'm from Yorkshire) had paid off their mortgages by the time we'd even saved enough for a deposit.

Apologies if it was just an arbitrary figure, but if you are able to give your daughter a 100k deposit, that is still a lot of help. As pp said most people are unable to give their children £100k much less £800k. Genuinely don’t compare, you’re in a really good position, I’m sure your daughter will be so grateful and she’ll be able to get something great, especially if she buys with a partner.

Not good for society I agree @sorestupid
( but quite good for the lucky individuals)

OP, you are looking at this the wrong way.

Based on what you say, your daughter will end up with a much smaller mortgage than your friend's daughter due to location, for a similar size of property.

The differential between London wages and up north are not even double. So whereas your friend's daughter will have the noose round her neck of servicing the larger mortgage, your daughter should have less pressure and stress.

Im confused. You live in the North. They live in london.
There is nothing to be depressed about. These are completely different locations. Where did you buy in the North? 2006 is right before the housing crash too, so you may have bought at a premium at the time?

I used to live in Manchester and no way would I buy a house there at London prices. It does not offer what London does even though I loved Manc!

A lot of people are also leaving London. It's not the same. It is possible your friends got lucky?

Your friends also decided to sell up now and retire? They sounds young and not sure how much they can stretch if they gave their daughter 800k. I don't think that makes sense!

Agree, I'd like to know!
Sounds like Wimbledon to me (central or South) which is pretty much a dump these days.

Somewhere East would see the growth eg Hackney & some parts of SW London

Sounds like Wimbledon to me (central or South) which is pretty much a dump these days.

Lol, a dump?!

@sorestupid yep. Have you been to centre court shopping, the high street? it's a dump! I rented in Wimbledon in 2019, the house a street away from me was bought at 1.5 million in 2018, and they sold it in 2023 for 900k. It's gone down in value. A lot of houses on that road ar 900k now. Just normal Victorian houses that were originally 80 sq ft but given a kitchen extension and loft conversion. There;s nothing special about central or South Wimbledon. Have a look at rightmove, all the streets right close to the high street. They were once 1mill+, now dropped a lot, many reductions.

yes it was Wimbledon!

Nothing special doesn’t equal a dump though & I pass through quite regularly. Prices in many parts of expensive London have stagnated in recent yrs or reduced particularly flats bought post Brexit. Interest rates at that budget makes a difference.

Where do you live now?

yes it was Wimbledon!

1.6m for a dump? 😆

Haha I knew it!!! It was not a lucky guess!
Don't feel bad, OP @coldaire
Honestly, they just got lucky - timing.
Just make your house a home. Home and health is all that matters :)

Believe me. People are stupid and pay for stupid things. Like I said, check rightmove. The houses are meh. I grew up on the area.

the house a street away from me was bought at 1.5 million in 2018, and they sold it in 2023 for 900k.

Although I think it’s unusual & not the norm to sell for a 600k reduction.

I bought in London in 2014. I will be lucky to make my money back if I sell.
It's galling but I know I'm better off than more people.

Comparison is the thief of joy

@browniesareyum I grew up pretty close & yes like many parts of London you pay a fortune for a very basic house but again I don’t think that equals a dump….

Is your daughter with a partner, if so she will probably be able to borrow around 100k if they're both on ok ish incomes

Theoretically, if you did give her 100k, then they could probably find somewhere for 200k?

Ball park figures of course

most peoples houses don’t turn such a massive profit. Most home owners are in a similar boat to you. However lots of people aren’t lucky enough to rent, never mind own. Homelessness is such an issue

I’ve been saying on these threads for years that lots of London property was stagnating (particularly flats) & often got called a liar bizarrely. Much of the market was based on equity gains which in recent years has been far harder to build.

@Fallenangelofthenorth if buying a house in London then you would still have to work full time even with £800k - even if they bought outright (and you couldn't do that even in Zone three for a three bed terrace).

if buying a house in London then you would still have to work full time even with £800k - even if they bought outright (and you couldn't do that even in Zone three for a three bed terrace).

Why do people post the above?! There are plenty of z3 areas that you can buy a terrace for less than 800k 🙄

@sorestupid i guess it depends on the person. but it's a dump to me because centre court shopping mall is literally bankrupt with a caving in ceiling, barely any shops there, most shut down. the most buzzing place in the mall is the mcdonald's with a million school kids who run around and throw things and often act up outside on the high street behaving like hooligans. every day!. the restaurants are basic although a couple are fine. There is lots of traffic and pollution (pollution health issues are more understood these days). the houses are basic. they are the same houses you get anywhere inc up North.

this is true. when i see posts claiming nothing can be bought in any place in london unless 1mill is spent makes me laugh. they don't know london. or zone 3/4

What did they buy in Wimbledon for £250k in 2006? That would not have bought them anything like what I am sure you got up north