£800K houses in nice but not uber desirable areas of the north

[Fibrous]

I live in a nice enough but not particularly trendy area not a million miles from Manchester. It's not Trafford or Cheshire or any of the traditionally expensive areas surrounding Manchester. There are loads of houses on the market around the £800K mark and upwards. These are older houses, beautiful, but not necessarily modernised.

I'm just wondering who can afford these houses? They seem to be sitting on the market for ages - so maybe that answers my question. But my DP and I are on fairly good (well above average) professional wages with no kids, and we can't justify the massive mortgages on them or the modernisation costs. All of our friends are dual income professionals with good jobs (medics, engineers, business owners etc), and none of them are buying anything more than about £500K.

Are these houses now just out of people's price range, or who are they for? We had an influx of Londoners cashing in and moving up in covid but that was a brief spurt.

Is this the same elsewhere in the country?

Looking at the sale history for some that are on sale for about 900K, they last sold for about 200K twenty years ago. That sounds infinitely more affordable!

That looks like a classic case of done building work and trying to recoup costs.

Houses in that price bracket often take ages to sell here in Durham, too. Like this one. Though, given the assertion that there is mobile phone coverage (it's in a black spot for at least 3 of the 4 networks) I'd wonder what else needs to be taken with a pinch of salt.
https://www.rightmove.co.uk/properties/146216642#/?channel=RES_BUY

Oh my goodness that is a bargain! I need to move to Durham! And I don't care about having mobile phone signal 😂

Some profs get quite a lot more than that. Isnt £80,000 pretty much the bottom of the professorial scale or is that just at red bricks?

My parents bought their house in a niceish bit if the north for about £ 60k in the late 80s. My mum was a SAHM , my dad had a decent but not mind blowing public sector salary (think similar to GP). They sent 3 of us to private school, we had expensive hobbies, foreign beach and skiing holidays each year and they had plenty of spare cash to renovate the house. No inheritance.

The house now is worth around £1.2m. My dad's profession has had decades of below inflation pay increases.

That garden! To have a garden that size, though, you need to be doing minimal hours at work so you can spend all day in it pottering, not have a massive mortgage to pay.

Yeah wages just really have not kept up with house prices. I know a lot of uni profs too and the only one in a massive house has a hot shot lawyer as a wife.

I think you're absolutely right that the buyer pool for 7-800k places is dwindling and the fact that these places aren't selling is indicative of that.

I'm 35 and we're in the process of buying for 750k, with no inheritance and no gifted money, so I did want to give an alternative perspective that it is possible (but not easy). For us it's a combination of equity and good jobs (joint income 140k). We bought our first flat ten years ago and have always heavily overpaid the mortgage. Holidays were camping trips while our friends had multiple foreign holidays a year whilst maintaining they couldn't afford to buy. Every bonus we've had has gone into the mortgage. We couldn't overpay much during the expensive childcare years but now we're past those, we feel comfortable taking on the bigger mortgage.

We've been lucky too with buying and selling at good times, and the two flats we've sold have increased in value a fair bit. I don't deny we're fortunate to have good jobs. But we've also been quite determined and sacrificed a lot compared to our peers. We live pretty frugal lives relative to our income bracket, and it's paying off. I'm bracing myself for everyone thinking it's gifted family money that's enabling us to buy at this price point though!

That's the problem. Wages have in now way kept pace with house prices. An above average but not huge salary could buy a fantastic lifestyle in the 1980s. That hasn't been the case for several decades.

Having said that, I suspect there will be quite a lot of boomers who end up disappointed with the amount of £££ they can get for their properties over time. Pensions market looking pretty shaky too- BOE bailing that out now.

It sounds like you’d have been better off buying up north!

I’m also in London. My flat hasn’t really moved in value in years. I think it reached its ceiling. It has obviously gone up a bit, but not as much as other places.

Interesting discussion OP. I wondered the same. Are the agents perhaps valuing them at those prices on the basis that with wfh post covid the notion was (query if it still is) that higher paying jobs could be done further away from London etc such that the pool of potential buyers at that bracket would now be larger? And that gradually that „wealth“ could start to spread around the UK a bit more? Perhaps they did and it hasn’t happened as predicted?

I live about 10 miles from Manchester.
the houses in my local area in that price range are owned by local business owners and minor celebrities

I love London so we’re content
I’ve noticed flats in London don’t increase as much as houses here do

You buy an 800K house by selling a 400K house a tiny or no remaining mortgage and a new 400K mortgage. You bough the 400K house by selling a 200K house with little remaining mortgage and a new 200K mortgage. You bough the 200K house as a FTB with a 10% deposit and over paid like mad.
Or at least that's how we did it. Each step was about 7-10 years. Numbers scaled to your 800K, you can add more steps if you like.

Nobody buys houses like that with a 10-20% deposit and the rest from the bank, it takes patience for normal 'professional' people

I guess this is where getting on the market early is a benefit but many can’t afford to do that anymore. I was 35 when I bought my first house (alone) as I had a career in academia - so 7 years at uni, then a few years abroad (and not on a good salary), then back to the uk where I saved like mad. A lot of my friends have had long periods of studying as well, so it takes a while to get that first deposit.

I live on a very nice street, my house is the smallest and cheapest, and all the nice houses are owned by those in the building trade, or the film industry.

Not that I mind, I made my life and career choices and wouldn’t change any of it. But it hasn’t made me much money.

'Or at least that's how we did it'
Er. How long ago was that? It doesn't work like that any more. FTB are much older (mid 30s on average) as they can't afford to buy earlier and mortgage terms are much longer, often 30 or even 35 years. Also, SDLT costs are now crazy so that reduced mobility now. Your method was dead easy going back a few decades but things are completely different now unless you get a nice inheritance or major pay rises.

A friend of mine has just made the last of those steps after a similar journey. There are a few people at work, early 20's who are one step 1 on normal early years salaries. The early 20's have made sacrifices and put in some elbow grease compared to their peers, but that was always the case.
I believe it is still possible today, if you want it to be

Are you joking re Uni Profs? Wages are poor compared to the private sector!

So yes, you and your friend bought many years ago, as I said.
Since when have things been possible because you want them to be?! Things are clearly not going to work out the same for your colleagues in their early 20s who have bought recently as they did for the boomer generation, certainly not in real terms. The maths simply doesn't add up and nor do things in the financial system nor the demographics.

If you think it 'doesn't add up' I'm sure you will find it very easy to prove to yourself and will tell anyone who will listen.

What do you know about my friends that allows to to say 'Things are clearly not going to work out the same'? How do you know so much about them and their personal situation, values and priorities?

I think the problem is it’s possible these days…. If you have help.

for example, If a person has to rent from the age of 18 or even 21 post uni their rental costs will be astronomical and no chance of saving for a deposit - even if they rented a room as cheap as possible it’s still a huge cost. That is outside of their control and no reflection of them as a person or how hard they work.

That’s the biggest differentiator I think - someone in that position could only get on the ladder if they were gifted a deposit or if they could stay at their parents home rent free to save for a deposit.

Not everyone will have chance to be gifted a deposit or stay at their parents home to save. Life isn’t that simple.

@rainingsnoring

You only need to look at house prices relative to salaries to see that the figures no longer add up. Lots of people have pointed this out on this thread. When you factor in the fact that most families now need two salaries, often incurring extremely expensive childcare costs too, you can see more evidence that the figures don't work.

It's not a question of knowing your young colleagues's personal situations or values. If their personal situation happens to be that they inherited or were gifted £££, have lived rent free with their parents and saved up for 10 years or they have a salary in the top 1% or something, they are not representative of the majority of the population. What I also meant was that the boomer generation have benefited hugely from the great rise in house prices relative to incomes. This isn't going to happen for these young people, indeed the opposite may happen.

I do mean actual profs, not lecturers and I was thinking more towards the higher end of the spectrum. As far as I am aware the prof salary scale at our local uni starts at around £80,000. So heads of school, provost's etc will be on loads more.

I know a couple who are a doctor and civil servant and bought a new build on a similar area to you for 700k. That doesn’t seem unusual. You can’t get anything in the nice parts of Manchester for under 500k

There are a growing number of people in the North earning London salaries who would have no problem affording houses like these and much more expensive ones. I imagine they're living all around you but you have no idea!

I think some of the estate agents in the North haven't caught on that the covid price spike is over. I have relatives trying to sell an ordinary 4 bed detached for what seems a ridiculous price (and the market evidently agrees as it's been on for nearly a year). They're asking 200k more than they paid for it in 2021, and the EA apparently thinks this is reasonable. I think they're all bananas.

@TheOtherAgentJohnson houses in my area of Manchester still sell within a couple of weeks for a lot more than in 2021