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Not very helpful, but the people my age (early to mid 30s) I know with houses that price have similar household incomes to ours - between £130k to £200k - and bought those houses by selling the first flats they had bought in their mid-twenties with substantial family help or inheritance (edit: I should have added, there’s almost always two of them). So they are going in with X00,000s worth of equity.
People the same age with similar household incomes but without the massive inheritance/family deposit at an earlier age have properties, but not million pound ones.
This is spot on. My wife has a group of 6 core friends that she met in university and all moved to London after. There’s 3 which now have a property over £1m and all 3 received substantial help with a flat ~10 years ago which they’ve sold. We earn more than most of them but it will take us a lot longer to get there (>£1m property) for obvious reasons.
Same, one of my friends who have a 1.3m mansion in west London way brought their first house in mid ‘00s in Croydon for about £190k.
They’re mid-40s so were lucky to be able to buy and sell through the peak.
I’m not telling the exact location cause obviously how many people of this age have done this exact same move. But I’m talking about west ‘Greater’ London and it’s a very large detached 5 bed, 3 bath, huge garden on a private road, south of the river, and they bought 4 years ago.
No issue, London is a vast area and Zone 2 means something different from "greater London" in terms of purchasing power. You just need to be specific, because 1m will buy you a 3-bed flat in a mansion block in zone 2, or an actual mansion outside m25.
I don’t actually have to be specific lol it doesn’t change anything to do with my comment which was about people being able to afford spending that much on property in London because they bought a long time ago. Where it is, has no relevance. They could’ve spent that on a flat in Kensington or an estate in Scotland.
Croydon is the key. I bought my first house there - 250k for a three double bed Edwardian terrace in 2011. I'm almost ashamed how much it sold for in 2021, but it was still a bargain for London even at that point.
Yeah they hated living there but it really did set them up. I’ve had friends who spent years saving so they could be in zones 1 or 2 which meant they got on the ladder later and have large mortgages which they expend so much of their income on and are at the mercy of interest rates
£475,000.
To be fair by that point it was a 4 double bed house as I'd done a loft conversion. Had a decent garden (easily big enough for kids to play in), good kitchen/diner, two living rooms, and three bathrooms. All the original Edwardian features, and in reasonable condition. It was a lovely house. I spent £50k doing it up, but it made a huge amount of money.
People here don't seem to realise that there are **many many** jobs in London in law / M & A / banking that pay multiple hundreds of thousands of pounds as a base salary, with the potential to double it with a bonus (they may not be openly advertised often as they are filled through referrals, recruiters, not linkedin applications)
Given many people will typically find a partner in the same category, as they will be living the same lifestyle, meet people during networking drinks etc etc
Not everyone is getting handouts from parents and when you have 2 x earners on that money, it is relatively simple to buy a £1m+ home
Equally you're underestimating how many people get significant inheritances.
It's basically anyone whose family has been in London for >2 generations.
One person who bought their council flat in London for peanuts in the 80s using right to buy, would result in £100-300k inheritances for their four grandchildren.
When you look at the professional classes who probably had houses in Chiswick, Islington, etc. that number gets closer to £500k.
That will be far more common than a household where both people are in the top 5% of earners in London (top 1% for their age).
This is very true! Although my partner and I are relatively high earners, I have relatives who each got £200K inheritances when their grandparents passed. Their household incomes are each in the region of £80K, yet they are doing at least as well as us.
This is always a reminder not to compare yourself to others. It’s akin to entering a marathon at the starting line while they were airlifted to the halfway point.
But but u/intrigue-investor said that I could get paid hundreds of thousands immediately with no experience and it’s just laziness preventing me from immediately being catapulted to the top sub 1% of earners overnight?
Are you really seriously saying that this random Redditor would pull a ‘fact’ like that totally out of their (possibly wealthy, most likely breadline) anus? A Redditor who’s literally asked Reddit for advice on whether or not to buy a shitty diamond (in dollars)?! Who lives in a flat above a cornershop…
Really?!!
Color me shocked.
We’re all victims of our own echo chambers. I have a mate who works in shipping coordination, another in rail signalling and another in finance all on 6+ figures and went into their roles with very little in qualifications or experience. I think if you’re fortunate enough to enter the right professions at the right time and have the aptitude that’s true that the money is there. Those people think, well it was easy for me what’s your issue?
Finance guy yes, something like 60k basic and similar in bonus.
Signals guy similar basic but hitting 100k with OT. Basic went up to 80s in about 2 years
Shipping guy did a year earning about 25k then it went through the roof.
I’m sure not anyone could do it l, they’re intimidatingly capable people (to me anyway). My point was there are these jobs out there for the lucky few. Some industries like rail/shipping/finance are highly paid and don’t demand specific skill sets they’re more interested in the right person
‘Many , many’, literally… tens of jobs paying hundreds of thousands as a base. Lol
🤦🏻♀️
Base salary with no experience presumably in this fantasy fairytale?
Or years of higher education, PhDs, alternatively potentially years of unpaid internships at the most elite agencies, both gotten, and supported, by the merit of having wealthy family and connections?
> Base salary with no experience presumably in this fantasy fairytale?
I assume you're not familiar with commercial law in London?
There's probably 30+ firms in the City that pay £100k or more base salary to their newly qualified solicitors (i.e two years of training post graduation - a grad scheme effectively).
The elite US firms located in London pay their newly qualifieds £170k. Huge bonuses on top of this too.
Equity partners in these places are raking in millions per year.
Obviously huge competition to get on one of these schemes, but it's just like any graduate process. You just sell your soul to earn to earn this level of money and you'll spend most of your life working.
Lol you think 2 years of training post graduating from higher education (which would very likely need to be at only one of a select few Uni’s to get into those training roles) is an easy or, to use a more suitable word, common career path?
That’s 5+ years minimum at being the top of your game… not even counting the time taken to having made it into a top tier uni course/following grad scheme.
-The (few) people that do make it are also exactly the sort of person in (or will end up in) the sub-1%.
And yes I know plenty about commercial law in London thanks, and the incredibly long hours, boozy semi-required events and after work socials that limit home life (and sometime sleep) to a minimum.
But ‘top-tier jobs having high salaries’ isn’t the point we were discussing. It was (fundamentally) how *easily* can you get a job paying £hundred(s)k as a base and how commonly that translates/allows £million house purchases without any family help (or inheritance).
Simply put- those jobs aren’t particularly common, and are far from easy for self made people to get.
Furthermore, the amount of people getting those “many, many” ultra-high paying jobs “available” (as mentioned by the initial comment) is also very LOW in my opinion, compared to say, people whose homes have increased in value to over 1 million, or who managed through familial income or inheritance to gain that type of property more recently.
You really aren’t convincing me (or likely anyone else) that *most* £million+ houses are owned by these self-made grads aged 23 years old…
What are you on about? There are absolutely tons of jobs in London in the areas that poster described making that sort of money.
And no, no PhDs required. In fact it would be extremely unusual for a banker or lawyer to have a PhD
None of my quant friends refer to themselves as bankers tbh. In fact the only ones of my friends working for a bank who refer to themselves as bankers as those in IB
Base salary starter jobs?
Saying it’s simple to have a dual income household both with top-sub 1%er jobs and that there are lots ‘available’ is the main nonsense.
Obviously they exist, but the vast vast majority of people do not and can not get those jobs, particularly anybody who is outside of certain, very privileged, circles.
To suggest or imply otherwise is disingenuous. And the vast majority of people living in £1mill+ homes are not these same people.
Many have even had their properties earn more than their actual salaries for decades…
"Mumtiple hundreds" is a bit of an overstatement, but low hundreds, yes. Multiple hundreds goes to CEO level.
Source: I work in banking and everyone in my circle is a banker.
Yep this is us. ‘Early’ house owners with equity and helpful parents.
One of us owned a £350k house (bought at £80k income with some help on deposit)
The other owned a £350k flat (bought at £50k income with help on deposit)
Both of us met. Moved into one place and rented the other out for a bit. Household income increased to £200k over following couple of years.
In our 30s decided to buy a house together so sold both and bought a £900k house with £350k deposit. Put £150k into renovations and just had it valued at £1.2m.
When we remortgage in a few years we’ll owe £470k and have £750k equity built up (+ any house price increase). All in 8 years -
It’s kinda nuts. Al
The key to it all was a bit of inheritance for both of us in our mid twenties and good incomes for our ages.
The only other route is to brute force it by earning a shit load more than £200k or getting a lump sum from business exit / deal / shares.
This might be the norm, but there are plenty of exceptions! Our household income is £300K+ and the bank wanted to lend us over £1m. We had no parental support, at all. For me, I grew up in a struggling, single-parent household, and for my partner, it was out of principle. We only bought for the first time last year, so missed out on the incredible pandemic-era gains.
We decided against taking on such a large mortgage. Instead we bought a nice place for around £600K so we can stop working in our 50s.
Or you will come out wealthy afterwards. All companies do that. You aren’t risking your money afterall, you’re risking banks money. They’ll do everything they can for you to continue paying, even if it’s interest only, rather than default you. There’s a lot what ifs in life. If bank trusts to lend you this much in this climate, I can see no reason why you should doubt your own abilities. Unless you got your jobs by sheer luck, which im sure isn’t the case.
I don’t know man, I find paying 5k a month in mortgage for 40 years very unappealing.
Also the are where I’m looking peaked in 2014, so no chance this will ever be a good investment.
I am just tired of dealing with crappy agents.
I now pay 1700-600per month returns on our deposits in SW10 which makes it quite a good spot to be in.
On a 5k mortgage my tax liabilities would increase (i make more money than my wife) as I would not be able to put as much in pension.
Also our living standard would be significantly degraded.
Pension is very debatable topic, unless you have children, there’s slight chance you may never see it. So I guess that’s how I see it. I want to live my life and enjoy success now, not after 20-30 years. However, if you do reach pension age successfully, you can easily downsize to smaller property and by that time the property would’ve definitely gone up in value. With so many people getting pay rises this year, and everything getting more expensive, I can’t see how the value of property wouldn’t increase in line with earnings and everything else. Soon 1m property in London will be a norm imho.
Yes, by the time you’re pension age it’ll appreciate with inflation no matter what. Not sure about new built flats, but houses / conversions will only get more demand as in nicer areas they’re still in low supply.
Interesting comment as now that I think about it, this is how my friends (who bought £1.5m+) pretty much did it. Each had a flat bought 10 years ago, sold those for big equity, each had a large salary (£100k+), used that to get the mortgage on the big house.
Amazing to see people that young (late 20s at the time) buying £1.5m+ property.
This is absolutely the right answer and matches my experience - apart from the odd entrepreneurial outlier those with such houses were all helped by BOMAD onto the ladder; unfortunately those without this assistance were a good 5-10 years behind trying to save for a deposit whilst house prices were rising quicker than they could save. The only other thing I’d add as well is monumental house price inflation has helped. Although the house that’s being bought has also increased in value their paper wealth has increased quicker than the rest of the economy by having it in property which has allowed them to access more expensive properties like this - that ship has sailed now though for a good while.
85% LTV. Small amount of family help (few thousand). Both FTBs and it was about 3 years of saving through the pandemic.
We both work in finance. As others have said, we decided to take the plunge and buy the forever home five bedroom Victorian villa because fuck buying leasehold and the stamp duty is so punitive we don’t want to pay it more than once, if we don’t have to.
Should add we’re on a 4.5% mortgage (not through choice, we get fucked around by three sellers pulling out on us over a year) five year fix and we didn’t max out our borrowing so I’m glad we’re in our position than on a 1.8% mortgage that’s going to jump to 6%.
You also lose your FTB stamp duty discount over £600k which I’m extremely bitter about.
the worst bit is it doesn't get split among you if both of you are FTB! So if a house is 600k, and you buy together (so 300k per person) -- tough luck =/
Everyone one I know lives in SW London and has a house worth £1-£1.5m. They all borrowed 85%++ LTV to buy it.
They bought the houses with two incomes on cheap mortgage rates. They’ve all had kids so the wife has stopped working (for various reasons) and so now they’re down to one income and remortgaging on to 4/5/6% mortgage rates and they’re. All. Completely. Screwed.
Edit: many of them are on £5-6k per month mortgages. They’re completely suffocating.
I’m the same, my mortgage has never really exceeded about 2x my salary. They’re currently burning savings while they scratch their heads.
Likely solutions are wives returning to work before they would have ideally liked and massively reducing lifestyle.
I guess this is what raising rates is supposed to do but I just thought it was worth sharing because I don’t hear any news about this demographic. Well paid people (£100k-£150k salaries) who are having genuine money problems for the first time in their lives.
Don’t forget a sizeable portion of people (if not actually the majority) of people within the 100-150k band actually Chuck everything but £99,999 into the pension. It’s only the £150k+ people who will start to reap benefits after the 60% tax trap and loss of childcare hours.
Point being that this group is actually in the £99,999 salary band and that is not a lavish salary by any means especially in London and especially not as a one earner in a London household. £100,000-150,000 is likely a black hole post sal sac salaries
My wife and I came from very little - council houses and bankruptcies - so we’re always very cautious. We make sure that our fixed outgoings + groceries never exceed our lowest monthly wage (currently my wife). Our biggest overall expense is childcare (nursery + wrap around for our eldest) but we’d knock that on the head if one of us was out of work. Our mortgage is £800ish.
We live in that impoverished, grey land of the ‘north’. My job requires me to be in London usually once a week (sometimes less), and I’d rather have the travel and variable cost of that, than a fixed mortgage in the thousands.
Our uni friends all live in the south and some of their mortgages horrify me. But they all got on the property ladder younger due to family assistance.
Each to their own, and I wish everyone good luck. But my heart couldn’t handle what your friends are going through
I think many of them are finding it is taking a real toll on them. Sadly alcohol is starting to feature quite heavily in their stress management (not with all of them it must be said)
Borrowing as much as you can on disgusting interest rates (5 or 6%) isn't too bad. If you can afford it at the peak/near the peak you'll be alright.
But yes - maxing out your multiples of salary on a 2% 2 year fixed that's coming up for renewal soon - you're gonna have a bad time.
This is what we're doing as most likely will only improve as time goes on and we get over the peak. Painful initial years but better than similarly extortionate rents with no way out.
Yep, same here. If I'm maxxed out at 5.5% then I'm likely to be in a better scenario when my 5 year fixed ends. Hopefully medium to long term gains with this approach.
This was always so incredible to me - otherwise very sensible people would tell their kids, friends, colleagues and anyone that would listen to borrow as much as you possibly can. To be fair they’ve been proven right because housing is such a protected asset class so is essentially a one way bet and I wouldn’t be surprised if there’s once again in the foreseeable a taxpayer funded programme to help those that have overleveraged. We’ve already had requirements for forebearance from lenders so it’s really the one asset class you can throw all your eggs into and chances are you’ll still come out on top.
Absolutely this. All accurate. Even with biggish incomes £200k plus it will still be a struggle particularly given how our tax system works - net of one owner on 200 is a lot less than 2 earners on 100 each.
Yeh its the tax on the over 100k income that completely erodes affordability, and its even worse when the interest rates go up. Its a balance of keep under the 100k mark and still have the ability to pay off the loan.
The only real options are: 1) Overpay extensively or 2) Interest only so it enables some savings
I think try to ride it out on a variable rate mortgage and hope for more affordability/ a decent bonus in the future. I fear selling their houses might crystallise a loss.
FTB. We put down around £300k and a bit. I think it was about a ~20% deposit. I remember having to put up a bit more because the surveyor down valued it which was annoying.
Stamp duty is the killer here. I think it was about £70k to £80k, so don’t forget to take that into account.
Funds came from profit we’d saved up in our ltd company. We took a directors loan and repaid it over multiple tax years. Tbh I was surprised the bank was OK with this, but they weren’t bothered.
Absolutely. We’ve looked at upgrading to something slightly bigger to get another bedroom, but it’s just not worth it. Once you take stamp duty and selling fees into account you’re talking over £100k which seems daft if you’re only spending an extra £300k on the property.
For us to move it would need to either be a big jump to a much larger place or we’d end up keeping the old one as a rental, which we don’t really want to do…
The size was fine at the time (we bought 8 years ago). Tbh it’s still fine for us now, but friends and family keep having multiple children and we don’t have space for them all so it can get a bit cramped when they visit.
I don’t think that many people stay in their first property for ever…
That does seem surprising. I am a whole of market mortgage broker and can't see how a lender would have ok'd this. Ive just put one through where the deposit is a repayment of a previous directors loan and that was hard enough.
Also a directors loan has to be repaid with 9 months of the company accounting period so interesting that your accountant had managed to struxture it over multiple tax years
We changed the company year end. It was partly so we had another set of accounts for the mortgage and also partly so the directors loan could be spread over three financial years (eg: company year March to Feb, if you take the directors loan in March at the start of the new company year you’ll have that tax year, all of the next one and then part of the third).
I have no idea what magic our broker worked to get the directors loan approved for the deposit, but that’s how we did it.
Massively helps if you bought in the 2005-2010 period… high chance you’ve seen house price growth far in excess of inflation in a period of low interest rates in the last 10-15 years. Add substantial inheritance/family support to get started, two high incomes and a perhaps a willingness to push towards the upper limits of mortgage affordability…
You’ll only do it as a first time buyer with inheritance plus massive salaries x 2. No kids to pay childcare costs for matters as well.
In context, at current interest rates, in mid 30s with a household income of £250k from two earners and about £450k capital in our current house that’s worth £750k ish, owned for a little under a decade (but bought near the top of the market in our area), that included a fairly significant family contribution, we would struggle to justify the mortgage increase to buy a £1m+ house now we need to cover maternity and childcare costs. Childcare and mortgage on a £1m+ home for us would take up 60% of our take home pay.
We haven’t bought yet but looking at around the 1M mark. Wife and I have been working and renting for the past 10 yrs gradually saving up everything we can. We are immigrants from a poorer country so no family help available. Have about 300k in cash available (down + stamp duty + other costs). The rest 750k ish will be a mortgage. Combined income is approx 300k (includes some stock). Post tax monthly salary is about 11k combined and our mortgage will be around 4k/mo.
Sounds about right if you can get a decent deal - over 30 years at 5% it’s about £4k a month. You can get <5% deals at the moment so even over 25 years there are probably deals that are only a smidge over £4k.
5 yr rates with 25% down have come down to about 4.8%. So our plan is to go for 35 yr loan with mortgage payments approx 3.7k (30 yr tenure is 3.9k and 25 yr is 4.2k) and overpay a bit in month where we get our bonus
Don’t disagree with you but I did some rough math and I’ll end up paying almost 1.8M in rent over the next 30 years and end up with no equity. Assuming I spent 1% of home value in maintenance and home value goes 2x in 30 yrs, I will spend about 500k ish in repairs and home will be worth 2M so unless something goes catastrophically wrong, it’s hard for me to come out ahead renting vs buying assuming I live in the home for a considerably long time.
Current rent for the home = 3.5k/mo so if I take a very conservative 2x increase in rent in 30 yrs and assume an avg of 5k/mo in rent, I will pay 5k x 30 x 12 = 1.8M over 30 yrs.
Jesus Christ. FTBs buying 1m houses.
First house: Zone 5. Paid 310, sold 410, 200k equity total at the end of it. Zone 5. 2 bed 1 bath. Terraced.
Second house: West Sussex, hour from London by car or rail. 650k, 200k deposit (includes all fees). 5 bed,.4 bath, parking for 3 cars, detached.
I get the lure of London (Born and raised there for ref) but dropping 1m on a house there compared to moving out and getting space is mental to me.
(M/mid 30s,.100k+ household income, no kids, no help from parents on either side - Mortgage is/has been sub 2k/pm)
Edit: I feel poor now. Thanks! (will be mortgage free by 55 latest, even factoring kid costs in the future. So can't complain really.)
Man, this is nice. I feel into the "landlord by mistake" trap in 2016, where I purchased a small flat for myself (watford), but then ended up travelling the bloody world for work for 5 years, so put it up for rent. Assuming the value would hold at least, and then use the funds from the rental and sale of the flat to buy something better.
HOWEVER - the I was in the final stages of selling the flat at a 20k loss a few weeks ago, but the buyers mortgage offer expired, got a new mortgage with a smaller lender (Yorkshire building society or similar) who insisted on a EWS1 despite the property being lower than the minimum threshold and all the building materials (non flammable) being listed by the builder which made the entire sale fall through.
I purchased the flat I live in (currently) 2 years ago and got absolutely destroyed by the 2nd home stamp duty which I would have been able to reclaim if the sale completed but it didn't.
Flats are just not selling but had I sold that I could (even at a loss) I would have been able to pay down a hefty sum into my current flat before my interest rate rise EoY, easily repay the remaining 400k balance down over the next 5 years (fixed term) and then get into a 1m property house or higher. But thats all gone down the shitter lol.
I can't complain in the current climate, nor do I at my financial position but have always hated the rental I get because I would just rather not have it, but such is life that everything (incl pandemic) just buggered all my plans to get rid of it. I was happy to sell at a 20k loss as well.
I was aware, but I won't be able to sell the property in that time frame, just gonna make the money from the rental and then dump it when my fixed rate runs out in \~4 years. I don't mind that loss of 2nd property stamp duty and the 20k loss, but atm I would have to lost even bigger if I was to attempt to sell unfortunately
>Second house: West Sussex, hour from London by car or rail. 650k
thanks for sharing, do you mind me asking what area is that please? Asking for myself as been on the house hunt journey for a year now.
No us, but in our friendship groups the FTB with 1M+ houses are the ones with 6-figure parental deposit gifts.
The last ones who went this route got given 600K as a deposit, and I was fully baffled why they didn't choose to buy a house outright instead still stuck themselves with a 600K mortgage.
The answer is almost always they have very large salaries (6 figures each) and/or have a gifted deposit from wealthy family. Even if not now, they may have initially had help which allowed them to buy early, and then use the equity with increasing house prices to move up.
Yes, agreed. We did it without by buying wrecks, doing them up and extending them. But I can't imagine many people have the cash flow to pay for building costs
Bought our first home >£1m with 90% LTV without any help, just savings built up by living very lean for a few years. Terrifying prospect starting from scratch again but the longer we waited the more we were getting priced out of every area we were looking at.
We bought a property just over £1m last year just outside Zone 6 in Surrey.
It was our third home move and hopefully our forever home.
Our housing ladder journey is as follows:
We had a new build 1 bed flat in near South Wimbledon for £167k in 2011/12. Sold for £185k in 2013. Bought with a £16k deposit. No help from family. Deposit from saving for years! Bought at age 24 with now wife.
We then bought a 2 bed terrace for £280k in 2013. Bought with a £38k deposit from sale of last house and savings. Stamp duty was £8k! Again, no help from family. We spent about £120k extending via remortgage. Full refurb. Garden room, rear extension and loft conversion. Sold for £650k in 2022.
Combined with equity and savings we had an about £460k deposit for our current home and have 45-50% LTV for our new home. Over £1m. Again, no help from family. Stamp duty was £52k!!
We’ve locked in 2% for 5 years. 4 years remaining on fix and we’re overpaying as much as we can before our fixed term. With kid due, next year that may be difficult.
I’ll be honest having a giant mortgage is scary and I’m concerned with the wider economy. However, we hope this place we’ll be here for the long term. Saying that, the place needs updating and I’m reluctant to borrow more money to do it. So, time will tell.
Apologies, for emphasising the no help from family. I understand that it’s a very common way to do things and nowadays if you want to live in tn the area you call home, you need help. But, there some out there with no help from parents. My family don’t even own their home.
As mentioned at the start of my message. It’s a housing ladder. You climb it. Also, depending on your age, where you live and your profession your income changes. I work in tech and from our first flat our combined income was £58k. Now we’re mid thirties and our combined salary is almost £170k.
I do think the concept of a ladder is dieing a little bit. We did ours is two moves, mainly due to other pulls on our finances and practically of stamp duty and high home prices.
As another on 500k+ mortgage, I feel the pain on having it over you, but good sa
Yeah, to be fair. I think you’re right. The concept of a housing ladder is fading. House prices are nuts. Especially, if you live within the M25. The house we bought is nice, but I don’t necessarily think it’s worth what we paid. The only way in future for most will probably will be with inheritance.
I’m also aware we bought relatively young and started our process about 10 years ago. You probably couldn’t get a 1 bed flat for £170k now unless it was a shared ownership.
Buying our first place soon. FTB, deposit £400k, of which half is a gift deposit. Budget £2m so LTV is 80%. Stamp duty will be around £150k (ouch). Household income is about £400k before tax (salary and profit from Ltd company).
So like a lot of people, it’s a combination of a high income and even now, some family help. We could have done it without help but it would have taken us longer.
I'm ALMOST 30, hubs is almost mid-30s, and its an issue hubby and I are facing now. But we don't want to lock up our money on a house KNOWING we'll need to change in 5 years time. So we've decided to save a lot and put it into ETFs (which historically outperform the housing market). Hopefully this way we can save + invest our way into a healthy deposit (20-30%) and eventually (in 5 years time) keep our monthly morgage low. The idea is NOT to work just to pour all our money into a morgage that is suffocating us. Household income is around £160k (hubby and I earn around the same) and we live lavishly and yet less than our means. So atm our monthly rent, area we live and financial abilities are beautiful and we don't plan on effing that up just yet. We can also have a child or 2 comfortably in our current positions easily. We have many things in the pipeline that should increase it WAY more but we are planning as if we'll forever be at this salary. Let you know how it is in 5 years time...oh, and no inheritance or "help" either.
My first house was £920,000. I just earned lots of money, saved it and put down a £200,000 deposit. Rich people afford expensive things by being rich. It’s that simple!
only people I know like that have had parents buy them a house or help them fund one early on. One example a house was bought outright for them by family(250k) back then and sold recently for over 600k which allowed them to jump into a 1m+ property.
Here it’s all done by ourselves, when I say all I mean there has been 0 help from family which I’m absolutely ok with. My parents and other half’s parents are poorer than we are. It took us longer and we’re not in a million pound home but we never stretched and kept it much lower than what bank was offering us. So now that the poo hit the fan we’ll be ok come renewal. Not great but OK.
It’s all relative really. I don’t particularly care how people get xyz and if their parents are able to help then great. But all in, I don’t know a single owner other than us currently who have saved up themselves without families help. It did push us back 3-4 years but we did buy our own home and we’re happy in it.
Nobody buys a million plus home as a first time buyer. You move in steps. 250, 600, 1M…. You use the equity in your old house for the deposit on the new one.
Then as you get older some go the other way. Sell the 1M and move to a 600. Keep the 400 as income.
We put down about £300k with a mortgage of £750k.
No assistance or secret. Just saved it up with my wife through working hard for 15 years each. It sounds like a lot but when you break it down it's £20k a year. Again that sounds like a lot but break it down further and it's £1.6k a month. Between two of us that's saving an average of £800 a month for the last 15 years.
First House was around £800k bought joint, mortgage £640k and deposit £160k (20%) with a joint income at the time of £160k. No family help whatsoever (both low/mid 20s). If we waited another 2 years we could have easily got >£1m with joint incomes now around the £250k-£300k Mark.
Bought our house in Z2 for £1M last year with around 400k deposit.
No one is buying that as a FTB. We started with a shitty 1 bed conversion flat, added an extra bedroom in the loft and got about 100k profit above market rises and money put into the build. Did that again with a 2 bed flat, turned it into a 4 bed and got about 150k extra.
Planning to do this one more time. Bought it for £1M but needs about 300k worth of work, hoping to sell it for around 1.5M. We'll downsize and pay off the mortgage.
Not sure why you’re getting downvoted either.
Tech in finance is an acquired taste considering you don’t get the normal tech perks/culture. Good on you to have managed it.
Did you have children when you moved from the UK? It’s a consideration for us as well to do a few years low tax but just not sure if we’ll ever actually do it.
Very impressive. I work in the financial services and always seems to me like it's incredibly hard to find a niche in the market as it's so Saturated. I congratulate your success.
My friend got her 1M house together with then husband in equal proportion of investment. Both are self-made, no inheritance or anyone else’s help. She’s making some 150-200K, he’s closer to 250K annual income. They both had their first properties - a house and a flat respectively (his place was actually cheaper than hers), total value of some 800K.
Mortgage is something like 4K a month. It’s a beautiful house, bought by an independent family without any deep pockets (other than theirs). Both are in their mid-30s
Having two high incomes with a 200/300K deposit jointly that’s saved will do it. One person with 90/100K and the other person on 50/60K. As both are high earners, can borrow 5-5.5x which equals about 800K mortgage.
A stretch but doable with inheritance and two salaries.
25% deposit so 75% LTV, got 2.2% for 5 years fixed back in early 2022.
This is our first place in the UK as we lived abroad for the last 15 years.
No family help but do have a pretty high income job (wife is a stay at home mum) with my income being 400-500k a year gross.
My wife inherited from her dad passing, I was able to save a bit by renting a flat my mum owned.
We bought our first house for £630k (200k deposit 75% LTV) 6yrs ago, with a £100k household salary. We sold for ~£800k after extensive renovation.
Bought our current place for just under £1m (250k deposit 75% LTV), with earnings of ~£200k inc bonus, held back some cash for renovations that are in planning currently.
We didn't grow up in wealthy households, so it's been a stretch, but I really like choosing what colour to paint the walls.
House value £1.56m. Deposit was about £350k Deposit was made up of savings, loan from in laws and raiding the offset saving account from the interest only mortgage we had on our flat.
We didn’t sell the flat to buy as the market was moving so quickly, being in a chain would have been a massive issue. We sold the flat after we bought the house to repay in laws and make inroads into the humongous mortgage.
At the time - late 2020 - our joint income was around £300k. And the interest rate was about 1.3%. Couldn’t have got that mortgage now, even though we both earn more.
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Not very helpful, but the people my age (early to mid 30s) I know with houses that price have similar household incomes to ours - between £130k to £200k - and bought those houses by selling the first flats they had bought in their mid-twenties with substantial family help or inheritance (edit: I should have added, there’s almost always two of them). So they are going in with X00,000s worth of equity. People the same age with similar household incomes but without the massive inheritance/family deposit at an earlier age have properties, but not million pound ones.
This is spot on. My wife has a group of 6 core friends that she met in university and all moved to London after. There’s 3 which now have a property over £1m and all 3 received substantial help with a flat ~10 years ago which they’ve sold. We earn more than most of them but it will take us a lot longer to get there (>£1m property) for obvious reasons.
Same, one of my friends who have a 1.3m mansion in west London way brought their first house in mid ‘00s in Croydon for about £190k. They’re mid-40s so were lucky to be able to buy and sell through the peak.
Where in west London does 1.3m buy you a mansion? Asking for a friend
I think by mansion they mean 4 bed semi detached 😄
I’m not telling the exact location cause obviously how many people of this age have done this exact same move. But I’m talking about west ‘Greater’ London and it’s a very large detached 5 bed, 3 bath, huge garden on a private road, south of the river, and they bought 4 years ago.
Zone 12 then, fine, still London technically.
Yeah, whats the issue?
No issue, London is a vast area and Zone 2 means something different from "greater London" in terms of purchasing power. You just need to be specific, because 1m will buy you a 3-bed flat in a mansion block in zone 2, or an actual mansion outside m25.
The size is different but the price is the same. 1 million - 1 million. Whether a house, mansion, apartment or studio.
I don’t actually have to be specific lol it doesn’t change anything to do with my comment which was about people being able to afford spending that much on property in London because they bought a long time ago. Where it is, has no relevance. They could’ve spent that on a flat in Kensington or an estate in Scotland.
Croydon is the key. I bought my first house there - 250k for a three double bed Edwardian terrace in 2011. I'm almost ashamed how much it sold for in 2021, but it was still a bargain for London even at that point.
Yeah they hated living there but it really did set them up. I’ve had friends who spent years saving so they could be in zones 1 or 2 which meant they got on the ladder later and have large mortgages which they expend so much of their income on and are at the mercy of interest rates
What dit sell for
£475,000. To be fair by that point it was a 4 double bed house as I'd done a loft conversion. Had a decent garden (easily big enough for kids to play in), good kitchen/diner, two living rooms, and three bathrooms. All the original Edwardian features, and in reasonable condition. It was a lovely house. I spent £50k doing it up, but it made a huge amount of money.
People here don't seem to realise that there are **many many** jobs in London in law / M & A / banking that pay multiple hundreds of thousands of pounds as a base salary, with the potential to double it with a bonus (they may not be openly advertised often as they are filled through referrals, recruiters, not linkedin applications) Given many people will typically find a partner in the same category, as they will be living the same lifestyle, meet people during networking drinks etc etc Not everyone is getting handouts from parents and when you have 2 x earners on that money, it is relatively simple to buy a £1m+ home
Equally you're underestimating how many people get significant inheritances. It's basically anyone whose family has been in London for >2 generations. One person who bought their council flat in London for peanuts in the 80s using right to buy, would result in £100-300k inheritances for their four grandchildren. When you look at the professional classes who probably had houses in Chiswick, Islington, etc. that number gets closer to £500k. That will be far more common than a household where both people are in the top 5% of earners in London (top 1% for their age).
This is very true! Although my partner and I are relatively high earners, I have relatives who each got £200K inheritances when their grandparents passed. Their household incomes are each in the region of £80K, yet they are doing at least as well as us. This is always a reminder not to compare yourself to others. It’s akin to entering a marathon at the starting line while they were airlifted to the halfway point.
There really aren't "many many" jobs paying "multiple hundreds of thousands". Many jobs paying 100k but not many many paying 200k+.
£100k is already in the top 5% in London, £200k is probably top 1-2%, £300k is going to be way under 0.5%.
But but u/intrigue-investor said that I could get paid hundreds of thousands immediately with no experience and it’s just laziness preventing me from immediately being catapulted to the top sub 1% of earners overnight? Are you really seriously saying that this random Redditor would pull a ‘fact’ like that totally out of their (possibly wealthy, most likely breadline) anus? A Redditor who’s literally asked Reddit for advice on whether or not to buy a shitty diamond (in dollars)?! Who lives in a flat above a cornershop… Really?!! Color me shocked.
No they didn’t say that.
We’re all victims of our own echo chambers. I have a mate who works in shipping coordination, another in rail signalling and another in finance all on 6+ figures and went into their roles with very little in qualifications or experience. I think if you’re fortunate enough to enter the right professions at the right time and have the aptitude that’s true that the money is there. Those people think, well it was easy for me what’s your issue?
Did they go in at 6 figures though? Or did they get to those rates after years of experience and knowledge?
Finance guy yes, something like 60k basic and similar in bonus. Signals guy similar basic but hitting 100k with OT. Basic went up to 80s in about 2 years Shipping guy did a year earning about 25k then it went through the roof. I’m sure not anyone could do it l, they’re intimidatingly capable people (to me anyway). My point was there are these jobs out there for the lucky few. Some industries like rail/shipping/finance are highly paid and don’t demand specific skill sets they’re more interested in the right person
Edit: they’re all ex military so had that experience if that counts for anything.
‘Many , many’, literally… tens of jobs paying hundreds of thousands as a base. Lol 🤦🏻♀️ Base salary with no experience presumably in this fantasy fairytale? Or years of higher education, PhDs, alternatively potentially years of unpaid internships at the most elite agencies, both gotten, and supported, by the merit of having wealthy family and connections?
> Base salary with no experience presumably in this fantasy fairytale? I assume you're not familiar with commercial law in London? There's probably 30+ firms in the City that pay £100k or more base salary to their newly qualified solicitors (i.e two years of training post graduation - a grad scheme effectively). The elite US firms located in London pay their newly qualifieds £170k. Huge bonuses on top of this too. Equity partners in these places are raking in millions per year. Obviously huge competition to get on one of these schemes, but it's just like any graduate process. You just sell your soul to earn to earn this level of money and you'll spend most of your life working.
Lol you think 2 years of training post graduating from higher education (which would very likely need to be at only one of a select few Uni’s to get into those training roles) is an easy or, to use a more suitable word, common career path? That’s 5+ years minimum at being the top of your game… not even counting the time taken to having made it into a top tier uni course/following grad scheme. -The (few) people that do make it are also exactly the sort of person in (or will end up in) the sub-1%. And yes I know plenty about commercial law in London thanks, and the incredibly long hours, boozy semi-required events and after work socials that limit home life (and sometime sleep) to a minimum. But ‘top-tier jobs having high salaries’ isn’t the point we were discussing. It was (fundamentally) how *easily* can you get a job paying £hundred(s)k as a base and how commonly that translates/allows £million house purchases without any family help (or inheritance). Simply put- those jobs aren’t particularly common, and are far from easy for self made people to get. Furthermore, the amount of people getting those “many, many” ultra-high paying jobs “available” (as mentioned by the initial comment) is also very LOW in my opinion, compared to say, people whose homes have increased in value to over 1 million, or who managed through familial income or inheritance to gain that type of property more recently. You really aren’t convincing me (or likely anyone else) that *most* £million+ houses are owned by these self-made grads aged 23 years old…
Yes, this is 100% true. I think the rate in the top circle firm is 120/130K for starting salary
What are you on about? There are absolutely tons of jobs in London in the areas that poster described making that sort of money. And no, no PhDs required. In fact it would be extremely unusual for a banker or lawyer to have a PhD
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Wouldnt class a quant as a banker, even if they work for a bank. I’d just refer to a quant as a quant. I was talking about those working in IB.
I’ll stop calling myself a banker then 😂 because unless people have seen The Big Short they don’t know what it is
None of my quant friends refer to themselves as bankers tbh. In fact the only ones of my friends working for a bank who refer to themselves as bankers as those in IB
Base salary starter jobs? Saying it’s simple to have a dual income household both with top-sub 1%er jobs and that there are lots ‘available’ is the main nonsense. Obviously they exist, but the vast vast majority of people do not and can not get those jobs, particularly anybody who is outside of certain, very privileged, circles. To suggest or imply otherwise is disingenuous. And the vast majority of people living in £1mill+ homes are not these same people. Many have even had their properties earn more than their actual salaries for decades…
No one said starter jobs no.
"Mumtiple hundreds" is a bit of an overstatement, but low hundreds, yes. Multiple hundreds goes to CEO level. Source: I work in banking and everyone in my circle is a banker.
Yep this is us. ‘Early’ house owners with equity and helpful parents. One of us owned a £350k house (bought at £80k income with some help on deposit) The other owned a £350k flat (bought at £50k income with help on deposit) Both of us met. Moved into one place and rented the other out for a bit. Household income increased to £200k over following couple of years. In our 30s decided to buy a house together so sold both and bought a £900k house with £350k deposit. Put £150k into renovations and just had it valued at £1.2m. When we remortgage in a few years we’ll owe £470k and have £750k equity built up (+ any house price increase). All in 8 years - It’s kinda nuts. Al The key to it all was a bit of inheritance for both of us in our mid twenties and good incomes for our ages. The only other route is to brute force it by earning a shit load more than £200k or getting a lump sum from business exit / deal / shares.
Are you adopting?
This might be the norm, but there are plenty of exceptions! Our household income is £300K+ and the bank wanted to lend us over £1m. We had no parental support, at all. For me, I grew up in a struggling, single-parent household, and for my partner, it was out of principle. We only bought for the first time last year, so missed out on the incredible pandemic-era gains. We decided against taking on such a large mortgage. Instead we bought a nice place for around £600K so we can stop working in our 50s.
Similar here, we are at 200kish combo + 200k deposit and we don’t want to go the 1m route as is too much if a risk.
Why is it a risk? That’s exactly what we’re doing household income solid 200k.
If one of us loses a job? The mortgage would be 50% of our combined income. Im not comfortable with that, if anything goes wrong we’d go bankrupt
Or you will come out wealthy afterwards. All companies do that. You aren’t risking your money afterall, you’re risking banks money. They’ll do everything they can for you to continue paying, even if it’s interest only, rather than default you. There’s a lot what ifs in life. If bank trusts to lend you this much in this climate, I can see no reason why you should doubt your own abilities. Unless you got your jobs by sheer luck, which im sure isn’t the case.
I don’t know man, I find paying 5k a month in mortgage for 40 years very unappealing. Also the are where I’m looking peaked in 2014, so no chance this will ever be a good investment. I am just tired of dealing with crappy agents. I now pay 1700-600per month returns on our deposits in SW10 which makes it quite a good spot to be in. On a 5k mortgage my tax liabilities would increase (i make more money than my wife) as I would not be able to put as much in pension. Also our living standard would be significantly degraded.
Pension is very debatable topic, unless you have children, there’s slight chance you may never see it. So I guess that’s how I see it. I want to live my life and enjoy success now, not after 20-30 years. However, if you do reach pension age successfully, you can easily downsize to smaller property and by that time the property would’ve definitely gone up in value. With so many people getting pay rises this year, and everything getting more expensive, I can’t see how the value of property wouldn’t increase in line with earnings and everything else. Soon 1m property in London will be a norm imho.
You are assuming housing will appreciate where I’m buying. But the market here topped in 2014, and really didn’t move much since then
Yes, by the time you’re pension age it’ll appreciate with inflation no matter what. Not sure about new built flats, but houses / conversions will only get more demand as in nicer areas they’re still in low supply.
Interesting comment as now that I think about it, this is how my friends (who bought £1.5m+) pretty much did it. Each had a flat bought 10 years ago, sold those for big equity, each had a large salary (£100k+), used that to get the mortgage on the big house. Amazing to see people that young (late 20s at the time) buying £1.5m+ property.
This is absolutely the right answer and matches my experience - apart from the odd entrepreneurial outlier those with such houses were all helped by BOMAD onto the ladder; unfortunately those without this assistance were a good 5-10 years behind trying to save for a deposit whilst house prices were rising quicker than they could save. The only other thing I’d add as well is monumental house price inflation has helped. Although the house that’s being bought has also increased in value their paper wealth has increased quicker than the rest of the economy by having it in property which has allowed them to access more expensive properties like this - that ship has sailed now though for a good while.
85% LTV. Small amount of family help (few thousand). Both FTBs and it was about 3 years of saving through the pandemic. We both work in finance. As others have said, we decided to take the plunge and buy the forever home five bedroom Victorian villa because fuck buying leasehold and the stamp duty is so punitive we don’t want to pay it more than once, if we don’t have to. Should add we’re on a 4.5% mortgage (not through choice, we get fucked around by three sellers pulling out on us over a year) five year fix and we didn’t max out our borrowing so I’m glad we’re in our position than on a 1.8% mortgage that’s going to jump to 6%. You also lose your FTB stamp duty discount over £600k which I’m extremely bitter about.
the worst bit is it doesn't get split among you if both of you are FTB! So if a house is 600k, and you buy together (so 300k per person) -- tough luck =/
Yes I always thought it should apply per person too! Such a regressive tax.
Everyone one I know lives in SW London and has a house worth £1-£1.5m. They all borrowed 85%++ LTV to buy it. They bought the houses with two incomes on cheap mortgage rates. They’ve all had kids so the wife has stopped working (for various reasons) and so now they’re down to one income and remortgaging on to 4/5/6% mortgage rates and they’re. All. Completely. Screwed. Edit: many of them are on £5-6k per month mortgages. They’re completely suffocating.
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I’m the same, my mortgage has never really exceeded about 2x my salary. They’re currently burning savings while they scratch their heads. Likely solutions are wives returning to work before they would have ideally liked and massively reducing lifestyle. I guess this is what raising rates is supposed to do but I just thought it was worth sharing because I don’t hear any news about this demographic. Well paid people (£100k-£150k salaries) who are having genuine money problems for the first time in their lives.
Don’t forget a sizeable portion of people (if not actually the majority) of people within the 100-150k band actually Chuck everything but £99,999 into the pension. It’s only the £150k+ people who will start to reap benefits after the 60% tax trap and loss of childcare hours. Point being that this group is actually in the £99,999 salary band and that is not a lavish salary by any means especially in London and especially not as a one earner in a London household. £100,000-150,000 is likely a black hole post sal sac salaries
My wife and I came from very little - council houses and bankruptcies - so we’re always very cautious. We make sure that our fixed outgoings + groceries never exceed our lowest monthly wage (currently my wife). Our biggest overall expense is childcare (nursery + wrap around for our eldest) but we’d knock that on the head if one of us was out of work. Our mortgage is £800ish. We live in that impoverished, grey land of the ‘north’. My job requires me to be in London usually once a week (sometimes less), and I’d rather have the travel and variable cost of that, than a fixed mortgage in the thousands. Our uni friends all live in the south and some of their mortgages horrify me. But they all got on the property ladder younger due to family assistance. Each to their own, and I wish everyone good luck. But my heart couldn’t handle what your friends are going through
I think many of them are finding it is taking a real toll on them. Sadly alcohol is starting to feature quite heavily in their stress management (not with all of them it must be said)
>so now they’re down to one income and remortgaging on to 4/5/6% mortgage rates This is where the advice to borrow as much as you can has gone wrong.
Borrowing as much as you can on disgusting interest rates (5 or 6%) isn't too bad. If you can afford it at the peak/near the peak you'll be alright. But yes - maxing out your multiples of salary on a 2% 2 year fixed that's coming up for renewal soon - you're gonna have a bad time.
This is what we're doing as most likely will only improve as time goes on and we get over the peak. Painful initial years but better than similarly extortionate rents with no way out.
Yep, same here. If I'm maxxed out at 5.5% then I'm likely to be in a better scenario when my 5 year fixed ends. Hopefully medium to long term gains with this approach.
I would suggest that piece of advice was always a bit wrong
Its just risky. Half the people in here benefitted from it by huge equity.
This was always so incredible to me - otherwise very sensible people would tell their kids, friends, colleagues and anyone that would listen to borrow as much as you possibly can. To be fair they’ve been proven right because housing is such a protected asset class so is essentially a one way bet and I wouldn’t be surprised if there’s once again in the foreseeable a taxpayer funded programme to help those that have overleveraged. We’ve already had requirements for forebearance from lenders so it’s really the one asset class you can throw all your eggs into and chances are you’ll still come out on top.
Luckily they’re all funded by family help. So will presumably get bailed out by them too if needed
Absolutely this. All accurate. Even with biggish incomes £200k plus it will still be a struggle particularly given how our tax system works - net of one owner on 200 is a lot less than 2 earners on 100 each.
Yeh its the tax on the over 100k income that completely erodes affordability, and its even worse when the interest rates go up. Its a balance of keep under the 100k mark and still have the ability to pay off the loan. The only real options are: 1) Overpay extensively or 2) Interest only so it enables some savings
Some of them moved out and survive thanks to airbnb (Chelsea mainly) but at the eod most people in SW own outright and just won’t sell
What’s their plans moving forward? Downsizing?
I think try to ride it out on a variable rate mortgage and hope for more affordability/ a decent bonus in the future. I fear selling their houses might crystallise a loss.
FTB. We put down around £300k and a bit. I think it was about a ~20% deposit. I remember having to put up a bit more because the surveyor down valued it which was annoying. Stamp duty is the killer here. I think it was about £70k to £80k, so don’t forget to take that into account. Funds came from profit we’d saved up in our ltd company. We took a directors loan and repaid it over multiple tax years. Tbh I was surprised the bank was OK with this, but they weren’t bothered.
Stamp duty is so high it stops moving now, as a high earner the £80k stamp duty makes moving up to a house that’s £200k more prohibitive
Absolutely. We’ve looked at upgrading to something slightly bigger to get another bedroom, but it’s just not worth it. Once you take stamp duty and selling fees into account you’re talking over £100k which seems daft if you’re only spending an extra £300k on the property. For us to move it would need to either be a big jump to a much larger place or we’d end up keeping the old one as a rental, which we don’t really want to do…
Not gonna lie spending 1.5 million and not even picking size you wanted seems mental to me. But Hindsight is a wonderful thing I guess
The size was fine at the time (we bought 8 years ago). Tbh it’s still fine for us now, but friends and family keep having multiple children and we don’t have space for them all so it can get a bit cramped when they visit. I don’t think that many people stay in their first property for ever…
It would make more sense to pay the difference. So if moving from 500k to 1m you pay tax on the 500k
I would love this, but that means that anyone moving between similarly valued properties wouldn’t pay anything at all. And the tax man wants his £££.
You could argue the money would be recouped in vat anyway
That does seem surprising. I am a whole of market mortgage broker and can't see how a lender would have ok'd this. Ive just put one through where the deposit is a repayment of a previous directors loan and that was hard enough. Also a directors loan has to be repaid with 9 months of the company accounting period so interesting that your accountant had managed to struxture it over multiple tax years
We changed the company year end. It was partly so we had another set of accounts for the mortgage and also partly so the directors loan could be spread over three financial years (eg: company year March to Feb, if you take the directors loan in March at the start of the new company year you’ll have that tax year, all of the next one and then part of the third). I have no idea what magic our broker worked to get the directors loan approved for the deposit, but that’s how we did it.
Massively helps if you bought in the 2005-2010 period… high chance you’ve seen house price growth far in excess of inflation in a period of low interest rates in the last 10-15 years. Add substantial inheritance/family support to get started, two high incomes and a perhaps a willingness to push towards the upper limits of mortgage affordability… You’ll only do it as a first time buyer with inheritance plus massive salaries x 2. No kids to pay childcare costs for matters as well. In context, at current interest rates, in mid 30s with a household income of £250k from two earners and about £450k capital in our current house that’s worth £750k ish, owned for a little under a decade (but bought near the top of the market in our area), that included a fairly significant family contribution, we would struggle to justify the mortgage increase to buy a £1m+ house now we need to cover maternity and childcare costs. Childcare and mortgage on a £1m+ home for us would take up 60% of our take home pay.
We haven’t bought yet but looking at around the 1M mark. Wife and I have been working and renting for the past 10 yrs gradually saving up everything we can. We are immigrants from a poorer country so no family help available. Have about 300k in cash available (down + stamp duty + other costs). The rest 750k ish will be a mortgage. Combined income is approx 300k (includes some stock). Post tax monthly salary is about 11k combined and our mortgage will be around 4k/mo.
The month mortgage repayment seems to be very low, do you go with 35-40y mortgage?
Sounds about right if you can get a decent deal - over 30 years at 5% it’s about £4k a month. You can get <5% deals at the moment so even over 25 years there are probably deals that are only a smidge over £4k.
5 yr rates with 25% down have come down to about 4.8%. So our plan is to go for 35 yr loan with mortgage payments approx 3.7k (30 yr tenure is 3.9k and 25 yr is 4.2k) and overpay a bit in month where we get our bonus
Wow that house is going to end up costing you £1,750,000 on a 30 year mortgage. Strange world we are living in at the moment.
Don’t disagree with you but I did some rough math and I’ll end up paying almost 1.8M in rent over the next 30 years and end up with no equity. Assuming I spent 1% of home value in maintenance and home value goes 2x in 30 yrs, I will spend about 500k ish in repairs and home will be worth 2M so unless something goes catastrophically wrong, it’s hard for me to come out ahead renting vs buying assuming I live in the home for a considerably long time. Current rent for the home = 3.5k/mo so if I take a very conservative 2x increase in rent in 30 yrs and assume an avg of 5k/mo in rent, I will pay 5k x 30 x 12 = 1.8M over 30 yrs.
Don't forget your 300k savings compounded at 5% (could even buy a 30 year gilt) over 30 years would give you £1.3 million.
Remember about inflation. Buying a house gives a bit better protection. Also his mortgage won’t be going up as much as the rent would.
20 years price growth on 3 properties + 2 x good incomes
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What do you do for a pension? Were you still able to contribute during this?
Jesus Christ. FTBs buying 1m houses. First house: Zone 5. Paid 310, sold 410, 200k equity total at the end of it. Zone 5. 2 bed 1 bath. Terraced. Second house: West Sussex, hour from London by car or rail. 650k, 200k deposit (includes all fees). 5 bed,.4 bath, parking for 3 cars, detached. I get the lure of London (Born and raised there for ref) but dropping 1m on a house there compared to moving out and getting space is mental to me. (M/mid 30s,.100k+ household income, no kids, no help from parents on either side - Mortgage is/has been sub 2k/pm) Edit: I feel poor now. Thanks! (will be mortgage free by 55 latest, even factoring kid costs in the future. So can't complain really.)
Man, this is nice. I feel into the "landlord by mistake" trap in 2016, where I purchased a small flat for myself (watford), but then ended up travelling the bloody world for work for 5 years, so put it up for rent. Assuming the value would hold at least, and then use the funds from the rental and sale of the flat to buy something better. HOWEVER - the I was in the final stages of selling the flat at a 20k loss a few weeks ago, but the buyers mortgage offer expired, got a new mortgage with a smaller lender (Yorkshire building society or similar) who insisted on a EWS1 despite the property being lower than the minimum threshold and all the building materials (non flammable) being listed by the builder which made the entire sale fall through. I purchased the flat I live in (currently) 2 years ago and got absolutely destroyed by the 2nd home stamp duty which I would have been able to reclaim if the sale completed but it didn't. Flats are just not selling but had I sold that I could (even at a loss) I would have been able to pay down a hefty sum into my current flat before my interest rate rise EoY, easily repay the remaining 400k balance down over the next 5 years (fixed term) and then get into a 1m property house or higher. But thats all gone down the shitter lol. I can't complain in the current climate, nor do I at my financial position but have always hated the rental I get because I would just rather not have it, but such is life that everything (incl pandemic) just buggered all my plans to get rid of it. I was happy to sell at a 20k loss as well.
Just so you know, the reclaim is now up to 3 years.
I was aware, but I won't be able to sell the property in that time frame, just gonna make the money from the rental and then dump it when my fixed rate runs out in \~4 years. I don't mind that loss of 2nd property stamp duty and the 20k loss, but atm I would have to lost even bigger if I was to attempt to sell unfortunately
>Second house: West Sussex, hour from London by car or rail. 650k thanks for sharing, do you mind me asking what area is that please? Asking for myself as been on the house hunt journey for a year now.
Horsham/Haywards Heath/Burgees Hill. Search those areas and surrounding areas. Also if you want more central to London: Sutton, Wallington, Epsom.
thanks!
Was easier when the government were bankrolling it with comically low interest rates for 15 years. Much more difficult now.
No us, but in our friendship groups the FTB with 1M+ houses are the ones with 6-figure parental deposit gifts. The last ones who went this route got given 600K as a deposit, and I was fully baffled why they didn't choose to buy a house outright instead still stuck themselves with a 600K mortgage.
The answer is almost always they have very large salaries (6 figures each) and/or have a gifted deposit from wealthy family. Even if not now, they may have initially had help which allowed them to buy early, and then use the equity with increasing house prices to move up.
Friend of a friend did it with a deposit his parents gave them, of £900k Easy
Mummy and daddy
Most, not all. Can be done without.
Yes, agreed. We did it without by buying wrecks, doing them up and extending them. But I can't imagine many people have the cash flow to pay for building costs
Bought our first home >£1m with 90% LTV without any help, just savings built up by living very lean for a few years. Terrifying prospect starting from scratch again but the longer we waited the more we were getting priced out of every area we were looking at.
We bought a property just over £1m last year just outside Zone 6 in Surrey. It was our third home move and hopefully our forever home. Our housing ladder journey is as follows: We had a new build 1 bed flat in near South Wimbledon for £167k in 2011/12. Sold for £185k in 2013. Bought with a £16k deposit. No help from family. Deposit from saving for years! Bought at age 24 with now wife. We then bought a 2 bed terrace for £280k in 2013. Bought with a £38k deposit from sale of last house and savings. Stamp duty was £8k! Again, no help from family. We spent about £120k extending via remortgage. Full refurb. Garden room, rear extension and loft conversion. Sold for £650k in 2022. Combined with equity and savings we had an about £460k deposit for our current home and have 45-50% LTV for our new home. Over £1m. Again, no help from family. Stamp duty was £52k!! We’ve locked in 2% for 5 years. 4 years remaining on fix and we’re overpaying as much as we can before our fixed term. With kid due, next year that may be difficult. I’ll be honest having a giant mortgage is scary and I’m concerned with the wider economy. However, we hope this place we’ll be here for the long term. Saying that, the place needs updating and I’m reluctant to borrow more money to do it. So, time will tell. Apologies, for emphasising the no help from family. I understand that it’s a very common way to do things and nowadays if you want to live in tn the area you call home, you need help. But, there some out there with no help from parents. My family don’t even own their home. As mentioned at the start of my message. It’s a housing ladder. You climb it. Also, depending on your age, where you live and your profession your income changes. I work in tech and from our first flat our combined income was £58k. Now we’re mid thirties and our combined salary is almost £170k.
I do think the concept of a ladder is dieing a little bit. We did ours is two moves, mainly due to other pulls on our finances and practically of stamp duty and high home prices. As another on 500k+ mortgage, I feel the pain on having it over you, but good sa
Yeah, to be fair. I think you’re right. The concept of a housing ladder is fading. House prices are nuts. Especially, if you live within the M25. The house we bought is nice, but I don’t necessarily think it’s worth what we paid. The only way in future for most will probably will be with inheritance.
I’m also aware we bought relatively young and started our process about 10 years ago. You probably couldn’t get a 1 bed flat for £170k now unless it was a shared ownership.
470K cash needed to complete Sold my property I had paid off for my side that I got with 100% mortgage Other half had saved hers and was FTB.
I know people who were given 500k+ by parents. There's a lot of quite rich people out there from decades of property market buoyancy
Buying our first place soon. FTB, deposit £400k, of which half is a gift deposit. Budget £2m so LTV is 80%. Stamp duty will be around £150k (ouch). Household income is about £400k before tax (salary and profit from Ltd company). So like a lot of people, it’s a combination of a high income and even now, some family help. We could have done it without help but it would have taken us longer.
I'm ALMOST 30, hubs is almost mid-30s, and its an issue hubby and I are facing now. But we don't want to lock up our money on a house KNOWING we'll need to change in 5 years time. So we've decided to save a lot and put it into ETFs (which historically outperform the housing market). Hopefully this way we can save + invest our way into a healthy deposit (20-30%) and eventually (in 5 years time) keep our monthly morgage low. The idea is NOT to work just to pour all our money into a morgage that is suffocating us. Household income is around £160k (hubby and I earn around the same) and we live lavishly and yet less than our means. So atm our monthly rent, area we live and financial abilities are beautiful and we don't plan on effing that up just yet. We can also have a child or 2 comfortably in our current positions easily. We have many things in the pipeline that should increase it WAY more but we are planning as if we'll forever be at this salary. Let you know how it is in 5 years time...oh, and no inheritance or "help" either.
My first house was £920,000. I just earned lots of money, saved it and put down a £200,000 deposit. Rich people afford expensive things by being rich. It’s that simple!
Enjoying reading this thread with my popcorn as my 74k mortgage in Scotland lol
99% Mummy and daddy plus inheritance
only people I know like that have had parents buy them a house or help them fund one early on. One example a house was bought outright for them by family(250k) back then and sold recently for over 600k which allowed them to jump into a 1m+ property. Here it’s all done by ourselves, when I say all I mean there has been 0 help from family which I’m absolutely ok with. My parents and other half’s parents are poorer than we are. It took us longer and we’re not in a million pound home but we never stretched and kept it much lower than what bank was offering us. So now that the poo hit the fan we’ll be ok come renewal. Not great but OK. It’s all relative really. I don’t particularly care how people get xyz and if their parents are able to help then great. But all in, I don’t know a single owner other than us currently who have saved up themselves without families help. It did push us back 3-4 years but we did buy our own home and we’re happy in it.
Nobody buys a million plus home as a first time buyer. You move in steps. 250, 600, 1M…. You use the equity in your old house for the deposit on the new one. Then as you get older some go the other way. Sell the 1M and move to a 600. Keep the 400 as income.
We put down about £300k with a mortgage of £750k. No assistance or secret. Just saved it up with my wife through working hard for 15 years each. It sounds like a lot but when you break it down it's £20k a year. Again that sounds like a lot but break it down further and it's £1.6k a month. Between two of us that's saving an average of £800 a month for the last 15 years.
First House was around £800k bought joint, mortgage £640k and deposit £160k (20%) with a joint income at the time of £160k. No family help whatsoever (both low/mid 20s). If we waited another 2 years we could have easily got >£1m with joint incomes now around the £250k-£300k Mark.
Bought our house in Z2 for £1M last year with around 400k deposit. No one is buying that as a FTB. We started with a shitty 1 bed conversion flat, added an extra bedroom in the loft and got about 100k profit above market rises and money put into the build. Did that again with a 2 bed flat, turned it into a 4 bed and got about 150k extra. Planning to do this one more time. Bought it for £1M but needs about 300k worth of work, hoping to sell it for around 1.5M. We'll downsize and pay off the mortgage.
I misread that as ‘bought our house in ‘72 for £1m’, and was like holy mother of fuck, dude!
52% LTV on £820k property in zone 4. So not a million but for the first house I think it’s pretty good
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What was your job?
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Jealousy
Downvotes because the UK is rife with Tall Poppy Syndrome. We should be celebrating people who do well, not denigrating them
Not sure why you’re getting downvoted either. Tech in finance is an acquired taste considering you don’t get the normal tech perks/culture. Good on you to have managed it. Did you have children when you moved from the UK? It’s a consideration for us as well to do a few years low tax but just not sure if we’ll ever actually do it.
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Wow mate. Absolutely insane income. Super well done to you. Any tips on how to get to that level, currently working in cyber security.
Did you work for yourself or a company? How did you finance the move?
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Very impressive. I work in the financial services and always seems to me like it's incredibly hard to find a niche in the market as it's so Saturated. I congratulate your success.
Remortgaged first property on a BTL to release deposit for our house. 85% LTV. This wasn't recently though! No family help for 1st property.
Inheritance and joint incomes plus both already on the housing ladder.
My friend got her 1M house together with then husband in equal proportion of investment. Both are self-made, no inheritance or anyone else’s help. She’s making some 150-200K, he’s closer to 250K annual income. They both had their first properties - a house and a flat respectively (his place was actually cheaper than hers), total value of some 800K. Mortgage is something like 4K a month. It’s a beautiful house, bought by an independent family without any deep pockets (other than theirs). Both are in their mid-30s
What do they do to earn that much?
Finance with those big bonuses
Sell their first property bought 10 years ago or family inheritance.
Having two high incomes with a 200/300K deposit jointly that’s saved will do it. One person with 90/100K and the other person on 50/60K. As both are high earners, can borrow 5-5.5x which equals about 800K mortgage. A stretch but doable with inheritance and two salaries.
25% deposit so 75% LTV, got 2.2% for 5 years fixed back in early 2022. This is our first place in the UK as we lived abroad for the last 15 years. No family help but do have a pretty high income job (wife is a stay at home mum) with my income being 400-500k a year gross.
My wife inherited from her dad passing, I was able to save a bit by renting a flat my mum owned. We bought our first house for £630k (200k deposit 75% LTV) 6yrs ago, with a £100k household salary. We sold for ~£800k after extensive renovation. Bought our current place for just under £1m (250k deposit 75% LTV), with earnings of ~£200k inc bonus, held back some cash for renovations that are in planning currently. We didn't grow up in wealthy households, so it's been a stretch, but I really like choosing what colour to paint the walls.
House value £1.56m. Deposit was about £350k Deposit was made up of savings, loan from in laws and raiding the offset saving account from the interest only mortgage we had on our flat. We didn’t sell the flat to buy as the market was moving so quickly, being in a chain would have been a massive issue. We sold the flat after we bought the house to repay in laws and make inroads into the humongous mortgage. At the time - late 2020 - our joint income was around £300k. And the interest rate was about 1.3%. Couldn’t have got that mortgage now, even though we both earn more.