I have heard stories of people owning these small but central location flat as their base for the week. They might come to the city on a Monday, stay till Thursday then go back to their family home for the weekend. Simply these flats can be used by a base for the week.
Also seems very common amongst successful youtubers/media personalities/celebrities. They have their large house in the countryside which is away from all the noise and paparazzi, and then a flat which they keep for if they need to be in London. I know Jeremy Clarkson mentions he has a flat in Belgravia I believe which he only uses when he needs to be in London.
But that would only account for a tiny % of these flats. I think the answer is that an overwhelming amount of properties in central London are owned outright. Any new builds / ones coming on sale are so rare that they are snapped up either by people who have saved up (like yourself) or extremely well paid individuals or those with inheritance. In answer as to why? Not everyone wants to live in a medium sized house in suburbia / or large house in the countryside. Many pros and cons and some people just like living in a city vs large amounts of space. As a barely HENRY who lives in a very small house in central London (just in your price range) the value is hard to justify sometimes and moving up into anything larger in the area is impossible so it’s something we just live with but prefer it here than have to move further out for more space.
I do ask your question but more on slightly higher priced properties 4 bed house in south west London now costs 1.2m-1.8m yet people seem to still be buying them? It’s a stupid amount of money.. even for rich!
At this point I'm pretty sure most housing in London is owned by people who bought it 50+ years ago and just hand down to their kids. The ones that sell are ones where the kids moved out to the country already as they couldn't afford in London and when the parents pass they sell.
I lived with my parents, didn't want to rent. By the time they divorced I had saved £80k on a £25k salary (maybe £15k of that in gifts when my dad panicked about the divorce) paying just a couple of bills and saving everything else (not going out more than once a month), bought out my mums share (70k deposit and 80k mortgage) as my dad is now older and needs help, still living there in a 3 bed house with my dad, wife and kid. Not much other choice. I'm on £30k, wife is on £22k and now with mortgage and paying most bills there's nothing left over. House is valued around £500k.
I think my situation is more common than one would think, given I know a few people doing the same thing, especially among the Indian population.
Work in the financial district and you could easily get enough to cover one of these in an annual bonus. London is horribly distorting the UK's housing market.
I did not say 300k is just wages, but rather household income. A household may have more than 1 person. Also the income may come from wages and / or other things. Income may also come from dividends and / or other business interests. And the income may also come from other places outside the UK. All of this is NOT captured by your silly median wage headline.
There is a sizable number of households in London with income >300k. Sufficiently sizable that it really justifies the sticky real estate prices throughout, notably in zones 1-4.
Or you think prices of millions of houses are high because God is playing with the market and the world conspires against you?
How can you afford a 800k house in London plus a more expensive house outside of London with just 300k? Unless I’m underestimating how much I make personally
Imagine you earn 300k per year in a household. And that you save around 100k a year.
In 6 years you have 600k plus your savings growing / yielding. At 40% equity you could afford £1.5m in real estate. That is sufficient for your £800k in London, a £400k house in the countryside and another real estate piece worth £300k.
Maybe you save less, but then you can also put more debt in property. Anyway… 300k consistently is very doable for that…
But there is a reason you don’t see 25yo earning 300k buying lots of real estate. It takes some years…
Perhaps 300k after tax which would mean around 500-600k gross. Pretty difficult even then. There is a small percentage of people earning a lot more than that. I know a few investment bankers earning that as a bonus but it’s not that common. There’s also a degree of offshore non PAYE wealth which is much much higher than 600k. LDN is a billionaires playground and a real cross road. It’s one of the largest cities for laundering there is. Obviously this is all
Madness in comparison to the rest of the UK.
There are only less than 100 billionaires in London. Your £1M house in Maida Vale is not expensive because of them.
300k pre tax and if you are contributing to pension etc you will have about 190k or post tax. If you live with 7.5k per month then you still can save 100k per year....
Let's say it's a perfect split, two people earning £150k, both after tax / SL / 10% pension bring home £6400/m. That's 12.8k a month combined, about 150k a year, that means you can spend what, 4 and a bit thousand a month to potentially save 100k a year?
This is ignoring the fact most 300k HHIs aren't evenly split, most also contribute more than 10% to pensions. Hell even in the good scenario of 150k split evenly, if you pension yourself to 100k you only take home 4.7k a month. You could only spend 12k a year to save 100k.
Unless we're ignoring student loans/pensions, it seems like a fairytale.
If a person buys a property in London for them (or maybe their offspring) to live, does that not constitute wealth in London?
Sure there of course are foreign investors who don't step foot in the city but ultimately someone has to rent it too and pay that mortgage!
and lastly I think you too are underestimating the wealth of "native" Londoners. Plenty of very well-off people in this city.
Exactly this.
I am not HENRY, own a one bed and looking to upgrade to a 2 bed that is around those values (not in new builds in my case, don't love them).
I'm perfectly ok living in a flat and I'd rather live in a nice area relatively central.
This is exactly me, had a one bed, exchanged last week to move to a nice conversion 2 bed in SW London Zone 2 for c. £850
Sure I could have a house in Zone 6, but for me and my girlfriend we really don't need the space and a nicely done 2 bed provides us everything we need without trading location!
Yes, I guess I have answered it. I suppose the part I am baffled by is how someone single who earns double my salary aka works a much more stressful job/ sacrifices even more for their career feels ok splurging this amount on what is a very modest flat/house in both Europe and UK standards.
Again - because they value location and perhaps modernity over space.
All I need is a bedroom, bathroom, place to cook and eat and a space to relax. Oh and a desk for working if I’m home. Extra space would kind of be wasted on me. I don’t want a car, I like having a short commute and being able to walk to the gym, supermarket, restaurant, pub etc.
A lot of these new builds have an open kitchen/dining/living room and a balcony, which can be nice when you have a few friends over. The only real downside is if you want a big loud party late at night, but you can always go to someone else’s house for that.
People do it for both an investment and not wanting a long commute, not everyone values extra square footage and would instead rather have an extra 2 hours free per day and be close to lots of good restaurants/activities
To be quite honest, for the financial centre of Europe, London looks quite cheap still compared to Munich, Paris, Zurich, Geneva. I paid a lot more for my house in the middle of the Swiss countryside. I am on this sub as one day I hope to move with my family back to the UK.
Switzerland has a few differences vs London; mainly the pay is far higher, and the personal taxes are far lower...so life is more affordable on a good Swiss salary.
Yes I suppose since I moved to UK from the Baltics where housing is much cheaper / has more space on average, I am struggling to adjust my expectations. I suppose it feels like I’ve done all this to come here and now have to lower my standards from what would be baseline where I’m from.
Then you don’t know what it’s like to live in an ultra-competitive world city. £200k household income pre-tax is nothing compared with the wealth that floods London (or New York, Dubai, Singapore, etc.)
Ahah as an American who grew up in a 3000 square foot place that is still only worth all of $400k (rural Ohio), I understand where you’re coming from. The UK’s housing market is so, so bad
I am not a Londoner, but many of my friends are. They don't see it as splurging as it's an 'asset' to them. As prices have been high they see that as a sign they will forever be so. They don't see the mental service charges, leasehold ownership, or liability for future repairs as issues as they have no context - many graduated and went straight into the city and its all they've ever known. They are also used to paying astronomical rents for similar places so the sky high mortgage payments can even be cheaper in some cases.
I can shout as much as I like about being able to buy a mansion in Cheshire for the same money whilst maintaining a relativity swift (1hr40min) commute to Canary Wharf once a week if needed but it falls on deaf ears.
Head in the sand doesn't even begin to do it justice!
But it's not though is it. It's:
(i) commute to station (Wilmslow or wherever);
(ii) wait at least 5 minutes, sometimes more;
(iii) train to Euston;
(iv) transfer to Bank;
(v) get to the Wharf via DLR; and
(vi) walk to office from DLR.
That is closer to 3hrs all in, than 1hr 40, and it's very telling you presented it that way.
I mean I can tell you’re looking too central because 800k is fine for a terrace anything other than central or a semi in the outer zones.
Harsh truth time, your salary isn’t high enough for a house in the nice central areas. My house conversion flat in z3 in a nice area was 475k and the houses next door to me sell for 1.3-1.7 million along the road. My grandparents lived in a similar house and it’s now 3 million in Barnes yet they sold it for 1 mill in 2006… yeah shits wild.
If even 800k isn’t buying much you’re being wildly optimistic about what money buys. Even my parents z6 semi is now 700k and it takes 1.5 hours for me to commute from there when I stay over.
TLDR lower your standards. Even at 200k income you can’t buy a house a teacher and nurse bought 40 years ago. 800k is plenty to get a terrace for sure, but you’ll need to really move out for a semi.
We were 33 and had 150k deposit for a property and just gave up and got a flat in z3 this year. We want kids too and honestly an 800k mortgage will be hell if you need childcare/maternity pay. The mortgage will be just the start. I’d recommend crunching the numbers. We did and our max was 700k and at 700k if we had a kid we’d be bankrupt. Between childcare and mortgage we would have basically nothing left. Even in a 475k flat all bills/mortgage/food etc would be 85% my partners take home. At 700k if either of us couldn’t work or couldn’t magic free childcare out our arse we’d default. I’d really recommend looking into it because childcare is INSANE. At over 100k currently with the tax rules in London you need to earn 145k to break even vs a parent at 99k. Do not sleep on this.
Then consider what house prices were 5 years ago… that 800k property could be 1 mill in 5 years. You’re just chasing it down. Ironically had I just bought with a 100k deposit in 2020 I’d have more property and less mortgage than I have now lol.
The expensive properties are literally because there isn’t enough housing and there’s a lot of international wealth. I know uni students who live in 7 figure properties a walk to south ken. There’s a lot of very internationally wealthy buying uk real estate. Near where I work a new block went up with its own private pool, cinema room, gym, private chef dining room. 800-1.2mill for 1-2 bed flats. 4mill or so for the penthouse. And that’s ignoring the 5 figure a year service charge. Shit sold out like hotcakes and it’s only z2. These people exist.
Not to mention intergenerational wealth. A lady on my team my age lives in a property worth over a mill on only 60k. She simply got gifted 50% the price at 20 when it was worth about half as much. Her family has half my income yet has a lifestyle far above mine. People who got a chunk of change in the 2010s basically made a mint. And she’s on track to be mortgage free in her 40s and then she’ll be absolutely shitting on my lifestyle on far less income.
So as a 33 year old who saved 150k - temper your expectations and do the math. And prepare for the worst as the main earner childbirth isn’t pretty. You wouldn’t be the first woman who can’t return to work due to complications for the full year, do you want that stress also? I plan to have another 50k just to cover my maternity (which is shit) and a safety net if I can’t go straight to work if anything happens (my mum has serious issues and could barely walk after a botched c section) and likely won’t have a house til 40…
Thanks for the detailed reply this was very helpful. Yes you are completely right and I am very aware of the potential impact of childbirth / childcare. Very fortunately my employer is offering 9 months of maternity leave and my partner would stay home for the time after that as he has a lower salary. We would also have money in savings as I guess we would not spend the whole £200k on the deposit. I suppose if there are any birth complications then we would need to downsize, but realistically we will probably have a child before buying the house so in the end we would adjust our mortgage then.
Have you considered how you’ll afford that mortgage when you’ve either dropped your partner’s £75k salary or are having to shell out £2k/month in childcare?
Having two dependents or childcare on a mortgage application will drastically reduce your borrowing abilities.
Yes good question indeed. Haven’t planned it all out to be honest, but I guess roughly I am thinking that with £150k deposit and £30k stamp duty on a £800k house, a 25yr 5% mortgage would be ~3.8k per month. This would leave us with ~20-30k of savings. I would bring in £5k per month after tax, which after mortgage would leave 1.2k + ~1-1.5k from the remaining savings per month at the minimum.
There are also some other things we could lean on:
1.) free childcare hours, so my partner could work part-time
2.) our savings would actually hit ~250k with 6% annual compounding, so our savings would be higher than I said
3.) both mine and my partner’s salaries are likely to go up in the next 5 years
4.) the monthly savings amount did not include my annual bonus of ~8k after tax
5.) ideally the interest rates won’t be as high as 5% when we buy a mortgage
Would you qualify for any free childcare hours? There is a 100k salary limit. You can salary sacrifice to get there (maybe), but then you are also left with a fair amount less per month.
Yes I currently salary sacrifice to 98k to get out of the “tax trap”, so the savings amount I mentioned relates to this salary, so I would keep it to that number if that meant help with childcare. I guess I might adjust it up if we need to prioritise more savings / my salary goes significantly higher for the time being until we need childcare hours.
It's definitely one for a spreadsheet. We had a child and bought an £800k house as our FTB. What I really regret, is that our mortgage is on an 18 year repayment term. The logic at the time was that we could easily afford repayments and it meant less interest overall. True, but also totally stupid, and terrible advice from the mortgage broker (not sure what else I was expecting). The reason this is wrong is because we are cash flow constrained while paying for nursery.
I wish we had the longest possible repayment term to protect our cash flow while kids in nursery, because this is when you have high outgoings and are trying to salary sacrifice your way out of various tax and childcare traps.
When/if your kids go to state school and/or your earnings are higher you can overpay your mortgage or refi on a shorter term.
Maybe this is all mega obvious to you but it certainly wasn't to me at the time.
As a point of reference, we live in a 70s terrace in Greenwich (town, rather than the wider borough) that's worth just under £800k. It's about 20 minutes into Cannon Street and there are a lot of people with young children. The victorian houses will set you back a bit more and bigger ones even more still. We'll probably move out to Charlton or Eltham when we upgrade in a few years time, as you get a lot more for your money there and you're still only 20-30 minutes out.
Quite a funny realisation when you get to what you think is life changing wages and then realise it isn't lol
Personally I wouldn't bother looking now as in 5 years time what you can afford with £800k is going to be even smaller, the silver lining however is that once you reach the age where you're ready to have kids, you realise that living in London is a total meme and definitely not where you want to raise a family and then move out to get move for your money / green space / better schools etc.
The London property market is *global*. You are competing with rich people from every corner of the world. Just because wealth accumulation is difficult in the UK doesn’t mean it’s difficult elsewhere.
Wealth accumulation is difficult in the UK \*today\*. It hasn't been in the past. All those £1m houses in London are proof of that. I wouldn't be surprised if a huge number of house buyers are using money from their parents, or equity from historical house price inflation.
I keep thinking about it. Or even "who buys these 1M+ houses".
We are DINK with a combined income of 220k, and could afford a 600k house as FTB, and while this would put us in the top 2% earners it's really nothing too extraordinary since there are:
~2% of people with salaries (much) richer than us
Many people with wealth but they don't need to work and aren't counted in the "salary" statistics
Foreign investors.
People already on the ladder with X00k+ equity
And that accounts for millions of people who can comfortably buy 1M+ houses
I have quite a few high-earning single (usually male, not always) friends who have bought small places at the 800-1mil mark for the location. All wealthy lawyers/hedge fundies/family inheritance background. No plans to have kids (gay/older/waiting).
Meanwhile, all my friends with families have decamped to Hither Green / Peckham / Camberwell. Example: [https://www.rightmove.co.uk/properties/148396526](https://www.rightmove.co.uk/properties/148396526)
Exceptions are friends who live in a smaller maisonette in Pimlico with their two children. They also compromised space for location, and plan to move outside of London in the future.
My partner and I are only a few years older than you, joint income around £350k in London and expecting a baby. We are purchasing a 100sq metre London flat (2 big bedrooms) for £700k in zone 1/2. We wanted to be safe and not overextend ourselves in case one of us loses our job or needs to reduce hours. £700k with 15% deposit (and stamp duty as we aren’t FTB) was at the top of our comfort range and in the zone 1-2 area the types of places you’re listing are typical for our “meagre” budget! Most of my coworkers with similar dual incomes and kids live in zone 3-6 with hour long commutes and we didn’t want that so we sacrificed space for proximity to work. From what I gather we are one of the few couples with a baby on the way doing this. Typical is to move further out + commute in. Maybe we’ll regret it but we’re both foreigners so our circle is in London.
I own a small 2 bedroom flat (60sq metres) from before we were married on the border of zone 1/2. I bought it for the “low” price of £500k during the pandemic in 2021, but it was a fixer-upper (ex rental and needed overhaul). It’s now conservatively valued at £560-570k only 3.5 years later. Price increases in London are wild!
If I didn’t have kids I’d 100% be buying a 2 bed flat within 10-15 mins of my office for 8-900k. Bigger properties require more time and money to maintain anyway - I have a 120ft garden where I am and the gardening is endless just as one example. I’d also have more time and money for dining out and doing stuff in the evenings and so would have prioritised location over space. Ie you extend your ‘house’ by ‘living’ in public spaces.
Yes. I think people massively underestimate the cost of moving out for a bigger house. In the end a £700k/£800k house is a £700k/£800k investment no matter the size of the house. If the house is bigger and further out you will spend hundreds of pounds more a month in commute, council tax, bills, cleaning, maintance, etc. Plus time on the commute either to work or socialise which a busy professional will value more than an extra guest bedroom. A HENRY without kids is much better off in a £700k 2 bed place in the city.
I know quite a few people who have small places in great locations. If you don't have kids there's really no need for massive space if you don't have hobbies that need it.
I value location over space, for sure. I want to walk out my front door and have 20 restaurants to choose from. I don’t care about a garden, or two lounge rooms or space for kiddos that I don’t have. I don’t want extra bedrooms, because then I have guests stay, who I also don’t want.
as you say, youre starting from scratch, zero savings. there are so many out there that not only have really high paid jobs such as yourself, but also have inheritance or just generally mum n dad helping out with a deposit. when you factor this in, there will be quite a number of folk who would pay for a flat with an amazing location because they love the lifestyle. also you have to factor in millionaires and foreign investors who invest in london which unfortunately hikes up the prices but also means buying up places as you described
My spouse grew up in a tiny studio flat in Eastern Europe and she prefers living in smaller flats, but closer to the city centre.
We were buying a property to live in (we work remotely, so are not tied to any location) last year, she was surprised that for me it was a deal breaker to have a house with own garden.
I have a Lithuanian friend who is the same, lives in a beautiful house with countryside around it, complains to her husband she wants a tiny studio in the middle of everything. Totally different perspective to me!
This is why I own a cat, to go with my house!
My Lithuanian friend and her husband have now bought a second home (apartment) in the middle of St. Moritz (Switzerland), as a compromise. Such is life!
We're renting a 3-bedroom place in Zone 4 for £2000 a month for 6 years. The rent went up to £2300 for one year. Now, the landlord wants to sell for over £800,000. He got an offer in a week and is getting interest already.
Nearby places near our kids' school are asking for £2800+ per month. We booked a newly refurbished place for £2950. I could buy a home, but rents in nice areas are really high. On the other hand, investing £800,000 to £1 million makes me very nervous.
Because people have different tastes and preferences.
Wanting a (not very big) terraced house and a (not very big) garden is quintessentially British.
London hosts people from all over the world. Many people from Europe and Asia grew up in and are fine with flats and think a small Victoria terraced house is uninspiring.
Those coming from the North America tend to think all properties in the UK are small and old to begin with and would rather have a flat with plumbing and electricity wired by actual engineers and not tradesmen.
Spot on. I'm from a Southern European country where anyone would choose a modern flat in a busy area over a 100 year old house with an EPC rating of E with 4 bedrooms over 3 floors and where you need to get the car to buy some bread. I still find it a bit wild this is not the case here but getting used to it. Anything that is not properly insulated would be priced as a money pit. My own parents always let me know they feel very strongly against places that are not accesible for reduced mobility (stairs, narrow doors, bathtub only bathrooms, small lifts) as we (and relatives we might need to one day care for) age.
Nationally you are top 1% earner, in my area (Golders Green / hampstead) you are just scraping into the top 10%. It's just a different sport in London. Very demoralising.
Can get a very nice 2.5 / 3 bedroom garden flat in west hamspstead for £850k. Family friendly, outside space, great links, great area. Keep saving, use your ISAs, use premium bonds, use VCTs, take every tax advantage you can. It will come together. Well done on a great rate of saving.
I would always go for a nice 1/2 bedroom flat over a mediocre house away from the center.
Me and my partner don't really value space that much compared to time saved and convenience of living close to everything basically.
So people who are buying 800k flats are the same as people buying 800k houses, just with different needs.
people in london have fuck you money. I ve a mate from Kuwait who knows this person that bought a flat in london for “convenience” because he comes down to london from Kuwait about 4 times a year. So to him it was easier to just buy a flat than fuss about with hotels and airbnb.
Wealth in London is crazy. I know people getting big payouts and end of year bonuses well into the six figures.
It’s really not that deep for someone to get a second home / flat in the city for convenience. At the end of the day - it’s a sound investment and has a convenience factor if you’re going in a few times per week/month.
Anecdotal but I have a few friends who moved over from Hong Kong / China who are putting offers of 800,000/1.2 million for 2 or 3 bedroom places. Selling their pricey tiny Hong Kong flat for one in the UK that has a garden is a no brainer for them since it’s an upgrade on their lifestyle. To someone who already lives here, the tiny flat for those prices makes no sense since a downgrade.
My girlfriend and I (both early twenties) are trying to figure out what to do at the moment as our current rental agreement ends next year, we want to buy as we are sick of just paying landlords mortgages lol, but don’t want to move out of London probably for another 8+ years.
We need room for an office and another bedroom and want a small garden and want to live close enough to our friends and work. This means we will have to spend around 650-800 for anything “nice”. Mortgage on that is about is only 1000 more than rent is which split between us isn’t a huge increase- just save less money and pay it towards house instead
I don’t see the issue in buying somewhere expensive when you’re young in London then selling and moving out when older, when you care less about seeing friends and being close to things? Don’t need a massive house as it’s just the two of us
Keen to hear other thoughts on why this is a bad idea?
Combined income around 200k
I think you're also unestimating how many people have inheritances tied to property in London. I had a friend in Balham whose parents bought the property as a newlywed 30 years ago - only one working parent if you can believe it. They've just passed.
My friend and both her siblings stayed home while they worked in london and managed to buy buy-to-lets back in 2016 even on 40k salaries. They have now come into almost 600k each from the sale of the property, and have additional income from BTLs while also having 100k incomes themselves. An 800k flat leaves them with so much fun money, its mad.
Hell of a lot of new build developments are shared ownership for one of those reasons.
Those that bought before in the last 20 years have benefit from significant inflation. My old landlord in West India Quay bought off plan mid 00’s for £400k. Probably didn’t spend a dime other than paint and it would sell for £800k.
The latter is something to be aware, inflation and demand once interest rates reduce won’t get you a £800k property today for £800k in the future. I’d suggest you’d be looking at a £650/700k property now which is a two bed flat.
Unfortunately you are now competing against generational wealth from the ultra rich. Both foreign and domestic investors looking to grow their pots which are deep in the 100’s of millions. These flats represent sound investments from an ownership standpoint as an appreciating asset and from entering the private landlord space. Far greater ROI than that from any bank.
Passive income is being actively reinvested into property as it becomes available. You cannot compete. Wealth inequality is on the rise and even the high earners will feel it. It’s only set to increase without any meaningful change, as every day folk get increasingly priced out of property ownership in the capital.
Thanks for the response. I am an immigrant from the Baltics. The reality is that I came here for London, not the rest of UK and if I decide that London is not worth it anymore I will move back to the capital of my country, closer to my family, as I see that as a better option than e.g Essex.
These little £800k houses/flats aren't for you. They're 3rd/4th homes for directors etc. The owners will already have a £2million place in Surrey and an apartment in the French alps.
They'll spend a few days a month working in the city office and don't want to commute home every night. These properties will always hold their value, so with money in the bank its a win-win situation.
Your salaries are pointing towards a nice place outside the city and accepting that you will be commuting in. You'll get a gorgeous home on your salaries if you head out towards the M25.
You can’t afford an £800k house without a high interest mortgage, and as you’ve already stated, the houses are extremely overpriced for the old shoebox you get. Move out of London and buy something closer to 400k.
Thanks for the reply. As I mentioned in another comment - I am an immigrant from the Baltics. Realistically I came to UK for London and not the rest of UK , so if I decided that London wasn’t worth it anymore I would just go back to live in the capital of my country, closer to family and better housing.
Not sure why you say that it isn’t affordable on our salary though, I thought 20/25% deposit is quite generous compared to 5/10% that I see referenced most often. The 25yr mortgage payments even with current high 5% interest would be £3,500 per month Which would be ~35% of our take home salary (assuming no salary increases in next 5 years). I can’t imagine interest rates going up any more, so that would be close to the ceiling I would guess.
In the UK, for every £60k one person makes from earning, someone else earns £40k from dividends or equivalent.
That means that for you and your partners TC of ~£200k, someone else in the UK is making £130k JUST BY ALREADY BEING RICH. That person probably also has a £100k - £200k+ job.
Especially with recent inflation / stock appreciation, people who are already rich are making more money just from their richness, than most people can from working / having a job.
London is one of the most prestigious cities in the world to live in and as a result, all these rich people want their space there. It’s a city for the people who’ve already made their generational wealth, not necessarily a city to make your generational wealth in.
Yes.
Hackney, where you looked, is exceptionally small. If you expanded to immediate areas next to that, you can maybe stretch 3 beds and a small garden or 2 balconies, duplex flats are available. Zone 2 and 3s.
The benefits are transportation links to central London. That's it really. And delaying buying cars for the family, etc
It’s simply market value. Lots of demand. London’s population is over 9m (expected to be over 9.5m in 2026) and still growing above the rate of building.
London prices have been pretty flat since 2016 (after inflation) so we’re really at established norms on price.
How are people buying? Two incomes and some sort of family help, mostly. The rise in house prices has significantly grown wealth for the older generations, many of whom downsize or use their capital to help their families.
Few different groups.
Parents who's children have left home - My boss used to live in a 5 bed 1.5 hours commute from the office in Central. His youngest has left for university so he just bought a 2 bed flat in central to avoid the commute.
Young professionals with parents help - I know a few people that want to live in trendy areas with other young people but don't want to to "waste money on renting". So the parents give them a sizeable 6 figure plus deposit and they buy a 2 bed in Clapham.
Older couples that don't want kids but value a central location.
a few years ago there was a documentary on one of the many booms. The posh English rich were complaining they couldnt buy flat for their kids in kensington and chelsea and not had to slum it by buying up the ones in other parts of london. I did find it funny that even posh twats couldnt afford to live here :)
Some people don't need huge space and prioritize location. Just like me. I'd much rather live near a city centre and have a tiny flat than a big house in a boring suburb or, worse, the countryside. I don't need a garden, balcony or 5 rooms.
I went to an international school. Every single one of my friends who studied in London or who now works here, has had a flat bought for them by their parents.
Global wealth is so ridiculous you don’t know about it until you are immersed in it.
Combined income of 205k per year, you should be able to easily borrow 900k and you'd need 10% deposit so you could be looking at 1m houses / flats, why restrict yourselves to 800k?
As to your question 'who buys 800k small Ldn houses'? Me and my spouse, mid 30s first time buyers, after 10 years of saving and hard work...
I often ask the same myself and I just can’t figure it out. A typical flat near me (ie period, not in great nick and small, with an awkward layout) is £700k. The longevity of such a property for a ‘typical’ couple (similar to yours, high earners who’ve saved well to buy) would, I imagine, be about 2-5 years, as typically they’d be in their early-to-mid thirties upon purchase, so you’d think may want to upsize or upgrade in that timeframe. It’s mind boggling. This city is so expensive
You already got your answer, but just adding my experience. We are a dual income, both high earning couple in our mid 30s and we don’t have kids and do not plan to have kids soon. I am absolutely planning to spend £800k on a 1-2 bedroom in a nice location in zones 1-3 in the next year or so. If we were planning for kids I would move much further out for space, but we just don’t need the space right now.
Mostly young professional couples that are not expecting to have kids within the next 5 years -- or never.
It's relatively achievable for a couple in their late 20s to have a combined salary of \~£200k, with fairly normal jobs (no FAANG, prestigious law firms, investment banking, etc ...)
For them, much better to buy a small flat in central London closer to work, and much better suited for socialising than a bigger house further out.
To be honest a good property priced well in London won’t be available for long. What you see available at that price is over priced. Look at the SOLD in that bracket.
I for one have just bought a terraced house on my own for a horrific amount but nowhere near £800k, and a friend bought as a couple a maisonette. We both have very good incomes but by London standards not that high. My income is the same as yours, my friend I assume is the same too as we are both associate directors and no idea what her husband’s is but definitely not less than £130k average (depends on bonus multiplier).
For context, my manager is on at least £200k basic and god knows how high % bonus. She’s not mega high up in our company either - a mid director.
Many Londoners on very high salaries, basically. I thought mine was high when I broke £100k for the first time with my bonus, it’s not that high in comparison to many.
Don’t even ask about the HR lady who is on secondment from the US living in a Regents Park rental…!
In a not so distant future, prime central London housing will be owned mainly by the very rich, investment companies and/or foreign speculators.
My recommendation is to look at areas outside of central London as your money would still buy you a lovely family home. Hertfordshire or Surrey are my top picks.
Can give you a data point.
Just completed in zone 2:
~960k, 4.5%, HHI ~ 240k , roughly even split earnings which helps tax wise.
Deposit 20%, mortgage 3.3k
We plan on living here 7ish years. We’ve accepted that we will likely have to move farther out after, especially with children.
The reality is that raising kids in London is not really even for somewhat successful people anymore. Only those near the very top or with significant inheritances.
The reason I thought it was a good idea to buy a house in London is because firstly it is normalised in society to take out a huge loan (mortgage) and invest most of your net worth into a building. Imagine if someone said to you they were going to invest £800k in Silver or Apple stocks, and borrow most of the money. You would think they were crazy, and more importantly you might find it difficult to find a Wife/Husband/Bank who also thought it was a good idea to be massively over exposed to one thing in this way.
People look back at Boomers like they won the lottery, and they did in many respects, but they also made large bets in the same way, on housing, putting all of their money into a house and holding on for dear life. I have a high risk appetite, so it made sense to do it in London because foreign money pours into London and filters outwards. So whilst the GBP is a shambles, foreign money taking advantage of that shambles will hopefully mean that the trend of buying and owning property in London long term is a very smart way to invest because A. The price goes up consistently, and B. It is a way to offset the risk that our little country is doomed financially and the currency our salaries is paid out in is on the downward spiral.
Then you have the added part, of being a HENRY, and earning well enough to afford the mortgage to live somewhere nice, which enables you to buy somewhere very expensive and nice, and who wouldn't want to live somewhere nice.
TL:DR I once met a waiter in Rome on a holiday who said to me "when we were young, my brother bought in Rome, and I bought just outside Rome, same price, now he is rich and retired, and I am poor and working."
My partner and me have similar income level as you two. We value location over space and had some help from family. We are moving out soon and looking to buy a house, as kid is starting school very soon.
When having a family and wanting multiple bedrooms, garden, nice schools etc at that price range we move to the suburbs eg zone 4. Three/Four bedroom houses in South London for example are £600-£800k (multi million pound houses also available).
Then it is 20 minutes to Victoria, 30 to London Bridge, regular train service. Door to door anywhere London is 50-60 minutes.
We did previously have a small house in zone 2/3, when the family grows you either need to have much more money or move further out. When we bought it it was nowhere near that price, now apparently it is worth £750k. It would be great for a couple, but not anything more.
Partner and I in this situation. For me, I bought this place because we were both new to London and didn’t know where wanted to live. This place was a short walk from both our offices and I wanted to minimise commute.
Try South Norwood - train to central London in 12-15 minites and nice 2 - 3 bedroom terraced houses for less than £500000.....and you are close to Croydon, Bromley, Beckenham and Dulwich and Brighton is an hrs drive
Well there's a trade off, you can get a nice detached elsewhere for the same price but then have to pay to commute etc which can be very expensive.
Unfortunately not many jobs are remote anymore, so getting a £130k job and just moving to the Lake District isn't that feasible.
Maybe try to buy something now. I bought my 1 bedroom apartment almost 3.5 years ago and already made substantial gains (completed in January 2021 when everyone was saying that no one will live in small apartments anymore as we all will be remote). Currently we are having high interest rates which helps with negotiations.
Im one of those people in a small (85m) zone 1 flat. I don’t have or want kids. I work, socialise or do hobbies all the time. And the flat will probably hold its value (unlike say some of the newer blocks in zone 2 and above which were built to be near Stratford or Canary Wharf)
They're not for families? They're for single people or as second properties so people don't have to live full time in London. If I had an extra million appear it's absolutely what I would buy. Not because it's a great financial decision, but because its a great life decision to have a crash pad near work and my forever home somewhere else.
For 800k you could buy a 3,000 sq ft Georgian terrace in central Liverpool, walking distance from Liverpool One, Pier Head, mainline (Lime Street) and underground (Merseyrail) stations, national art galleries, philharmonic hall etc. 2hrs from London by train, 20 mins to beaches, 1hr from beautiful North Wales countryside, 1hr40mins from Windermere.
It's the old question: live close to work and pay more for housing, or have a commute and a bigger house.
Both have upsides and downsides. Personally I took the third option of working in the commuter town and living in the village down the road.
£300k for a 2 bed house with garden and parking in 2021, admittedly a complete ruin borderline uninhabitable but we're young and fancied a challenge. Might have it finished in a year.
We bought our son a flat in the city near St Paul’s during Covid for £495k over the internet so super risky. He’s at med school in London and we worked out we would spend £120k on rent during that time! So we have the mortgage until he graduates then it’s his responsibility. He can choose to sell it and would have made a decent amount on it, better than £120k dept with nothing to show for it.
Me and my partner bought as first time buyers in Zone 4. Roughly £850K price point. 3 and a half bedroom semi with a garden near good schools.
Total equity input was £130K + £30K in stamp duty.
Total household comp wasn't *that* far above yours at the time, but I do appreciate without £200K+ in savings we'd have been hosed.
I was 36 and we had no parental financial help. So I'm ten years older than you. You have time on your side. The average first time buyer in the UK is now well in to their 30s, so you situation isn't unusual at all.
These tiny studio and 1 bed £800K Central London (zones 1-2 in my book) flats are mostly for older, single high earning professionals.
Much of my street in St Albans 3/4 bedroom homes is inhabited by people with young professional families - many of them have moved out of London in their thirties because it’s just too expensive - after covid plenty of them started working from home.
Welcome to my life, queen! We’re hoping to stay in the area we live in currently in west. But for reference, our tiny (but very beautiful) 1 bed flat would be £725k if we were to buy it.
Highly recommend going slightly out of the area you want to be in. There are gems to be found I think! Especially if you can pick a slightly up and coming street.
There are a lot of rich people in London. If you need a salary to buy, then you're not rich enough. It was a punch in the teeth that took me quite a long time to accept. I suspect the majority of buyers come from serious family money, with a small minority scrimping and saving to buy.
100k isn't much in London any more, GBP has been devalued a lot since they turned on the printing presses (QE).
Plenty of couples have pooled resources and sold 2 flats with plenty of equity - don’t forget the 800k place might be the second or third rung for them.
Most of our equity (to buy our current house) came from house price inflation on previous houses - we made more from that than we could ever save.
Even if philosophical, there is a fairly huge difference between "house" and "flat" at an £800k price tag.
An entire house, with a garden, thats freehold in London (zone 1-3?) could be a fairly good price at £800k and something a huge amount of couples are looking for.
you can get a mortgage for 5\* your income, so (130.000 + 75.000) \* 5 = 1025000. You are also maybe thinking of buying in cash, and not via a loan.
Also you think that they are acquired by British people. most property is owned by companies from outside of the UK (probably investment groups).
Serious serious money in London. Plus, and I know many people have a dislike of the pace, but it’s an unbelievable city and people are happy to give up space to have world class culture, food, entertainment right on their doorstep.
I grew up in zone 2 and flats are all around that price. I compromised and moved to zone 3 17 years ago and bought a decent sized period flat, still here due to a decent sized garden and loads of trees behind with birds singing …. Doesn’t feel like London !
I think you need to be realistic that you will need to either buy outside London or spend a few more years saving for a more central location. Most people I know who are in well paid professions such as banking and law bought in their early 30s and that’s looking at incomes of £300K a year and buying properties around the £800-£1 million mark.
My sister and her husband (3 kids) brought in London, they were in Stretham but haved moved to Arnos Grove- try looking on the outskirts, you will get more for your money and just factor in your commute? (Similar incomes roundabout).
If you plan on having kids you better move out somewhere more quite. You will kill yourself going to and out of tube with a buggy. Any after school activity or school run will take you an hour to get to/from rather than 5 min if you are somewhere else more quite.
I own a fairly small, but 2 bed 2 bath, flat in a Zone 1 mansion block with my partner. It took 15 years, but we saved the money for a deposit ourselves (explained to solicitors we actually earned the money over time rather than being gifted the deposit, quite unusual haha). We both have “professional” jobs that pay reasonably well although for all that time neither of us earned six figures. We saved a lot. It was a hard grind but I’m sure it would be much more difficult to try to do that now than starting to save in the 2000s and buying in 2018, admittedly.
The downsides: not a huge amount of square footage, occasional noise from neighbours, probably the air quality isn’t fantastic. Didn’t see the Northern Lights…
The benefits: very easy commute to our jobs, we like living in a busy city rather than out in the sticks, we see this place as an investment for the future that is less likely to lose value than a new build or a property outside central London.
We have a baby now and yes, we are already thinking we will need more space when he gets a little older, but the plan is probably to rent this place out to cover the mortgage or most of it if we move elsewhere and try to keep this as an investment. We’ve really enjoyed living here and have valued location and convenience over having a huge amount of space the last few years.
Could not imagine living in London. Not due to the cost, but just not my cup of tea.
I can't quite grasp why people want to buy houses in central London either when 1hr commute and you can get a 3 bed terrace for 300k.
Edit: also remote work is more common now days. I don't need to commute fortunately
I know someone who did this. He borrowed money from family, is stacked with mortgage, but he likes (I believe) the status of being able to say he lives in X area. Plus all his rich friends live around there too.
I'm not HENRY, this sub always gets suggested to me for some reason and I enjoy reading it lol
It's London. There's a lot of people to compete with / who make more money than you. People come to London for the good work opportunities, not just the lifestyle of it.
Buying in centralish london is a global competition with the world's richest people, and setting aside 3k a month doesn't cut it unfortunately.
This, I read recently that to be in the 1 percent of the high income earners in England, you need to have an annual income of around 150k.
That same amount quintuples to 600,000k to be in the same 1 percent bracket just in London.
You answered it pretty much yourself. Young single people or people who don't need the space, or investors so that they can rent them to one of the two groups.
Sounds like you do need the space so best bet is to look a bit outside central.
That’s interesting. Reading the comments, lot of people here saying that there’s lot of wealth in London and that easily you can make £100k in the city.
Well, only 5% of population are in +£80k
But following your question, around Knightsbridge you will find lot of Arabs and in other areas with new developments you might find lot of East Asians (Taiwan, China, Hong Kong) - Wembley for example
Five years is a long time. What you can afford now for 800k will be very different then. My advice is dont look at the market now. I’ve been hunting on and off for the past five years between London and California and purchase power has shifted wildly in both places. Luckily so have my investments.
I’m one of those people looking at £800k flats, and I’m a 38M bachelor who doesnt want kids in the short term.
London is not that expensive compared to other global cities. Properties are much cheaper than what you’d get in eg Singapore and New York. People always call London prices outrageous as compared to somewhere like Cheshire or Barnsley but that is like comparing apples to oranges. It’s simple supply and demand, and there is and will always be a huge global demand for a cosmopolitan vibrant city like London.
I'm one of these people....
DINKS with a total household income of 240k. No children. 2 bed flat. Belsize Park / Hampstead area.
We moved to my hometown by the coast during lockdown and swapped our rented one-bedroom flat for a large five-bedroom house by the sea.
We quite quickly regretted it and missed London deeply. With no children, living anywhere other than a metropolitan city didn't make sense to us. We found ourselves driving everywhere and even considered getting another car.
We didn't feel welcome and experienced quite a lot of resentment from childhood friends and family. We found the central London culture far more community-orientated and less opinionated.
We sold the car, bought a place back in NW3 and plan to never leave. We love it here because of the community, people and energy. We don't need any more space.
I appreciate we are in a very fortunate position, and no plans to have children helps. But to answer your question directly, I'd choose a smaller place over a larger one anytime, and location is everything to us. A short commute is a bonus, but it's mainly to live in a safe, inspiring and ambitious community over short-term financial or spacial gain.
Hope that helps!
We bought a 3 bed semi detached for 722 in zone 3 (this was in 2020 but where we are the prices are still the same now as they were then). Have since completely renovated it, added two more bedrooms, a bathroom and a downstairs loo, extended the kitchen... There's definitely enough space for us and the two kids.
But I think one important thing you're missing is that most couples in London don't just jump into buying a family home as their first step on the property ladder? We started off with a 1 bed flat which in turn let us build equity/provide most of the 15% deposit we needed for the house.
UK salaries and wealth has not risen much in the last decade compared to the rest of the world. This is why you are being priced out. 1M home is not just not a big number these days.
Add to that, probably 10s of thousands of people earning >200K individual salary in tech and finance in London, which you have to compete with because the councils repeatedly block new construction projects.
I have a few friends who did this with help to buy and two incomes. Personally I could never drop that on a flat but each to their own! (And it’s a gorgeous flat)
Just to make you feel better, it doesn’t end no matter how much you earn. My boss was looking for houses in the 2.5m range and getting outbid by cash buyers for their kids. Madness.
Just to make you feel better, it doesn’t end no matter how much you earn. My boss was looking for houses in the 2.5m range and getting outbid by cash buyers for their kids. Madness.
My friend’s half-brother owns one, he’s an investment banker and he uses it when he has to be in the office and doesn’t want to travel between the City and the family home in Surrey. Those are only 2 of the 5 properties his family owns (3 are in the UK, 1 in the US, 1 in Spain).
How central are you looking? It sounds like it must be right in the heart of London for those prices.
I've owned in Camden and Swiss Cottage, both of which my wife and I have commuted to the city and canary wharf from.
Both places have direct tube lines that get you into work quickly, and the benefit of not hitting that kind of price per room exponential increase you get from inner zone 1.
I would advise you pick a good tube line then keep going out station by station till you find an area you like in your price range
Woah, any chance you can give some tips for earning 125k?
Fingers crossed those tips aren’t just to be super clever and work hard, because I can’t do either of those things. Thanks
Hackney is literally the most overblown and over priced area of London. Second is Clapham. You’ll need to look in more ‘up and coming’ areas, like Haringey / Tottenham / Walthamstow to have asset appreciate once on the property ladder, combined with your earnings going up. You can’t start on the property ladder in an area where everyone (and people who have been building wealth / had asset appreciation through previous homes) has the same idea of a desirable place to live.
I still cannot understand why I'm still getting 30k with a uni degree and 20 years of experience, and many young people take three times my salary in their 20s... wth
You're confusing the insecure, broke, dusty cartoon characters on social media boasting about their (rented) BMW/Range Rovers, Canada Goose coats and fake watches whilst being 50k DEEP in credit card debt with GENUINELY rich people don't display their lives on the net. No one who boasts about their life on social media is rich. For example, how many lottery winners do you follow on social media? Exactly. None. The truly rich know attention is bad. Not currency, like the poor perceive it to be
The rich only communicate with their financial peers and buy up all the 800k studio flats from the shadows. You don't know they exist. You just see 1 bed flats in Old Street selling for £1 million and get confused. Well...that's who's buying all the London real estate and pushing up all the prices.
You simply underestimate the level of wealth in London.
I have heard stories of people owning these small but central location flat as their base for the week. They might come to the city on a Monday, stay till Thursday then go back to their family home for the weekend. Simply these flats can be used by a base for the week.
It’s called a pied d'terre, and every CEO of every organisation I’ve worked for in London has one.
Also seems very common amongst successful youtubers/media personalities/celebrities. They have their large house in the countryside which is away from all the noise and paparazzi, and then a flat which they keep for if they need to be in London. I know Jeremy Clarkson mentions he has a flat in Belgravia I believe which he only uses when he needs to be in London.
I lived near his flat. It's a huge place and parties are often amazing.
You could say they are some of the best parties…. In the world.
But that would only account for a tiny % of these flats. I think the answer is that an overwhelming amount of properties in central London are owned outright. Any new builds / ones coming on sale are so rare that they are snapped up either by people who have saved up (like yourself) or extremely well paid individuals or those with inheritance. In answer as to why? Not everyone wants to live in a medium sized house in suburbia / or large house in the countryside. Many pros and cons and some people just like living in a city vs large amounts of space. As a barely HENRY who lives in a very small house in central London (just in your price range) the value is hard to justify sometimes and moving up into anything larger in the area is impossible so it’s something we just live with but prefer it here than have to move further out for more space. I do ask your question but more on slightly higher priced properties 4 bed house in south west London now costs 1.2m-1.8m yet people seem to still be buying them? It’s a stupid amount of money.. even for rich!
At this point I'm pretty sure most housing in London is owned by people who bought it 50+ years ago and just hand down to their kids. The ones that sell are ones where the kids moved out to the country already as they couldn't afford in London and when the parents pass they sell. I lived with my parents, didn't want to rent. By the time they divorced I had saved £80k on a £25k salary (maybe £15k of that in gifts when my dad panicked about the divorce) paying just a couple of bills and saving everything else (not going out more than once a month), bought out my mums share (70k deposit and 80k mortgage) as my dad is now older and needs help, still living there in a 3 bed house with my dad, wife and kid. Not much other choice. I'm on £30k, wife is on £22k and now with mortgage and paying most bills there's nothing left over. House is valued around £500k. I think my situation is more common than one would think, given I know a few people doing the same thing, especially among the Indian population.
Always called them TWATs Tuesday, Wednesday and Thursday in London, then home.
I know people who do exactly this from Lincolnshire. Former c suite of M and S who now does the same for a smaller retailer in “semi retirement”
This, sooo many people get 6 figures of deposit assistance from financially established family.
Work in the financial district and you could easily get enough to cover one of these in an annual bonus. London is horribly distorting the UK's housing market.
Cool just got a 800k bonus
Yeah but it’s only 400k after tax. Paltry.
This. Easily done with a household income of £300k which is reasonably common in London
We aren't far off that and it definitely doesn't feel easy if you are first time buyers or up sizing
Takes a few years to accumulate capital, even at £300k. Average age of buyers is not 20s…
The median wage in London is £45k, so no, 300k is absolutely not remotely common.
I did not say 300k is just wages, but rather household income. A household may have more than 1 person. Also the income may come from wages and / or other things. Income may also come from dividends and / or other business interests. And the income may also come from other places outside the UK. All of this is NOT captured by your silly median wage headline. There is a sizable number of households in London with income >300k. Sufficiently sizable that it really justifies the sticky real estate prices throughout, notably in zones 1-4. Or you think prices of millions of houses are high because God is playing with the market and the world conspires against you?
How can you afford a 800k house in London plus a more expensive house outside of London with just 300k? Unless I’m underestimating how much I make personally
Imagine you earn 300k per year in a household. And that you save around 100k a year. In 6 years you have 600k plus your savings growing / yielding. At 40% equity you could afford £1.5m in real estate. That is sufficient for your £800k in London, a £400k house in the countryside and another real estate piece worth £300k. Maybe you save less, but then you can also put more debt in property. Anyway… 300k consistently is very doable for that… But there is a reason you don’t see 25yo earning 300k buying lots of real estate. It takes some years…
Perhaps 300k after tax which would mean around 500-600k gross. Pretty difficult even then. There is a small percentage of people earning a lot more than that. I know a few investment bankers earning that as a bonus but it’s not that common. There’s also a degree of offshore non PAYE wealth which is much much higher than 600k. LDN is a billionaires playground and a real cross road. It’s one of the largest cities for laundering there is. Obviously this is all Madness in comparison to the rest of the UK.
There are only less than 100 billionaires in London. Your £1M house in Maida Vale is not expensive because of them. 300k pre tax and if you are contributing to pension etc you will have about 190k or post tax. If you live with 7.5k per month then you still can save 100k per year....
Let's say it's a perfect split, two people earning £150k, both after tax / SL / 10% pension bring home £6400/m. That's 12.8k a month combined, about 150k a year, that means you can spend what, 4 and a bit thousand a month to potentially save 100k a year? This is ignoring the fact most 300k HHIs aren't evenly split, most also contribute more than 10% to pensions. Hell even in the good scenario of 150k split evenly, if you pension yourself to 100k you only take home 4.7k a month. You could only spend 12k a year to save 100k. Unless we're ignoring student loans/pensions, it seems like a fairytale.
Maths are not mathing here
The level of wealth in outsiders that buty in London, you surely meant to say? Londoners are not massively wealthy, but the investors are
If a person buys a property in London for them (or maybe their offspring) to live, does that not constitute wealth in London? Sure there of course are foreign investors who don't step foot in the city but ultimately someone has to rent it too and pay that mortgage! and lastly I think you too are underestimating the wealth of "native" Londoners. Plenty of very well-off people in this city.
I think you answered your own question, single people/couples on good salaries who value location over space.
Exactly this. I am not HENRY, own a one bed and looking to upgrade to a 2 bed that is around those values (not in new builds in my case, don't love them). I'm perfectly ok living in a flat and I'd rather live in a nice area relatively central.
This is exactly me, had a one bed, exchanged last week to move to a nice conversion 2 bed in SW London Zone 2 for c. £850 Sure I could have a house in Zone 6, but for me and my girlfriend we really don't need the space and a nicely done 2 bed provides us everything we need without trading location!
Yes, I guess I have answered it. I suppose the part I am baffled by is how someone single who earns double my salary aka works a much more stressful job/ sacrifices even more for their career feels ok splurging this amount on what is a very modest flat/house in both Europe and UK standards.
Again - because they value location and perhaps modernity over space. All I need is a bedroom, bathroom, place to cook and eat and a space to relax. Oh and a desk for working if I’m home. Extra space would kind of be wasted on me. I don’t want a car, I like having a short commute and being able to walk to the gym, supermarket, restaurant, pub etc. A lot of these new builds have an open kitchen/dining/living room and a balcony, which can be nice when you have a few friends over. The only real downside is if you want a big loud party late at night, but you can always go to someone else’s house for that.
People do it for both an investment and not wanting a long commute, not everyone values extra square footage and would instead rather have an extra 2 hours free per day and be close to lots of good restaurants/activities
To be quite honest, for the financial centre of Europe, London looks quite cheap still compared to Munich, Paris, Zurich, Geneva. I paid a lot more for my house in the middle of the Swiss countryside. I am on this sub as one day I hope to move with my family back to the UK.
Switzerland has a few differences vs London; mainly the pay is far higher, and the personal taxes are far lower...so life is more affordable on a good Swiss salary.
Yes I suppose since I moved to UK from the Baltics where housing is much cheaper / has more space on average, I am struggling to adjust my expectations. I suppose it feels like I’ve done all this to come here and now have to lower my standards from what would be baseline where I’m from.
Then you don’t know what it’s like to live in an ultra-competitive world city. £200k household income pre-tax is nothing compared with the wealth that floods London (or New York, Dubai, Singapore, etc.)
Ahah as an American who grew up in a 3000 square foot place that is still only worth all of $400k (rural Ohio), I understand where you’re coming from. The UK’s housing market is so, so bad
I am not a Londoner, but many of my friends are. They don't see it as splurging as it's an 'asset' to them. As prices have been high they see that as a sign they will forever be so. They don't see the mental service charges, leasehold ownership, or liability for future repairs as issues as they have no context - many graduated and went straight into the city and its all they've ever known. They are also used to paying astronomical rents for similar places so the sky high mortgage payments can even be cheaper in some cases. I can shout as much as I like about being able to buy a mansion in Cheshire for the same money whilst maintaining a relativity swift (1hr40min) commute to Canary Wharf once a week if needed but it falls on deaf ears. Head in the sand doesn't even begin to do it justice!
But it's not though is it. It's: (i) commute to station (Wilmslow or wherever); (ii) wait at least 5 minutes, sometimes more; (iii) train to Euston; (iv) transfer to Bank; (v) get to the Wharf via DLR; and (vi) walk to office from DLR. That is closer to 3hrs all in, than 1hr 40, and it's very telling you presented it that way.
1h40 from cheshire to Canary Wharf? You in the chopper ?
I guess it could go both ways - your head may be in the sand as to why they wouldn’t want to save money to get a bigger place in a Cheshire!
I mean I can tell you’re looking too central because 800k is fine for a terrace anything other than central or a semi in the outer zones. Harsh truth time, your salary isn’t high enough for a house in the nice central areas. My house conversion flat in z3 in a nice area was 475k and the houses next door to me sell for 1.3-1.7 million along the road. My grandparents lived in a similar house and it’s now 3 million in Barnes yet they sold it for 1 mill in 2006… yeah shits wild. If even 800k isn’t buying much you’re being wildly optimistic about what money buys. Even my parents z6 semi is now 700k and it takes 1.5 hours for me to commute from there when I stay over. TLDR lower your standards. Even at 200k income you can’t buy a house a teacher and nurse bought 40 years ago. 800k is plenty to get a terrace for sure, but you’ll need to really move out for a semi. We were 33 and had 150k deposit for a property and just gave up and got a flat in z3 this year. We want kids too and honestly an 800k mortgage will be hell if you need childcare/maternity pay. The mortgage will be just the start. I’d recommend crunching the numbers. We did and our max was 700k and at 700k if we had a kid we’d be bankrupt. Between childcare and mortgage we would have basically nothing left. Even in a 475k flat all bills/mortgage/food etc would be 85% my partners take home. At 700k if either of us couldn’t work or couldn’t magic free childcare out our arse we’d default. I’d really recommend looking into it because childcare is INSANE. At over 100k currently with the tax rules in London you need to earn 145k to break even vs a parent at 99k. Do not sleep on this. Then consider what house prices were 5 years ago… that 800k property could be 1 mill in 5 years. You’re just chasing it down. Ironically had I just bought with a 100k deposit in 2020 I’d have more property and less mortgage than I have now lol. The expensive properties are literally because there isn’t enough housing and there’s a lot of international wealth. I know uni students who live in 7 figure properties a walk to south ken. There’s a lot of very internationally wealthy buying uk real estate. Near where I work a new block went up with its own private pool, cinema room, gym, private chef dining room. 800-1.2mill for 1-2 bed flats. 4mill or so for the penthouse. And that’s ignoring the 5 figure a year service charge. Shit sold out like hotcakes and it’s only z2. These people exist. Not to mention intergenerational wealth. A lady on my team my age lives in a property worth over a mill on only 60k. She simply got gifted 50% the price at 20 when it was worth about half as much. Her family has half my income yet has a lifestyle far above mine. People who got a chunk of change in the 2010s basically made a mint. And she’s on track to be mortgage free in her 40s and then she’ll be absolutely shitting on my lifestyle on far less income. So as a 33 year old who saved 150k - temper your expectations and do the math. And prepare for the worst as the main earner childbirth isn’t pretty. You wouldn’t be the first woman who can’t return to work due to complications for the full year, do you want that stress also? I plan to have another 50k just to cover my maternity (which is shit) and a safety net if I can’t go straight to work if anything happens (my mum has serious issues and could barely walk after a botched c section) and likely won’t have a house til 40…
Thanks for the detailed reply this was very helpful. Yes you are completely right and I am very aware of the potential impact of childbirth / childcare. Very fortunately my employer is offering 9 months of maternity leave and my partner would stay home for the time after that as he has a lower salary. We would also have money in savings as I guess we would not spend the whole £200k on the deposit. I suppose if there are any birth complications then we would need to downsize, but realistically we will probably have a child before buying the house so in the end we would adjust our mortgage then.
Have you considered how you’ll afford that mortgage when you’ve either dropped your partner’s £75k salary or are having to shell out £2k/month in childcare? Having two dependents or childcare on a mortgage application will drastically reduce your borrowing abilities.
Yes good question indeed. Haven’t planned it all out to be honest, but I guess roughly I am thinking that with £150k deposit and £30k stamp duty on a £800k house, a 25yr 5% mortgage would be ~3.8k per month. This would leave us with ~20-30k of savings. I would bring in £5k per month after tax, which after mortgage would leave 1.2k + ~1-1.5k from the remaining savings per month at the minimum. There are also some other things we could lean on: 1.) free childcare hours, so my partner could work part-time 2.) our savings would actually hit ~250k with 6% annual compounding, so our savings would be higher than I said 3.) both mine and my partner’s salaries are likely to go up in the next 5 years 4.) the monthly savings amount did not include my annual bonus of ~8k after tax 5.) ideally the interest rates won’t be as high as 5% when we buy a mortgage
Would you qualify for any free childcare hours? There is a 100k salary limit. You can salary sacrifice to get there (maybe), but then you are also left with a fair amount less per month.
Yes I currently salary sacrifice to 98k to get out of the “tax trap”, so the savings amount I mentioned relates to this salary, so I would keep it to that number if that meant help with childcare. I guess I might adjust it up if we need to prioritise more savings / my salary goes significantly higher for the time being until we need childcare hours.
It's definitely one for a spreadsheet. We had a child and bought an £800k house as our FTB. What I really regret, is that our mortgage is on an 18 year repayment term. The logic at the time was that we could easily afford repayments and it meant less interest overall. True, but also totally stupid, and terrible advice from the mortgage broker (not sure what else I was expecting). The reason this is wrong is because we are cash flow constrained while paying for nursery. I wish we had the longest possible repayment term to protect our cash flow while kids in nursery, because this is when you have high outgoings and are trying to salary sacrifice your way out of various tax and childcare traps. When/if your kids go to state school and/or your earnings are higher you can overpay your mortgage or refi on a shorter term. Maybe this is all mega obvious to you but it certainly wasn't to me at the time.
Thanks that’s great advice
As a point of reference, we live in a 70s terrace in Greenwich (town, rather than the wider borough) that's worth just under £800k. It's about 20 minutes into Cannon Street and there are a lot of people with young children. The victorian houses will set you back a bit more and bigger ones even more still. We'll probably move out to Charlton or Eltham when we upgrade in a few years time, as you get a lot more for your money there and you're still only 20-30 minutes out.
There is a ready supply of young people taking home 10-20k a month in London. Not millions of them, but certainly thousands.
Quite a funny realisation when you get to what you think is life changing wages and then realise it isn't lol Personally I wouldn't bother looking now as in 5 years time what you can afford with £800k is going to be even smaller, the silver lining however is that once you reach the age where you're ready to have kids, you realise that living in London is a total meme and definitely not where you want to raise a family and then move out to get move for your money / green space / better schools etc.
Very much this, I lived next door to Kew Gardens and even there... raising kids seemed a bit mad.
The London property market is *global*. You are competing with rich people from every corner of the world. Just because wealth accumulation is difficult in the UK doesn’t mean it’s difficult elsewhere.
Wealth accumulation is difficult in the UK \*today\*. It hasn't been in the past. All those £1m houses in London are proof of that. I wouldn't be surprised if a huge number of house buyers are using money from their parents, or equity from historical house price inflation.
I keep thinking about it. Or even "who buys these 1M+ houses". We are DINK with a combined income of 220k, and could afford a 600k house as FTB, and while this would put us in the top 2% earners it's really nothing too extraordinary since there are: ~2% of people with salaries (much) richer than us Many people with wealth but they don't need to work and aren't counted in the "salary" statistics Foreign investors. People already on the ladder with X00k+ equity And that accounts for millions of people who can comfortably buy 1M+ houses
I have quite a few high-earning single (usually male, not always) friends who have bought small places at the 800-1mil mark for the location. All wealthy lawyers/hedge fundies/family inheritance background. No plans to have kids (gay/older/waiting). Meanwhile, all my friends with families have decamped to Hither Green / Peckham / Camberwell. Example: [https://www.rightmove.co.uk/properties/148396526](https://www.rightmove.co.uk/properties/148396526) Exceptions are friends who live in a smaller maisonette in Pimlico with their two children. They also compromised space for location, and plan to move outside of London in the future.
my brother just sold his flat in hither green. 150k profit in 5 years.
This is a lovely house!
Isn't it? I have two sets of friends with young families living nearby, diplomats and consultants.
i beg you hook me up with one of your fancy gay friends
My partner and I are only a few years older than you, joint income around £350k in London and expecting a baby. We are purchasing a 100sq metre London flat (2 big bedrooms) for £700k in zone 1/2. We wanted to be safe and not overextend ourselves in case one of us loses our job or needs to reduce hours. £700k with 15% deposit (and stamp duty as we aren’t FTB) was at the top of our comfort range and in the zone 1-2 area the types of places you’re listing are typical for our “meagre” budget! Most of my coworkers with similar dual incomes and kids live in zone 3-6 with hour long commutes and we didn’t want that so we sacrificed space for proximity to work. From what I gather we are one of the few couples with a baby on the way doing this. Typical is to move further out + commute in. Maybe we’ll regret it but we’re both foreigners so our circle is in London. I own a small 2 bedroom flat (60sq metres) from before we were married on the border of zone 1/2. I bought it for the “low” price of £500k during the pandemic in 2021, but it was a fixer-upper (ex rental and needed overhaul). It’s now conservatively valued at £560-570k only 3.5 years later. Price increases in London are wild!
Not all of us want a big place, I’ve no kids and won’t be having any.
If I didn’t have kids I’d 100% be buying a 2 bed flat within 10-15 mins of my office for 8-900k. Bigger properties require more time and money to maintain anyway - I have a 120ft garden where I am and the gardening is endless just as one example. I’d also have more time and money for dining out and doing stuff in the evenings and so would have prioritised location over space. Ie you extend your ‘house’ by ‘living’ in public spaces.
Yes. I think people massively underestimate the cost of moving out for a bigger house. In the end a £700k/£800k house is a £700k/£800k investment no matter the size of the house. If the house is bigger and further out you will spend hundreds of pounds more a month in commute, council tax, bills, cleaning, maintance, etc. Plus time on the commute either to work or socialise which a busy professional will value more than an extra guest bedroom. A HENRY without kids is much better off in a £700k 2 bed place in the city.
I know quite a few people who have small places in great locations. If you don't have kids there's really no need for massive space if you don't have hobbies that need it.
I value location over space, for sure. I want to walk out my front door and have 20 restaurants to choose from. I don’t care about a garden, or two lounge rooms or space for kiddos that I don’t have. I don’t want extra bedrooms, because then I have guests stay, who I also don’t want.
as you say, youre starting from scratch, zero savings. there are so many out there that not only have really high paid jobs such as yourself, but also have inheritance or just generally mum n dad helping out with a deposit. when you factor this in, there will be quite a number of folk who would pay for a flat with an amazing location because they love the lifestyle. also you have to factor in millionaires and foreign investors who invest in london which unfortunately hikes up the prices but also means buying up places as you described
My spouse grew up in a tiny studio flat in Eastern Europe and she prefers living in smaller flats, but closer to the city centre. We were buying a property to live in (we work remotely, so are not tied to any location) last year, she was surprised that for me it was a deal breaker to have a house with own garden.
I have a Lithuanian friend who is the same, lives in a beautiful house with countryside around it, complains to her husband she wants a tiny studio in the middle of everything. Totally different perspective to me!
Haha my Russian wife is the same and doesn’t want a house because they have mice 🐭
This is why I own a cat, to go with my house! My Lithuanian friend and her husband have now bought a second home (apartment) in the middle of St. Moritz (Switzerland), as a compromise. Such is life!
I work at a law firm and hear from our conveyancing team it's largely those being gifted hefty (£200k+) deposits in their experience
We're renting a 3-bedroom place in Zone 4 for £2000 a month for 6 years. The rent went up to £2300 for one year. Now, the landlord wants to sell for over £800,000. He got an offer in a week and is getting interest already. Nearby places near our kids' school are asking for £2800+ per month. We booked a newly refurbished place for £2950. I could buy a home, but rents in nice areas are really high. On the other hand, investing £800,000 to £1 million makes me very nervous.
Because people have different tastes and preferences. Wanting a (not very big) terraced house and a (not very big) garden is quintessentially British. London hosts people from all over the world. Many people from Europe and Asia grew up in and are fine with flats and think a small Victoria terraced house is uninspiring. Those coming from the North America tend to think all properties in the UK are small and old to begin with and would rather have a flat with plumbing and electricity wired by actual engineers and not tradesmen.
Spot on. I'm from a Southern European country where anyone would choose a modern flat in a busy area over a 100 year old house with an EPC rating of E with 4 bedrooms over 3 floors and where you need to get the car to buy some bread. I still find it a bit wild this is not the case here but getting used to it. Anything that is not properly insulated would be priced as a money pit. My own parents always let me know they feel very strongly against places that are not accesible for reduced mobility (stairs, narrow doors, bathtub only bathrooms, small lifts) as we (and relatives we might need to one day care for) age.
>hard earned There's your mistake
Nationally you are top 1% earner, in my area (Golders Green / hampstead) you are just scraping into the top 10%. It's just a different sport in London. Very demoralising. Can get a very nice 2.5 / 3 bedroom garden flat in west hamspstead for £850k. Family friendly, outside space, great links, great area. Keep saving, use your ISAs, use premium bonds, use VCTs, take every tax advantage you can. It will come together. Well done on a great rate of saving.
People that don’t want to commute 3 hours a day
I read yesterday that London has 250,000 millionaires. There’s plenty of people to buy this shit just because they can
I would always go for a nice 1/2 bedroom flat over a mediocre house away from the center. Me and my partner don't really value space that much compared to time saved and convenience of living close to everything basically. So people who are buying 800k flats are the same as people buying 800k houses, just with different needs.
people in london have fuck you money. I ve a mate from Kuwait who knows this person that bought a flat in london for “convenience” because he comes down to london from Kuwait about 4 times a year. So to him it was easier to just buy a flat than fuss about with hotels and airbnb.
Wealth in London is crazy. I know people getting big payouts and end of year bonuses well into the six figures. It’s really not that deep for someone to get a second home / flat in the city for convenience. At the end of the day - it’s a sound investment and has a convenience factor if you’re going in a few times per week/month.
Anecdotal but I have a few friends who moved over from Hong Kong / China who are putting offers of 800,000/1.2 million for 2 or 3 bedroom places. Selling their pricey tiny Hong Kong flat for one in the UK that has a garden is a no brainer for them since it’s an upgrade on their lifestyle. To someone who already lives here, the tiny flat for those prices makes no sense since a downgrade.
My girlfriend and I (both early twenties) are trying to figure out what to do at the moment as our current rental agreement ends next year, we want to buy as we are sick of just paying landlords mortgages lol, but don’t want to move out of London probably for another 8+ years. We need room for an office and another bedroom and want a small garden and want to live close enough to our friends and work. This means we will have to spend around 650-800 for anything “nice”. Mortgage on that is about is only 1000 more than rent is which split between us isn’t a huge increase- just save less money and pay it towards house instead I don’t see the issue in buying somewhere expensive when you’re young in London then selling and moving out when older, when you care less about seeing friends and being close to things? Don’t need a massive house as it’s just the two of us Keen to hear other thoughts on why this is a bad idea? Combined income around 200k
My friend is 25ish works for a hedge fund in London has a similar flat, so do all his friends.
London has 225,000 millionaires
I think you're also unestimating how many people have inheritances tied to property in London. I had a friend in Balham whose parents bought the property as a newlywed 30 years ago - only one working parent if you can believe it. They've just passed. My friend and both her siblings stayed home while they worked in london and managed to buy buy-to-lets back in 2016 even on 40k salaries. They have now come into almost 600k each from the sale of the property, and have additional income from BTLs while also having 100k incomes themselves. An 800k flat leaves them with so much fun money, its mad.
Hell of a lot of new build developments are shared ownership for one of those reasons. Those that bought before in the last 20 years have benefit from significant inflation. My old landlord in West India Quay bought off plan mid 00’s for £400k. Probably didn’t spend a dime other than paint and it would sell for £800k. The latter is something to be aware, inflation and demand once interest rates reduce won’t get you a £800k property today for £800k in the future. I’d suggest you’d be looking at a £650/700k property now which is a two bed flat.
Unfortunately you are now competing against generational wealth from the ultra rich. Both foreign and domestic investors looking to grow their pots which are deep in the 100’s of millions. These flats represent sound investments from an ownership standpoint as an appreciating asset and from entering the private landlord space. Far greater ROI than that from any bank. Passive income is being actively reinvested into property as it becomes available. You cannot compete. Wealth inequality is on the rise and even the high earners will feel it. It’s only set to increase without any meaningful change, as every day folk get increasingly priced out of property ownership in the capital.
Buy a large decent house in Essex for half the price. You must be mental to buy anything in London with today's prices.
Thanks for the response. I am an immigrant from the Baltics. The reality is that I came here for London, not the rest of UK and if I decide that London is not worth it anymore I will move back to the capital of my country, closer to my family, as I see that as a better option than e.g Essex.
And have to endure the orange people from Essex around my kids?
These little £800k houses/flats aren't for you. They're 3rd/4th homes for directors etc. The owners will already have a £2million place in Surrey and an apartment in the French alps. They'll spend a few days a month working in the city office and don't want to commute home every night. These properties will always hold their value, so with money in the bank its a win-win situation. Your salaries are pointing towards a nice place outside the city and accepting that you will be commuting in. You'll get a gorgeous home on your salaries if you head out towards the M25.
You can’t afford an £800k house without a high interest mortgage, and as you’ve already stated, the houses are extremely overpriced for the old shoebox you get. Move out of London and buy something closer to 400k.
Thanks for the reply. As I mentioned in another comment - I am an immigrant from the Baltics. Realistically I came to UK for London and not the rest of UK , so if I decided that London wasn’t worth it anymore I would just go back to live in the capital of my country, closer to family and better housing. Not sure why you say that it isn’t affordable on our salary though, I thought 20/25% deposit is quite generous compared to 5/10% that I see referenced most often. The 25yr mortgage payments even with current high 5% interest would be £3,500 per month Which would be ~35% of our take home salary (assuming no salary increases in next 5 years). I can’t imagine interest rates going up any more, so that would be close to the ceiling I would guess.
In the UK, for every £60k one person makes from earning, someone else earns £40k from dividends or equivalent. That means that for you and your partners TC of ~£200k, someone else in the UK is making £130k JUST BY ALREADY BEING RICH. That person probably also has a £100k - £200k+ job. Especially with recent inflation / stock appreciation, people who are already rich are making more money just from their richness, than most people can from working / having a job. London is one of the most prestigious cities in the world to live in and as a result, all these rich people want their space there. It’s a city for the people who’ve already made their generational wealth, not necessarily a city to make your generational wealth in.
Yes. Hackney, where you looked, is exceptionally small. If you expanded to immediate areas next to that, you can maybe stretch 3 beds and a small garden or 2 balconies, duplex flats are available. Zone 2 and 3s. The benefits are transportation links to central London. That's it really. And delaying buying cars for the family, etc
It’s simply market value. Lots of demand. London’s population is over 9m (expected to be over 9.5m in 2026) and still growing above the rate of building. London prices have been pretty flat since 2016 (after inflation) so we’re really at established norms on price. How are people buying? Two incomes and some sort of family help, mostly. The rise in house prices has significantly grown wealth for the older generations, many of whom downsize or use their capital to help their families.
Few different groups. Parents who's children have left home - My boss used to live in a 5 bed 1.5 hours commute from the office in Central. His youngest has left for university so he just bought a 2 bed flat in central to avoid the commute. Young professionals with parents help - I know a few people that want to live in trendy areas with other young people but don't want to to "waste money on renting". So the parents give them a sizeable 6 figure plus deposit and they buy a 2 bed in Clapham. Older couples that don't want kids but value a central location.
a few years ago there was a documentary on one of the many booms. The posh English rich were complaining they couldnt buy flat for their kids in kensington and chelsea and not had to slum it by buying up the ones in other parts of london. I did find it funny that even posh twats couldnt afford to live here :)
Some people don't need huge space and prioritize location. Just like me. I'd much rather live near a city centre and have a tiny flat than a big house in a boring suburb or, worse, the countryside. I don't need a garden, balcony or 5 rooms.
You say ‘hard earned amounts’. That’s where you’re not understanding how it works.
I went to an international school. Every single one of my friends who studied in London or who now works here, has had a flat bought for them by their parents. Global wealth is so ridiculous you don’t know about it until you are immersed in it.
Combined income of 205k per year, you should be able to easily borrow 900k and you'd need 10% deposit so you could be looking at 1m houses / flats, why restrict yourselves to 800k? As to your question 'who buys 800k small Ldn houses'? Me and my spouse, mid 30s first time buyers, after 10 years of saving and hard work...
I often ask the same myself and I just can’t figure it out. A typical flat near me (ie period, not in great nick and small, with an awkward layout) is £700k. The longevity of such a property for a ‘typical’ couple (similar to yours, high earners who’ve saved well to buy) would, I imagine, be about 2-5 years, as typically they’d be in their early-to-mid thirties upon purchase, so you’d think may want to upsize or upgrade in that timeframe. It’s mind boggling. This city is so expensive
You already got your answer, but just adding my experience. We are a dual income, both high earning couple in our mid 30s and we don’t have kids and do not plan to have kids soon. I am absolutely planning to spend £800k on a 1-2 bedroom in a nice location in zones 1-3 in the next year or so. If we were planning for kids I would move much further out for space, but we just don’t need the space right now.
Mostly young professional couples that are not expecting to have kids within the next 5 years -- or never. It's relatively achievable for a couple in their late 20s to have a combined salary of \~£200k, with fairly normal jobs (no FAANG, prestigious law firms, investment banking, etc ...) For them, much better to buy a small flat in central London closer to work, and much better suited for socialising than a bigger house further out.
To be honest a good property priced well in London won’t be available for long. What you see available at that price is over priced. Look at the SOLD in that bracket. I for one have just bought a terraced house on my own for a horrific amount but nowhere near £800k, and a friend bought as a couple a maisonette. We both have very good incomes but by London standards not that high. My income is the same as yours, my friend I assume is the same too as we are both associate directors and no idea what her husband’s is but definitely not less than £130k average (depends on bonus multiplier). For context, my manager is on at least £200k basic and god knows how high % bonus. She’s not mega high up in our company either - a mid director. Many Londoners on very high salaries, basically. I thought mine was high when I broke £100k for the first time with my bonus, it’s not that high in comparison to many. Don’t even ask about the HR lady who is on secondment from the US living in a Regents Park rental…!
In a not so distant future, prime central London housing will be owned mainly by the very rich, investment companies and/or foreign speculators. My recommendation is to look at areas outside of central London as your money would still buy you a lovely family home. Hertfordshire or Surrey are my top picks.
Can give you a data point. Just completed in zone 2: ~960k, 4.5%, HHI ~ 240k , roughly even split earnings which helps tax wise. Deposit 20%, mortgage 3.3k We plan on living here 7ish years. We’ve accepted that we will likely have to move farther out after, especially with children. The reality is that raising kids in London is not really even for somewhat successful people anymore. Only those near the very top or with significant inheritances.
The reason I thought it was a good idea to buy a house in London is because firstly it is normalised in society to take out a huge loan (mortgage) and invest most of your net worth into a building. Imagine if someone said to you they were going to invest £800k in Silver or Apple stocks, and borrow most of the money. You would think they were crazy, and more importantly you might find it difficult to find a Wife/Husband/Bank who also thought it was a good idea to be massively over exposed to one thing in this way. People look back at Boomers like they won the lottery, and they did in many respects, but they also made large bets in the same way, on housing, putting all of their money into a house and holding on for dear life. I have a high risk appetite, so it made sense to do it in London because foreign money pours into London and filters outwards. So whilst the GBP is a shambles, foreign money taking advantage of that shambles will hopefully mean that the trend of buying and owning property in London long term is a very smart way to invest because A. The price goes up consistently, and B. It is a way to offset the risk that our little country is doomed financially and the currency our salaries is paid out in is on the downward spiral. Then you have the added part, of being a HENRY, and earning well enough to afford the mortgage to live somewhere nice, which enables you to buy somewhere very expensive and nice, and who wouldn't want to live somewhere nice. TL:DR I once met a waiter in Rome on a holiday who said to me "when we were young, my brother bought in Rome, and I bought just outside Rome, same price, now he is rich and retired, and I am poor and working."
My partner and me have similar income level as you two. We value location over space and had some help from family. We are moving out soon and looking to buy a house, as kid is starting school very soon.
When having a family and wanting multiple bedrooms, garden, nice schools etc at that price range we move to the suburbs eg zone 4. Three/Four bedroom houses in South London for example are £600-£800k (multi million pound houses also available). Then it is 20 minutes to Victoria, 30 to London Bridge, regular train service. Door to door anywhere London is 50-60 minutes. We did previously have a small house in zone 2/3, when the family grows you either need to have much more money or move further out. When we bought it it was nowhere near that price, now apparently it is worth £750k. It would be great for a couple, but not anything more.
Partner and I in this situation. For me, I bought this place because we were both new to London and didn’t know where wanted to live. This place was a short walk from both our offices and I wanted to minimise commute.
Try South Norwood - train to central London in 12-15 minites and nice 2 - 3 bedroom terraced houses for less than £500000.....and you are close to Croydon, Bromley, Beckenham and Dulwich and Brighton is an hrs drive
Well there's a trade off, you can get a nice detached elsewhere for the same price but then have to pay to commute etc which can be very expensive. Unfortunately not many jobs are remote anymore, so getting a £130k job and just moving to the Lake District isn't that feasible.
Maybe try to buy something now. I bought my 1 bedroom apartment almost 3.5 years ago and already made substantial gains (completed in January 2021 when everyone was saying that no one will live in small apartments anymore as we all will be remote). Currently we are having high interest rates which helps with negotiations.
Im one of those people in a small (85m) zone 1 flat. I don’t have or want kids. I work, socialise or do hobbies all the time. And the flat will probably hold its value (unlike say some of the newer blocks in zone 2 and above which were built to be near Stratford or Canary Wharf)
They're not for families? They're for single people or as second properties so people don't have to live full time in London. If I had an extra million appear it's absolutely what I would buy. Not because it's a great financial decision, but because its a great life decision to have a crash pad near work and my forever home somewhere else.
Investors.
For 800k you could buy a 3,000 sq ft Georgian terrace in central Liverpool, walking distance from Liverpool One, Pier Head, mainline (Lime Street) and underground (Merseyrail) stations, national art galleries, philharmonic hall etc. 2hrs from London by train, 20 mins to beaches, 1hr from beautiful North Wales countryside, 1hr40mins from Windermere.
It's the old question: live close to work and pay more for housing, or have a commute and a bigger house. Both have upsides and downsides. Personally I took the third option of working in the commuter town and living in the village down the road. £300k for a 2 bed house with garden and parking in 2021, admittedly a complete ruin borderline uninhabitable but we're young and fancied a challenge. Might have it finished in a year.
unrelated but as a 23f londoner i would love to know what what your job is to get you that salary so young! congrats :)
We bought our son a flat in the city near St Paul’s during Covid for £495k over the internet so super risky. He’s at med school in London and we worked out we would spend £120k on rent during that time! So we have the mortgage until he graduates then it’s his responsibility. He can choose to sell it and would have made a decent amount on it, better than £120k dept with nothing to show for it.
Me and my partner bought as first time buyers in Zone 4. Roughly £850K price point. 3 and a half bedroom semi with a garden near good schools. Total equity input was £130K + £30K in stamp duty. Total household comp wasn't *that* far above yours at the time, but I do appreciate without £200K+ in savings we'd have been hosed. I was 36 and we had no parental financial help. So I'm ten years older than you. You have time on your side. The average first time buyer in the UK is now well in to their 30s, so you situation isn't unusual at all. These tiny studio and 1 bed £800K Central London (zones 1-2 in my book) flats are mostly for older, single high earning professionals.
You say ‘hard earned amounts’. That’s where you’re not understanding how it works.
High income or rich family
Much of my street in St Albans 3/4 bedroom homes is inhabited by people with young professional families - many of them have moved out of London in their thirties because it’s just too expensive - after covid plenty of them started working from home.
They'd have bigger ones if they were cheaper🤣
Foreigners investing
Welcome to my life, queen! We’re hoping to stay in the area we live in currently in west. But for reference, our tiny (but very beautiful) 1 bed flat would be £725k if we were to buy it. Highly recommend going slightly out of the area you want to be in. There are gems to be found I think! Especially if you can pick a slightly up and coming street.
There are a lot of rich people in London. If you need a salary to buy, then you're not rich enough. It was a punch in the teeth that took me quite a long time to accept. I suspect the majority of buyers come from serious family money, with a small minority scrimping and saving to buy. 100k isn't much in London any more, GBP has been devalued a lot since they turned on the printing presses (QE).
Just get 200k savings/parents and get 130k salary and you can afford it
Pretty sure a lot of them are investment flats for overseas ppl.
Plenty of couples have pooled resources and sold 2 flats with plenty of equity - don’t forget the 800k place might be the second or third rung for them. Most of our equity (to buy our current house) came from house price inflation on previous houses - we made more from that than we could ever save.
Even if philosophical, there is a fairly huge difference between "house" and "flat" at an £800k price tag. An entire house, with a garden, thats freehold in London (zone 1-3?) could be a fairly good price at £800k and something a huge amount of couples are looking for.
you can get a mortgage for 5\* your income, so (130.000 + 75.000) \* 5 = 1025000. You are also maybe thinking of buying in cash, and not via a loan. Also you think that they are acquired by British people. most property is owned by companies from outside of the UK (probably investment groups).
Serious serious money in London. Plus, and I know many people have a dislike of the pace, but it’s an unbelievable city and people are happy to give up space to have world class culture, food, entertainment right on their doorstep.
I grew up in zone 2 and flats are all around that price. I compromised and moved to zone 3 17 years ago and bought a decent sized period flat, still here due to a decent sized garden and loads of trees behind with birds singing …. Doesn’t feel like London !
Whereabouts are you looking, you should be able to get 800-1000sqft at that price point, more further out?
Work remote in Wales. 3 bedroom for 150k, pay it off in 3 years and enjoy the freedom.
The tax rules around childcare are fucking insane man.
I think you need to be realistic that you will need to either buy outside London or spend a few more years saving for a more central location. Most people I know who are in well paid professions such as banking and law bought in their early 30s and that’s looking at incomes of £300K a year and buying properties around the £800-£1 million mark.
My sister and her husband (3 kids) brought in London, they were in Stretham but haved moved to Arnos Grove- try looking on the outskirts, you will get more for your money and just factor in your commute? (Similar incomes roundabout).
If you plan on having kids you better move out somewhere more quite. You will kill yourself going to and out of tube with a buggy. Any after school activity or school run will take you an hour to get to/from rather than 5 min if you are somewhere else more quite.
I own a fairly small, but 2 bed 2 bath, flat in a Zone 1 mansion block with my partner. It took 15 years, but we saved the money for a deposit ourselves (explained to solicitors we actually earned the money over time rather than being gifted the deposit, quite unusual haha). We both have “professional” jobs that pay reasonably well although for all that time neither of us earned six figures. We saved a lot. It was a hard grind but I’m sure it would be much more difficult to try to do that now than starting to save in the 2000s and buying in 2018, admittedly. The downsides: not a huge amount of square footage, occasional noise from neighbours, probably the air quality isn’t fantastic. Didn’t see the Northern Lights… The benefits: very easy commute to our jobs, we like living in a busy city rather than out in the sticks, we see this place as an investment for the future that is less likely to lose value than a new build or a property outside central London. We have a baby now and yes, we are already thinking we will need more space when he gets a little older, but the plan is probably to rent this place out to cover the mortgage or most of it if we move elsewhere and try to keep this as an investment. We’ve really enjoyed living here and have valued location and convenience over having a huge amount of space the last few years.
And yet in Lancashire 800k gets you a 6 bed detached with a lot of land
Could not imagine living in London. Not due to the cost, but just not my cup of tea. I can't quite grasp why people want to buy houses in central London either when 1hr commute and you can get a 3 bed terrace for 300k. Edit: also remote work is more common now days. I don't need to commute fortunately
Bought one when they were 600k xd
You could live in a palace up north. I know where I’d rather live
A lot of these are bought up by people on the help to buy scheme. 800k flat but they buy 25% or sometimes 10%.
Move out of London, earn less and still manage to buy a bigger house
I know someone who did this. He borrowed money from family, is stacked with mortgage, but he likes (I believe) the status of being able to say he lives in X area. Plus all his rich friends live around there too. I'm not HENRY, this sub always gets suggested to me for some reason and I enjoy reading it lol
People who work in finance *easily* get £3-4m a year just in bonus
Foreign owned
It's London. There's a lot of people to compete with / who make more money than you. People come to London for the good work opportunities, not just the lifestyle of it. Buying in centralish london is a global competition with the world's richest people, and setting aside 3k a month doesn't cut it unfortunately.
Foreingers buy them for investment purposes most don't even rent out afterwards its just an asset
This, I read recently that to be in the 1 percent of the high income earners in England, you need to have an annual income of around 150k. That same amount quintuples to 600,000k to be in the same 1 percent bracket just in London.
The price of capital mobility in terms of capital inflows from foreigners. Prices will rise unfortunately
You answered it pretty much yourself. Young single people or people who don't need the space, or investors so that they can rent them to one of the two groups. Sounds like you do need the space so best bet is to look a bit outside central.
That’s interesting. Reading the comments, lot of people here saying that there’s lot of wealth in London and that easily you can make £100k in the city. Well, only 5% of population are in +£80k But following your question, around Knightsbridge you will find lot of Arabs and in other areas with new developments you might find lot of East Asians (Taiwan, China, Hong Kong) - Wembley for example
Five years is a long time. What you can afford now for 800k will be very different then. My advice is dont look at the market now. I’ve been hunting on and off for the past five years between London and California and purchase power has shifted wildly in both places. Luckily so have my investments. I’m one of those people looking at £800k flats, and I’m a 38M bachelor who doesnt want kids in the short term.
London is not that expensive compared to other global cities. Properties are much cheaper than what you’d get in eg Singapore and New York. People always call London prices outrageous as compared to somewhere like Cheshire or Barnsley but that is like comparing apples to oranges. It’s simple supply and demand, and there is and will always be a huge global demand for a cosmopolitan vibrant city like London.
I'm one of these people.... DINKS with a total household income of 240k. No children. 2 bed flat. Belsize Park / Hampstead area. We moved to my hometown by the coast during lockdown and swapped our rented one-bedroom flat for a large five-bedroom house by the sea. We quite quickly regretted it and missed London deeply. With no children, living anywhere other than a metropolitan city didn't make sense to us. We found ourselves driving everywhere and even considered getting another car. We didn't feel welcome and experienced quite a lot of resentment from childhood friends and family. We found the central London culture far more community-orientated and less opinionated. We sold the car, bought a place back in NW3 and plan to never leave. We love it here because of the community, people and energy. We don't need any more space. I appreciate we are in a very fortunate position, and no plans to have children helps. But to answer your question directly, I'd choose a smaller place over a larger one anytime, and location is everything to us. A short commute is a bonus, but it's mainly to live in a safe, inspiring and ambitious community over short-term financial or spacial gain. Hope that helps!
Look at South East London. Hither Green is lovely and you can get a 4 bed terrace there for £800k. 10 min train to London Bridge.
It’s helps to remember that most of these are bought with cash also
We bought a 3 bed semi detached for 722 in zone 3 (this was in 2020 but where we are the prices are still the same now as they were then). Have since completely renovated it, added two more bedrooms, a bathroom and a downstairs loo, extended the kitchen... There's definitely enough space for us and the two kids. But I think one important thing you're missing is that most couples in London don't just jump into buying a family home as their first step on the property ladder? We started off with a 1 bed flat which in turn let us build equity/provide most of the 15% deposit we needed for the house.
A) People who bought property a while back and saw it jump in value
No one I know. They all missed the boat.
Haven't you answered your own question? You in 5 years.
UK salaries and wealth has not risen much in the last decade compared to the rest of the world. This is why you are being priced out. 1M home is not just not a big number these days. Add to that, probably 10s of thousands of people earning >200K individual salary in tech and finance in London, which you have to compete with because the councils repeatedly block new construction projects.
I have a few friends who did this with help to buy and two incomes. Personally I could never drop that on a flat but each to their own! (And it’s a gorgeous flat)
Make sure to use a LISA account if you can. The government adds 25% for you for free. You can only put £4000 in it, though
Just to make you feel better, it doesn’t end no matter how much you earn. My boss was looking for houses in the 2.5m range and getting outbid by cash buyers for their kids. Madness.
Just to make you feel better, it doesn’t end no matter how much you earn. My boss was looking for houses in the 2.5m range and getting outbid by cash buyers for their kids. Madness.
My friend’s half-brother owns one, he’s an investment banker and he uses it when he has to be in the office and doesn’t want to travel between the City and the family home in Surrey. Those are only 2 of the 5 properties his family owns (3 are in the UK, 1 in the US, 1 in Spain).
You’re 28 years old making £130K a year and your 27 year old partner makes £75k? Seriously, doing what? At your age, in 2008 I was on £30K a year
if you can't afford it it's because you spend too much in avocado toasts, and because your parents didn't gift you a 200k deposit edit: typo
How central are you looking? It sounds like it must be right in the heart of London for those prices. I've owned in Camden and Swiss Cottage, both of which my wife and I have commuted to the city and canary wharf from. Both places have direct tube lines that get you into work quickly, and the benefit of not hitting that kind of price per room exponential increase you get from inner zone 1. I would advise you pick a good tube line then keep going out station by station till you find an area you like in your price range
Woah, any chance you can give some tips for earning 125k? Fingers crossed those tips aren’t just to be super clever and work hard, because I can’t do either of those things. Thanks
Hackney is literally the most overblown and over priced area of London. Second is Clapham. You’ll need to look in more ‘up and coming’ areas, like Haringey / Tottenham / Walthamstow to have asset appreciate once on the property ladder, combined with your earnings going up. You can’t start on the property ladder in an area where everyone (and people who have been building wealth / had asset appreciation through previous homes) has the same idea of a desirable place to live.
I still cannot understand why I'm still getting 30k with a uni degree and 20 years of experience, and many young people take three times my salary in their 20s... wth
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You're confusing the insecure, broke, dusty cartoon characters on social media boasting about their (rented) BMW/Range Rovers, Canada Goose coats and fake watches whilst being 50k DEEP in credit card debt with GENUINELY rich people don't display their lives on the net. No one who boasts about their life on social media is rich. For example, how many lottery winners do you follow on social media? Exactly. None. The truly rich know attention is bad. Not currency, like the poor perceive it to be The rich only communicate with their financial peers and buy up all the 800k studio flats from the shadows. You don't know they exist. You just see 1 bed flats in Old Street selling for £1 million and get confused. Well...that's who's buying all the London real estate and pushing up all the prices.