How do people afford expensive houses

oligopoly

IMO it's two main reasons - well paid jobs (often across two partners earning >£50k each) and inheritance.

Innys1

saverbuyer wrote: »

This helps immensely.


A few trips to Prague and a 600 mobile phone pale in comparison to the massive deposit required and average house prices moving 10% in one year. If the house you want to buy has gone up 2k in a month, the £30 gym membership isn't going to make that much of a dent. Especially when average salaries only go up 2%.


Well done, you bought. Some people do have the folks to help. Not everyone in London makes good money and really if you were born in the 50/60s you were really really lucky. Good pensions and cheap houses.

Spending that £30 at the gym isn't going to make that house any more affordable either - unless you plan to get a second job as a fitness trainer, for example.

Many young people seem to have given up the idea of owning and, instead, come to the conclusion that the money they would have spent on mortgage can instead be blown.

Fine, but then don't complain that you'll be renting for ever more because life is so "unfair".

Loanranger

The digital generation have an entirely different attitude towards life than the post war generations. The digital gen live for today and spend not just what they earn but borrow as well. Expensive wedding anyone?

Mostly people who work hard and increase their qualifications by continually updating their knowledge will earn more and thus be able to buy more expensive houses. Rocket science it ain't!

Loanranger

PS I worked at two jobs for most of my life, that helps as well.

Waterlily24

Mrs_pbradley936 wrote: »

We started off in 1968 with a house that cost around £10k. In those days what a woman earned was not taken into account and we had something called MIRAS:
https://en.wikipedia.org/wiki/Mortgage_interest_relief_at_source

House price inflation really kicked off from about the late 70s to early 80s.
A house that we bought for £32K in 1976 we sold for £145K in 1981. I think the reason for that was being allowed to (by then) take what a woman earned into the mortgage calculation. Being able to borrow a lot more meant that houses cost a lot more!

If I still had that house I expect it would fetch over £2 million - alas I do not! However the house we have now would sell for about £750K.

We are comfortably off but back when we started out we were considered to be about average and certainly not well off. We have good pensions, and could easily downsize to release equity if we needed to.

So my answer to your question is house price inflation being on their side.

Crikey that must have been a mansion, we bought our first house in 1968 too it cost £5,900 in an expensive area in North West Kent.

Baxter100

The bank of mum and dad.

saverbuyer

MandM90 wrote: »

My in laws house is worth 7 figures, they paid £113k 25 years ago (borrowing near enough all of that IIRC, and moving in there from the mobile home they lived in whilst saving). They've both worked their socks off, gone through a huge remortgage as main earner was off sick - cancer - and paid it back again.

Mum's house is work about 500 but she only earns 35k a year now. She rents out part of her home and is mortgage free so lives quite well. Again, I saw her go through years and years of sh*t to get this comfortable. When she bought her first house she rode a bike (no car) and had no furniture so when people came over they all sat on the floor.

Wouldn't say they've had it easy at all. I'm not saying everyone has to scrimp and save to afford houses, but that's how many people do. Not all people who were born in the 60s had 800k houses just fall into their laps and not all those who can't buy them lay blame on the previous generation.

And those people who worked so hard to earn 20k a year after tax had a house earning more than them.


Good luck to the people now on 35k a year buying a 500k house.

saverbuyer

Loanranger wrote: »

The digital generation have an entirely different attitude towards life than the post war generations. The digital gen live for today and spend not just what they earn but borrow as well. Expensive wedding anyone?

Mostly people who work hard and increase their qualifications by continually updating their knowledge will earn more and thus be able to buy more expensive houses. Rocket science it ain't!

Yeah and while the learn more and house prices rise by 10%. They are updating just to stay still. Must ask my Dad what extra qualification he had to get to earn more. Oh wait... He didn't have to. Not with the house earning £1,000 a month for him.

saverbuyer

oligopoly wrote: »

IMO it's two main reasons - well paid jobs (often across two partners earning >£50k each) and inheritance.

Bingo. That's it.

Mrs_pbradley936

Waterlily24 wrote: »

Crikey that must have been a mansion, we bought our first house in 1968 too it cost £5,900 in an expensive area in North West Kent.

Not a mansion but it was in London. At the time the choice was a cheaper house outside of London but then fares and time getting to work (for me university).