Now even City lawyers can’t afford to get onto the London property ladder

A training contract is not always enough to get you a mortgage

With first-time buyers of London homes now needing to fork out an average of £100,445 just to cover their deposit, even baggers of the most high-paying graduate jobs are struggling to get on the capital’s property ladder.

Go back a few years, and City law training contracts — with their generous pay and promise of future job security — used to be a fast-track route to home ownership in your 20s. But a London property boom that has seen new build one-beds in previously cheaper central areas such as Haggerston and Dalston on the market for as much as £750,000 means that a nice gaff without a long commute is now out of reach for many junior corporate solicitors.

Frustration has been bubbling over on social media, with millennials working in the City increasingly going public with their feelings on the matter. This tweet, by a London-based trainee solicitor, has been doing the rounds this week on social media.

In a series of later tweets, which have since been protected, the trainee went on to resist the claims often thrown around about millennials being entitled and lazy. She believes that younger people, burdened with tuition fee debt and an impossible housing market, are being forced to be even more hard-working than their older peers. Yet they still get labelled as the ‘snowflake generation’?!

The trainee doesn’t come from a wealthy background. With the profession’s increasing focus on social mobility and diversity, we’re sure there are hundreds of trainees and newly-qualified lawyers in her shoes.

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84 Comments

Anonymous

Let’s be realistic here. £50k p.a. as a trainee for 2 years, then progressing to significantly higher NQ earnings, a city lawyer is going to be more than able to get on to the housing ladder by their late 20s or early 30s at the very latest.

I have rather more sympathy for people working just as hard who don’t have a city job, and who are unlikely ever to be able to afford to buy a property.

(72)(9)
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anona

Not true. For a property costing £550k you will need around a £110k deposit (20%). Even if a mid-level was able to save £1,500 per month, it would take another 6 years to save the minimum deposit required. If they went straight through and qualified at 25, that means the earliest they can hope to buy a property in London would be at 31 years old. Bearing in mind that £550k will probably get you a 1 bedroom bedsit/studio flat in an undesirable location. It is extremely difficult to get onto the property ladder in London. Why would I work my a** off, save the deposit only to end up tied to a mortgage on a tiny 1 bed bedsit? Better of saving my money and then moving out of London.

(16)(6)
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Anonymous

That’s why there are schemes like help to buy available. Even so, the normal deposit is 10%, not 20%. Anyone who seriously wants to get on the property market can compromise and buy something much less than the figure you quote too.

(6)(2)
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Anonymous

Except not all mortgages need a 20% deposit (we are back to the days of 95%+ mortgages), and with government help to buy schemes for first time buyers, there is a fair amount of support or options if you haven’t got £100k spare.

(6)(1)
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Anonymous

Not true anona , there are 1/2 bed flats about 20 mins from the City for 400/500k , and in most cases with a prestigious job such as a lawyer you could do it with a 60k deposit .

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LL and P

Most people complaining want to buy something within 20 mins commute of work. That’s their idea of a struggle, it’s quite pathetic. Most City juniors could buy a flat in the suburbs for 400k with some change. Commute is maybe 45 mins plus but it’s not a big deal. However what they want is the right to buy in Islington or Clapham.

The real losers in this property debacle are families on less than 50k combined or professionals who are just as qualified who perhaps go into other areas like teaching in London or research. Those guys are suffering not some jumped up trainee who is complaining that her Oxford degree doesn’t give her the right to buy an effing flat where she wants.

(16)(6)
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Anonymous

I take your point, but when you’re working 70 hour weeks – as many of us in the City regularly do – it’s actually quite important to have a place reasonably close to work. Most partners have at least a bolthole in London as well if they have a large house in the commuter belt. Trainees simply accept we have to pay a large chunk of our salary in rent if we want anything resembling a life outside of work.

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Cleary Gottlieb NQ

1 bed flat on average sells for £800k in Aldgate/Whitechapel- not even central London. That’s how ridiculous property prices are.

It’s all to do with Russians and Arabs buying up and making it impossible for British to buy. The government needs to ban foreigners buying properties and keeping them empty. Before anyone here starts screaming that’s racist, you should know that only Russians can purchase property in Russia and foreigners can only purchase houses in certain areas in Dubai so the UAE govt can protect thier property market!

(50)(13)
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Anonymous

“Before anyone here starts screaming that’s racist, you should know that only Russians can purchase property in Russia and foreigners can only purchase houses in certain areas in Dubai so the UAE govt can protect thier property market!”

Oh, well if Russia and the UAE are doing it then it’s exactly the progressive, tolerant approach that we should be taking!

(19)(36)
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Cleary Gottlieb NQ

The only way to fix the housing crisis is to ban foreigners purchasing more than 1 house. And the house they do purchase they must live in for at least 6 months. This will solve the housing crisis and we could all have some hope of purchasing a property.

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NQ

Not sure if this is reassuring to you, but the Swiss are doing it too. If you are a not a Swiss national, you have to be domiciled in Switzerland with a valid long-term residency permit in order to buy, and even so you’re only able to buy one property for yourself to live in.

I am not a fan of government intervention in general but I have to admit I find these restrictions entirely sensible. Even with restrictions, real estate in cities like Zurich and Geneva is every bit as expensive as in London. That’s without oligarchs and sheikhs helping AND with most mortgages requiring a 20% deposit.

(15)(0)
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trainee

I was fortunate to graduate Oxford with a first in jurisprudence. I’m now a trainee at an MC firm. Neither of my parents went to university and all my friends/peers buying homes in London are doing so with a lot of parental help. Not everyone has that, and when you pay circa £1,000 a month in rent, it can be tricky to save for anything else. Of-course I realise that I’m still very lucky, but it does demonstrate how crazy living in London has become (even for those on high salaries, in so-called ‘elite’ professions).

(29)(1)
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Anonymous

I went to a US firm for better comp. Was very aware of the housing problem in London having grown up on the outskirts. As you say, our rent is extortionate. Was aware going into this that the hours you work in city law affects how much you need to spend. As a trainee, I need to be very close to the office (I live walking distance) as I have a stressful, demanding job which requires very late hours – getting the tube for any decent distance would kill me and affect work performance. Rent for that destroys my take home pay. And it’s only a boxy little room in a shared flat. You can earn less but be more flexible on your spending, and because of tax, you can actually earn more net net. I’m netting less than I did on a lower salary before I joined.

Again, I’m very fortunate, but as Cleary NQ said above, Arabs, Russians and other foreigners buy up huge swathes of London property as investments. Baby boomer Brits are also guilty, having bought when property was cheap in the 70s, 80s, they now own multiple gaffs and live off the rental income, shorting supply in the market overall and driving up property prices. Then you have Foxtons et al. who come into areas, artificially drive up property with inflated valuations and run very sharp practices against other agents.

(11)(0)
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Anonymous

So you claim you rent a room in a sharehouse that “destroys your pay” even though you work at a US shop?

Utter BS comments like this make me lol hard.

(4)(4)
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Anonymous

I’m a trainee. Bear in mind, like many/most entering US firms, I’m a little bit older than average in my late 20s. Having also earnt nothing for x months doing the LPC beforehand and a US market trainee salary for 2 years, as well as having earnt a little more in my last gig, I won’t be in a position to buy until I’d guess c.1-2PQE. And that will be if I want a 1 bed flat in West Ham.

(4)(3)
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Anonymous

Why live near the office? When I was a trainee (admittedly nearly 15 years ago), it was the mugs who lived near the office who got the biggest beastings. You know who’s going to have to come to the office on Saturday when the commute is a 10 minute walk or 45 minutes on the tube. And ffs let’s not pretend that you don’t get a cab home everyday anyway. Tragic, self-important, trainee-partner bullshit.

(7)(3)
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Anonymous

Your background doesn’t sound particularly convincing Anon @10:21. But I’ve never had to work a Saturday, I’ve never taken a cab home and I don’t advertise where I live (which isn’t a 10 minute walk anyway).

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Does not know Katie King

It’s astonishing that people are taking her claim at face value.

As a City trainee you might make 50k. As a City NQ you can be anywhere from what, 70k to 150k?

Failing to meet affordability criteria in the 50k year is one thing. Failing to meet it two years later is not arguable. And failing to drum up a decent deposit when you’re making that kind of money is pretty much inconceivable, unless you’re paying ridiculous rent and are living an exorbitant lifestyle.

Given the reality that high trainee/NQ pay is a relatively new phenomenon, I don’t buy any suggestion that baby boomers in an equivalent position to that of the now-anonymous trainee would have been all that much better off, housing wise, even with the relatively lower prices.

So, yeah. You might have to wait till you’re 28 to buy that nice central London flat. It’s a tragedy. Be sure to tell whoever is dropping off your Deliveroo all about it.

(29)(9)
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Anonymous

You are completely deluded. Say the ‘typical flat’ in 2017 costs £550,000 and (at least by recent measure) grows by 7% per year (i.e. £38.5k increase in 2018, £41.2k in year 2 etc). Ok, you might able to borrow some of that growth but not all of it. Using the “standard” 20:80 split with a mortgage provider you are still looking at needing to save roughly 8k each year (and more as the years pass) just to keep up with market growth.

I am a 31 year old 65k junior associate with a spouse earning 40k. We are in the position where each month we put away as much as we can but can can actually afford less in the housing market due to growth.

Oh and good luck wanting children, once you factor in childcare costs the whole thing becomes literally impossible.

(13)(2)
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SingaporeSwing

All you lot on Yank firms, beware. Just like the 1980s, where Yank banks killed British banks, they are killing British law firms with cash. Yank shops employ far fewer people, and demand insane working hours. The legal services profession will be a bleak place without the Silver Circle and Bronze Medallion firms of this world.

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just sayin

its rather ironic that City trainees are complaining about house prices when it is their firms that are facilitating sovereign wealth funds and Sheikhs enhancing their portfolios…..take it up with your boss!

(26)(2)
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Doc. Ludvig Friedrich Von Lowenstein

All these comments are probably by the same person as they are all denoted by the same full literacy and sane speech patterns.

What’s your game being on LC mate?

(2)(4)
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Pantman

Is this the fake NA again? I can’t tell, it never makes sense anyway.

In order to build more homes we need land to build them on – they stopped manufacturing that about 6 billion years ago. The additional problem is that many new homes are bought by investors – so we need some kind of legislation to stop that practise too.

(7)(2)
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Anonymous

Also most people buy with someone else (partner or, less commonly, friend(s)). That makes things a lot easier, even if they don’t earn the same as a lawyer. I don’t have much sympathy. Also, people always seem to make the point ‘why would you do that, it’s not worth it’ without realising that once you’re on the ladder you’ll be able to move out of London later in life and have that detached house with swimming pool you’ve been comparing London properties to all this time.

(2)(4)
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Anonymous

Properties in London are not as expensive as everyone likes to moan – providing you are willing to live somewhere not super duper fashionable. I bought a large 3 bed Victorian house in Lewisham 18 months ago for £450k. Clearly a one bedroom flat would be cheaper. And there are plenty of places further out and not as nice as where I live.
Oh, and not that it’s relevant but I’m also ex Oxbridge and ex-comprehensive and didn’t buy my first property until my 30s.

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Anonymous

Agreed, I bought my 3 bed Victorian terrace in Hither Green/Lee for £440k at the end of 2015. There are excellent areas south east with good transport links.

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Anonymous

Trainees are typically on FTCs so it makes it far more difficult for them to get a mortgage no matter what they are earning, as they will have less than 2 years guaranteed income. So it makes sense for them to wait until they are qualified and then get a mortgage.

Considering the eligibility for affordable housing in London is now a salary (single or combined) of £90k or lower, a single NQ could easily find nice new developments in fairly nice places in London at discounted rates. Considering all new housing developments have to have a ratio of affordable housing, it’s not like affordable housing means living on a rough council estate.

(3)(1)
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Diligent Dan

Go up east towards barking, bow, Upton Park etc. 300,000k will be enough to get you a 2/3 bedroom. Not one of them flash new flats mind, but who cares, build some equity, spend a few years doing law becoming 2-3 years PQE then move somewhere nice like Richmond. Small steps.

(3)(4)
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Anonymous

So far over 30 comments and no one has so much as touched upon one of the central issues in this debate: why should you have to get into half a mill of debt when you are in your twenties or thirties? This ties you into the job you do, the life you lead, and everything else. Moreover, the years of unmitigated house price inflation seem to be over, or at least the magnitude of that inflation has decreased, and as such it’s not so easy to justify the large leverage on the basis of equity appreciation. Basically the deal is: 1) either impoverish yourself in order to gather a deposit of any reasonable size, or ask for parental / other help, then 2) use said deposit to put yourself in effective servitude to the bank, in order to impoverish yourself more with vast mortgage payments on a property you don’t even really have that much affection for at all.

I genuinely don’t think that’s the same deal that the generations above the current “millennial” generation were forced to sign up to. Calling them “the snowflake generation” is incorrect and rude.

(23)(1)
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NQ

Exactly. I don’t see the point of buying a flat at that age even if you theoretically could.

What happened to enjoying life while you already have a bit of money yet no costly mortgage, children or elderly parents to take care of yet?

(3)(1)
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Anonymous

This is basically the problem with our youth. They want Sky/Netflix/mobile data/expensive phones/taxis everywhere… and then complain they have no money.

Buying a property doesn’t tie you to a location. Guess what, if you want to move to Australia you can just sell the property. Ok, there are some hurdles to jump over, and there is the possibility that you paid too much and can’t get that back – but it is generally a better bet than paying rent to someone else.

I bought a flat and paid off the mortgage in seven years – it wasn’t that I was earning loads of money, I just made the commitment to getting rid of the debt: no holidays, old banger car, lived on baked beans, worked like a…

(2)(5)
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Anonymous

Keep polishing that halo.

To be clear, I never remarked on the location of the property being an issue, nor in fact did I remark on the repayment term as an issue. What I said was that it is not a good deal to be forced to enter into c.£500,000 worth of debt for what you get, and what it does to your lifestyle. That argument only gathers force if you then try to pay it off in 7 years (impossible for that sum): you ruin your life in order to own a house. As I have said, that shouldn’t be, nor was it previously, the deal.

(2)(1)
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Anonymous

Are you as old as you sound or are you just being patronising?

Whether it’s generally better very much depends on the situation on the property market/rental market/tax/interest rate situation, and buying / selling a property always involves nasty expenses like stamp duty and agency fees. Personally, I’d only do that if I had the intention of living there in the long term. Plus if you own the place you are the one who bears all the expenses if something breaks, and that can get quite expensive too.

To address your point of “our youth” wanting all the luxuries and then complaining about having no money: That’s not what I was talking about. What I meant was not burdening you with a mortgage in order to persevere the opportunity (nothing more, nothing less) to do entirely irresponsible things like quitting your job, packing your things up and spending a year photographing birds on the Galapagos or whatever floats your boat. Or quitting your job and using your savings in order to start your own business . Or, heaven forbid, quitting law and taking a job that doesn’t pay enough to pay for your mortgage.

Stuff one might be more inclined to do when they’re not already saddled with a lot of responsibility.

(3)(0)
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Anonymous

You are just deluding yourself – you want the option of sitting around doing nothing. This is the sense of entitlement that is the problem.

If you think buying property is problematic now, then you really ought to get yourself a time machine and take a jaunt back to the late 80s/early 90s. Sure property was cheaper, but interest rates were so high, and climbing, that by the time you paid it off it would cost you four-five times what you thought you paid for it.

If you are living with mummy and daddy then the property challenge won’t appeal. But most people make the commitment, not because they want to live in that location for the rest of their lives, but because they understand that paying rent to someone else is the ultimate mug’s game. Your comment about someone else being responsible for things when they break just shows your naivety. You pay for it when it breaks, your landlord is taking that into account and charging you for the privilege of thinking you are young and free.

Where’d I buy my flat – central London.

(0)(0)
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Anonymous

Look, I don’t want to make you feel like your post was a waste of time, but the person you addressed in this post (me) is actually very much intending to get on that property ladder as soon as it’s financially feasible, with everything it entails. I just happen to firmly believe it is not always a good idea to do so, especially when you’re young or not even 70% sure you want to keep doing what you’re doing for the foreseeable future. Thinking things will be rosier just because your flat is yours is a tiny bit naive too.

(0)(1)
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Pongobulb

Being an IM trainee I am amazed you are in the position to afford shoes to go in the box.

No go and fill that shoe box with custard creams and give out to the newly redundant PI paralegals as a goodbye bonus.

(0)(0)
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Johnathon J. Jobsworth

I think we should all volunteer to live at our firms during our training contracts. Most of them have sleeping pods, showers, gyms, dry cleaners etc etc.

You could live rent free – so what you will entirely lose your social life?! You do anyway at most places, may as well save them benjamins for two years for a future deposit..

(9)(0)
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freshfields trainee

Freshfields have sleeping rooms with showers and ironing boards! I have stayed a few nights and to be honest I would not mind staying permanently and saving 2k a month on rent.

(9)(0)
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Anonymous

Buying a house in London, as a City lawyer anyway, is hardly that difficult.

When you’re a trainee you can quite easily save £5k per year, then when you’ve qualified it’s entirely feasible that you can save £10k-£15k per year. This is individually as well, so if you have a partner who earns a reasonable salary suddenly you can be saving £15k-£20k per year. Therefore, feasibly you can have saved up £100k+ within 7/8 years. That kind of deposit will get you a decent 2 bed flat in a nice enough area.

Of course, saving that much will require you to actually save a large amount of your genuinely huge (in comparison to almost everyone else in the country) salary. Share a flat with friends, don’t blow thousands on a 5* holiday in the summer, don’t drive a fancy car, don’t go out for meals 2/3 nights per week and you’ll be fine.

I lived off £2k a month as a trainee, and £2.5k a month as a NQ very comfortably. I wasn’t flash, but I wasn’t struggling either.

(4)(1)
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Anonymous

What you have overlooked is the lag-time factor. By the time we, sat here now, have worked out we need a 100k deposit, it’s too late to turn back the clock 8 years, have that realisation and adjust our behaviour accordingly. Similarly, if we start saving as you suggest now, in 8 years’ time the 100k we need will be 200k so we will be short.

Also, and perhaps this is unpopular, but how many people in their late twenties want share a flat with friends? I for one was married at 27 and sharing with friends wasn’t top of my agenda after that. Not going on 5* holidays is fair advice, but what about 3* or 4* ones? They’re not free either. In fact they’re often very expensive. Your twenties is the time you should be enjoying yourself, seeing the world, having experiences that might – in some cases – cost you money to experience. That is all the more important when you work a demanding job the rest of the time.

So while your advice sounds all nice and neat and sensible, it doesn’t really work in practice. It is better, I think, to accept that the rules of the game have changed and not for the better.

(3)(1)
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Anonymous

I sympathise with this view, but to be honest I think it is a bit wrong-headed. It’s much better to work your socks off in your 20s and 30s, and then take it easy later, than vice versa. Forget about your ‘experiences’, think of being a right lazy bastard in your 40s.

(3)(1)
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Anonymous

Yeah, I sympathise with your view too. But I think working your socks off shouldn’t come at the expense of enjoying your life a bit here and there. Not everyone has the good fortune of being alive and in good health in their 40s – sad but true. Of course you shouldn’t count on your life going sour, but if I was diagnosed with a terminal illness at 40, I’d rather have a lot of very nice memories than a flat in Chelsea. It’s about striking a balance.

(2)(0)
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Sir Nigel Farage

This is actually true. Damn immigrants have made house prices and rent rates so high!! Bloody Polish and Romanians need to be deported ASAP.

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Disclosure king

Ditch the attitude and bite the bullet. Move out of London.

I’m a 25 year old paralegal who is nowhere near qualifying and via shared ownership, I have bought my own flat in Essex. I own a small percentage of it, but i’m on the property ladder.

If I can do it on a paralegal salary and make the necessary sacrifices, higher earning individuals can too.

(3)(6)
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Not Racist - I'm Black

Why should we move out of London while islamists and chinese have led to house prices soaring. It’s our capital and British people should only be able to buy. Ffs!

(3)(4)
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