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You need at least £240k in cash to pull it off at the start. And someone needs to lend you the money. And you need to be young presumably for a 30yr mortgage.
I guess - and I think Neil has mentioned this before - the key is they never expect to pay the mortgage off, ever. You are literally buying a house you cannot afford. Full time renting from the bank, slam an extension on the back, move up the ladder until you can retire to the Cotswolds or something
Howard-
That can't be unusual.
The other aspect in play may be people expecting a hefty inheritance at some point. Although there aren't any guarantees a lot of people will come into a fair whack of money in their fifties/sixties, which might well pay off any outstanding mortgage.
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How many bankers, lawyers, accountants, management consultants are there in London? Starting salary at Clearly Gottlieb, for example, is over £100k. I guess even junior bankers could be halfway towards a £240k deposit in a good bonus year.
I'm not convinced it is all folks behaving with reckless financial abandon. Simple fact is that demand outstrips supply right across the spectrum. For the houses we are enviously eyeing, there are probably many more eyeing ours and asking the same questions about affordability.
Bainbridge
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Have you worked the maths through on that? After tax, £160k is £8k per month take home.
A mortgage of £800k repaid over 30 years is circa £3k per month at 2% interest and £4k a month at 4.5% interest. Depending on other outgoings, that would seem affordable to some.