To explain why I thought we needed a four bed. All our family live far away, meaning that they need to stay over when visiting. It's such a upheaval with sofa beds, blow up beds etc and doesn't tend to best the eat experience for guests.
Don't quite understand the question. Are you saying you're not sure whether to:
1 - stay put and save up for the bigger house in the right location 2 - compromise on location 3 - blow the budget, buy the bigger house now and in the right location, but that would mean you couldn't do it up for ages?
If so I'd say 1 or 3. I wouldn't compromise on location myself.
I think I'd still go for the smaller house, and a wait to do it up, rather than compromise on location.
It depends how much of a compromise it would be though. If it's between two areas you like, just one you like slightly more than the other, then maybe it is worth going to the slightly less preferred area for the extra space and more spare cash for doing it up. But if that's the case I'd expect the price difference wouldn't be much anyway. If it's between an area you like and one you don't much like... definitely go for the one you like.
And it's ridiculous for your parents to resent you moving away! I can understand you wanting to encourage them to visit, but I wonder if their reluctance to visit might be more about their (unreasonable) resentment of you moving away rather than anything to do with the bedroom arrangements... so getting an extra bedroom wouldn't necessarily fix that?