AIBU to think my small family doesn't need a bigger house?

Invest your extra money and if you need to move in 10 years' time because things have changed then you'll have a good pot of cash to dip into.

Stay put for now.

Stay in the same area and get a similar sized house with a bit more garden for the kids and dog to play in. Terraced is fine if the neighbours are good ours were fabulous and then they moved, the next ones were the neighbours from hell. We're detached now (but still a smallish house) which is great.

Your OP lists all the reasons you should stay in a smaller house - so you seem to want to stay!

Personally though I'd always go for the bigger house:

• it's an investment, property prices at least double every 10 years on average, it'll likely give you a great return on your money, more so than savings/investments & you can downsize once DD is older to access that money
• you get to enjoy a lovely big house! It's the place most people spend the majority of their time, so imo it's one of the best uses of your money. You'll use it every single day!

Those are the reasons I'd move if I was you. You can still give DD all the money, house deposit etc etc by downsizing later on. And you'll probably make more total money from a bigger house anyway (caveat: depending on area and house price increases)

Property has always outperformed savings accounts as the best you can hope for is keeping up with inflation. However long term property versus the stock market is a much more difficult question. Up till 2016 from 1980's property outperformed the average rise of UK stock market. However since 2016 property prices have risen slower and the Stock market has outperformed property by quite a lot.

With the stock market while long-term the average annual increase is 7% in any one year it could go down which is relevant if you need the money that year but if in for 25 years it is largely irrelevant there are charges for stock and shares accounts but generally not small. Most people investing reinvest the growth so it compounds
A larger home with mortgage does have more leverage on but it also has more risk than a paid off home. Mostly if your home is paid off it is not at risk if you get ill or lose your job while of course a mortgage that is a stretch is a risk.

Most of this is people's attitude to debt, risk and investment balanced with need for frugality / lifestyle and peace of mind. And how it plays into their values and attitudes. For some people a paid off house low risk investments a good emergency fund and a relatively frugal lifestyle is worth it for the peace of mind that they will always be able to manage even if left on just benefits or state pension. For others they view stretching themselves financially for a better house and borrowing for education etc will pay off long term and they hope Thier ability to work will pay for their lifestyle and enable them to earn more for better pension whilst accepting that long term I'll health or a job loss leading to long term income loss would mean downsizing to cope and that is a risk they are happy with. Most people do not want to be so stretched that even losing 4-8 weeks of income puts them at risk. Most people are not so risk averse that they consider any investment that is not guaranteed to be not worth it and would live on baked beans till debt and mortgage free
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I was in the larger house category, I'm now in the smaller house and more holidays category with more investments in stock market than a larger home to maintain and clean

The house sounds fine, and you could better invest the money you'd spent on an larger property elsewhere. It's not like you're choosing a house to die in anyway, if she does find she wants a bit more room in a few years you can move then.

There is definitely a problem with too much space.

OP, your house sounds great. Her friends will come if it is a home where they feel welcome, relaxed and comfortable. That’s much more important than being the home with the huge garden or whatever.

I live in a similar sized house with 2 young adult DS. They also didn't have "cool holidays" or expensive day trips. And no university funds/car expenses/house deposits etc.

It's fine. They had a lovely childhood. They are happy young men. They had friends over when they were younger, didn't particularly want to as teens. Maybe that's different with girls.

Honestly, my DD has friends across the whole spectrum. From those with a full suite to themselves, to one whose family of 5 are in a small 3 bed flat and she doesn’t even have a bedroom. I remember DD coming back and saying she thought that was her favourite one of her friends places because it was so fun and cosy.
we also have a small 2 bed but it’s only the 2 of us so it works.

Now is a bad time to sell
I don't think it is with 2 beds. My DM house had 2 offers the same day of first veiwings for asking price. A couple of weeks ago and so did their neighbour.

I could happily live in a very small space but equally I think that there's no such thing as too much space. If you could find somewhere bigger without compromising your lifestyle I would go for it. It's not necessary to borrow the maximum just because you can.

Likely yes with a moderate risk portfolio, property usually escalates about 5 percent annually but she could get more in stocks and shares, but then she also gets the pleasure of living in her bigger home,

and the more valuable your house is the higher the return, even if paying a mortgage, ie 5 percent a year increase in value on a 110k house is 5.5k. It’s 25 k on a 500k one.

At the moment you are young and working and you have borrowing power to invest in an asset which will grow. You will never have that borrowing power again or from anywhere else

Stocks & shares ISAs invested in a good index fund would be a much better investment than a mortgage.

I’m in the smallest house but quite some way compared to my friends (2 bed plus box room mid terrace) I could have upgraded but instead we have traveled a lot, I spent more on travel each year at one point for a few years than my mortgage. My daughter is now a young adult and agrees I made the right decision, she has a love of travel and experiences herself now.

I have 3 kids who have friend who have lived in everything from a council flat in a high rise to a £800-900k fancy new build and EVERYTHING inbetween
we have an older 4 bed semi that could do with some TLC 😂
however true friends never judge - if you are happy that is all that matters

I would only move if it affected catchment areas for schools, and even then I’d keep your current house as an investment property.

Keep it simple. Why make more complicated unnecessarily?

Why not build a loft conversion with en-suite for your daughter with the stairs coming from her current bedroom and turn the under stairs space into a little study area.

See how it goes.
If you are not in a rush you can change you mind at any time.

I would be very very wary of anyone who would say they couldn't like like that?
Not the words of a friend.

I would definitely step away from such a rude, toxic, judgy person.

We live in a large house, my daughters friends live in very very large houses and two up two down terraces.

They are all great girls and it is absolutely their lovely personalities, fun and kindness that make them so attractive to my daughter, not their homes.

Stay put and don't move for the opinions of others.

Surely there's room for compromise?

Most people aren't mortgage free at the point they are young enough to have a small child. If property in your area is cheap enough for a 2bed to only be worth £110k now, which is insanely low, then surely either a slightly bigger 2bed with double room for dd so she can have friends over, or even a small 3 bed won't make the difference between being able to help with her uni fees in 16 years years or going on holiday?

Particularly given you have "a lot of spare income" - taking out a very small mortgage to buy somewhere worth, say £140,000 at some point in the next 5 years or so would still be paid off quite quickly and allow you to have lots of experiences and savings.

I actually agree there's no point in having a giant house when you don't need it, and in my experience spare rooms just end up accruing extra "stuff" to fill them with, but don't understand why you seem to be acting as if its a choice between stay exactly where you are for the rest of your lives or buy a mansion in London right now!

If your house is worth £110000 and you are mortgage-free, presumably you could get a smaller 3 bedroom house for under £200k in the same area?

If you are both earning well, you could pay that off in 10 years or so, and then have plenty of money for amazing holidays in DD’s teens, and to support her through university.

It’s up to you, but as a heads up, teenagers need a lot more space. If her room is small and wouldn’t fit a double, she’ll likely feel a bit claustrophobic having friends over. Personally I’d size up in your shoes

People can have their opinions but won’t be paying your new higher mortgage or bills, so it’s not really relevant to them. If you are all happy, what does it matter!

I’d look at maximising the space in your current home. My neighbours garage butted onto their house so they converted it and built over it.

my mum and dad extended back a bit on their house and had a bigger bedroom upstairs, new dining are downstairs and moved the kitchen from the back to the front of the house.

my partner has extended into his loft and has a large room upstairs there now.

have you space for a fancy large garden ‘shed’ that could have power etc and be a hang out space?

id stay put and invest the money in savings, pensions and experiences as well as improving the current home you love.

this money could be for riding lessons or other expensive hobbies.

amazing holidays at home and abroad etc.

Now is a bad time to sell so if I were you I’d stay put and build up savings and look to move in about 5 years.

It’s one thing having room for a small
toddler but a tall teenager will take up a lot of space and they like privacy and space for friends to come around.

I wouldn’t be worried about what other people think though and anyone mentioning that is very rude!

We have one child as well, and while we were absolutely fine in a small two bedroom flat when he was a preschooler, we did move to a (still fairly small) three bedroom terraced house when he was in primary school, and it is much better honestly - the main drive was having somewhere for DH to wfh that wasn’t an open plan living room/kitchen, but we also now have space for DS to have a desk for school work, room for musical instruments, space for his friends to play when they come over, a bigger garden to play out in. No trampolines or climbing frames, we have the park for that. No en suites or spare rooms.

I’m sure our house is still small by MN standards (you can’t bring up a child in anything less than a four double bedroom detached house with en suites in each room, according to some on here). We went from 70m2 to 100m2. Is there a medium option locally? Slightly bigger but still not a five bedroom detached new build?

I would like more space than you describe, but as the area is important to you, why not just keep an eye out for an upgrade within the same area, rather than moving away?