Buying a 2 bedroom house is my biggest regret

[Helmlover]

This thread is by no means to gloat but I would genuinely appreciate some advice on my current situation.

I am lucky enough to live in my own house which is paid for. However it is only 2 bedrooms with no scope to extend (we have already looked into this). I live with my partner and his 2 children stay with us twice a week, who occupy the 2nd bedroom.

The issue is, I would really like a child of my own so therefore we would need to move house. We tried to sell a few years ago with no interest whatsoever. I know that if I tried to sell again I would need to lower the price, but the truth is I’m not prepared to lose 4,5,6 grand as that is a lot of money to me, and have worked too hard to just throw money away.

Can anyone offer any advice on other options? I have thought about renting it out but I don’t know if it’s worth the hassle.

@Helmlover, we don’t really make a profit, because we use what’s left after the mortgage is paid to keep the house maintained. That said, our house is over 100 years old, so probably needs more spending on it than a newer one would.

The rent covers insurances, plus we have service and maintenance schemes for all appliances.

As far as hassle, none really, but we established at the beginning that DH would do the garden (it’s large and one of our tenants has a disability). We also said that decoration and carpets would be provided by us, but the tenants would be given a choice, within reason, of colour schemes. This means that they feel looked after, the house looks nice and we won’t be left with any outlandish DIY if they ever leave .

We have been lucky with our tenants though- they really love the house and consider it their home. I have friends who haven’t been so lucky, but in all honesty, I don’t think they look after their tenants as well as we do either.

Stories of what people did in previouses downturns about unsellable houses/negative equity are not necessary relevant today. There is now additional stamp duty for second properties and an increasingly expensive tax regime on rental income.

Renting out a place always has risk. If you "lose" 6 K on your house at least you know what you are dealing with. If you are renting it out you will always have uncertainty hanging over you. You may end up with voids, a tenant in financial difficulty, there may be further house price reductions.

What's your partner's view on all of this?

I have never suggested putting his children in sofa beds? They were other people’s suggestions so I’m not sure why I’m getting attacked for that.

Yes, ideally my partner and I would like to buy a place together. We would put down equal deposits and hopefully get a joint mortgage.

Perhaps try again with investigating a loft conversion - ask a few different companies for their opinions, some are more creative than others - we were told by several companies that we couldn't have a loft because of the lack of height, but one company suggested lowering the ceiling below - obviously not an option in many houses, but it worked in ours.
Aside from that, surely you wouldn't forego your chance to have a child simply to dig your heels in to get the amount you think your house is worth - it's only worth what the market (buyers) think it's worth, not what you or the estate agent think. Surely that would cause much deeper regret later in life.

OP, you only ‘lose money’ if you sell and don’t buy. If you sell and out your money into a new bigger house you are simply transferring what your house is currently worth into a new house.

I would sell and buy bigger, if you can afford the top up
Mortgage.

I sympathise with this, OP, as I bought a house I loved in 2005. When I tried to sell it ten years later there was no interest, and like you I’m reluctant to sell it for 10, 15k less than I bought it for.

However although no one wants to buy it, plenty want to rent it and that’s what I do. So every month I get £500 from it which then pays the mortgage on my new house.

If you do sell and buy be VERY CAREFUL about protecting your equity if you marry or buy jointly with your partner.

If you buy jointly and he pays towards the mortgage, but as ‘tennants In common’ which states and legally protects the proportion of the house that you own.

How old are his DC?

If you haven't tried selling it recently I'd at least get it valued by a few Estate agents. Before they visit do a massive declutter, repaint walls, clean carpets, tidy gardens. You might get more if it has new floor coverings, bathroom and kitchen but it might not be enough to get the money back you spend on these items plus what you paid for the house originally. Ask the estate agents advice and visit a couple of new show homes for ideas.

OP, you overpaid for a 2 bed and now it's not worth what you paid for it to anyone else. All the coulda woulda shouldas and if onlys in the world can't change that. What's done is done.

Now you have to decide what is more important to you: taking the financial hit and moving to a more suitable family home or staying put and accepting the inconvenience of your two bed for the sake of a few thousand.

Sometimes we just have suck up our poor decisions, draw a line under them and move on. No one here can wave a wand and make your 2 bed a 3 bed nor can they make it worth more than it is.

I'd just take the hit, sell the house and get on with your life, learning from the experience.

Helmlover are you looking for advice or just wanting to vent about not having made money on your house?

It's fine to want to vent, although many would point out that you haven't come out of it too badly if you lose less than you would have paid out in rent over 6 years.

Many people seem to think buying a house entitles them to a profit, which it clearly doesn't. Many people behave as though big rises in their house prices are no more than they deserve, and get irrate about their children "loosing" that money throufh inheritance tax down the line.

A lot of that money is purely theoretical. You've bought a home and lived in it for 6 years. If you'd bought a car 6 years ago you wouldn't expect the same money back when you sold it 6 years later, or claim to have lost the money - you've had 6 years use.

Seeing houses as simultaneously cash cows and homes is risky.

Obviously the only advice anyone can give is to sell and buy a bigger house, or rent it out and buy or rent a bigger house. There's no magic wand to wave and increase the value of your house.

Is it shabbier than when you bought it? If prices are stagnant in your area you could obviously present it better and potentially attract a buyer at the price you paid. Otherwise if prices have dropped, it happens. Buying property isnt a guaranteed investment, especially over 6 years rather than 60.

House prices fluctuate. The reality might be that your house may not not be worth as much as you originally paid for it. This happened to us. We bought our first house when everything was very expensive, but 2 years ago we really wanted to move (bigger house, better schools, nicer area) so we decided to sell. Our house sold very quickly, but we sold it for 4.5k less than we paid. This was a fair price considering the housing market at the time. I didn't think of it as throwing money away because it meant that we could move on and I'm so glad we have. Our lives are so much better now and we're really happy where we are. In the grand scheme of house prices 4.5k isn't much really. Could you afford to take the hit for the sake of moving on and improvin your life? If you can I think you should do it. Btw our new house has already gone up 23k on we've only been here 20 months. We haven't do any major work either (some decorating, carpets, 1 new window and 1 new back door). It's just the way house prices have gone near me. This could be the same for you too.

Lots of people ‘lose’ money on houses. We sold dh’s first flat at a loss. Had to. Made money on our second house. May well lose on this house with Brexit but then again what we will be buying will probably be less too.

How long have you had your house? Do you have a mortgage? Would your DH be putting money in to buy with you?

I would start by getting a few agents around to value your house in th current market. It might b different to what you paid for it. It may be different to what you had it on the market for before.

Also have a good look at what similar houses are currently going for. And what three bedroom houses are going for.

See how you can make it work.

Also - get legal advice on protecting your money if you put more into the purchase of a new house than your DH. You don’t want to lose your security if it all goes wrong.

So if you and DP are buying together, what's the problem?

You seem really hung up on the negative equity - it's a tiny amount in relation to the interest payments you will make over the life of a mortgage.

Just sell your house, use the money he has from his divorce, and buy a bigger home together.

I would just sell the house. What you lose in money you'll gain in having a bigger house.
Either you want a bigger house and a child or not.

Yes, how old are the existing kids? Are they of an age when they soon won't be coming to stay with you so often so you could give the room to your new child and if and when they came over, they could use sofa/sofa bed?

Op...a few grand stopping you sell your house and have a baby. Have a baby if you want one. Sell the house for whats it worth and buy something bigger. Look around at three beds in your area.

Focus on the important thing.

Find out what the market is like for your local area. Don’t rush to sell your property. Talk with the estate agent too. What are the local schools in the area like? Have a list of questions ready. View properties in the area. Budget appropriately. Make sure that you trust your gut feeling.

Pay attention to any numbers. Get contact information.

Have a comprehensive survey done. Read the inspection report on the property carefully. Look for any possible dangers or problems with the property too. Use only reputable local tradesmen to do jobs. Ask for recommendations.

Personally I think that it’s a good idea to relocate to another area. Have you considered renting? Why do you want to move? It could often work out cheaper to rent rather than sell the house. Take my word for it.

You’ll get more value for your money that way.

If you're buying this new house 50:50 then presumably you'll have money left over from the sale of your 2 bed even after buying a 3 bed in the same area? So you're ahead?

Maybe wait until your pregnant to decide?

Its like me selling my car. I paid £3000 for it, 5 years ago. I would probably get £500 now, if that.

Thats life, Im afraid.

One further thought: my parents had 3 kids, we kids shared one bedroom (2-bedroom house). When I got too old to share with my brothers, my parents partitioned the lounge into a teeny bedroom for me and a teeny lounge. It was a squeeze, but it didn't really matter.

I suggest if you are going to sell then do it quickly because house prices are predicted to slump dramatically after Brexit.

I stayed at my dads every weekend ,on a camp bed wherever it was put..never occurred to me that I should have a room at home of my own ,and one at my dads as well...I turned out ok (ish) so it didn't do me any harm...if it were me op,I'd be using the second bedroom as the baby's room ,and your step children can bunk in with baby and all share when they come...you just need some bunbeds and room for a cot ..sorted .

Just sell and find a bigger house. In the grand scheme of buying and selling houses 4-6k isn't a huge amount of money. And you could save that by buying somewhere that needs a bit of work doing.