Housing dilemma... What would you do?

[zebranotzeebra]

In a nutshell, this is the decision we're facing (me, DH, a toddler and hopefully another child in a year or so).

For context, both of these options would be in the same suburb, with access to the same good catchment schools and amenities.

Option 1: more modest type of three bed semi, with small third bedroom, some we've seen have a conservatory/an extra WC downstairs which is handy, but not all. This option would allow room in the budget for holidays and days out etc., but may require another move in the future as children grow.

Option 2: max out the budget for a 4 bed/more useable 3 bed that we could stay in longer but which would severely limit our budget day to day with little money left for extras or holidays.

DH and I sit on slightly different sides of the fence with this one (though we're both open to the other option). Just curious what most people would do...

We had the same options almost a year ago. We chose the smaller house and we've never been happier.

I have always gone for maxing out even when I had tiny babies on the basis I could always go for promotions or we could take second or weekend jobs and it worked out fine.However I was in a job (law) where there do tend to be pay rises in the early days.

We went bigger house so we didn't have all the selling/buying fees again.

Also knew our salaries would keep increasing so was only 2 years where we cpuldn't do the bigger holidays etc now we have same disposable income as we had before we moved, and by next year it will be more

I've always gone for not stretching, you never know what's round the corner plus you could always extend/convert loft space later down the line.

Agree with smaller house - you could have eight plus good years in there before need to move as kids get older. Also any possibly to extend or add value would make it a good option. I think flexibility money wise especially if going on maternity leave would be a bonus too. Expendable income will allow for treats and also any additional work on the three bed house.

We went with the smaller house & have enjoyed holidays etc. very happy with our tiny mortgage now that interest rates have risen so much as well.

If the smaller 3 bed has the big and small bedroom at the front, with a double bedroom at the back, a relative of mine took the 2 front bedrooms and made them 2 equal size rooms.

Thanks for all the opinions so far. Interesting to see a mix, shows that neither DH nor I are wrong! I err on the side of option 1 because I work part time now with no real option (nor desire I might add) to add days in the short term, although promotion is definitely a possibility further down the line. Hence my feeling that we should go smaller now and could always upgrade later if salaries increase.

Smaller house and enjoy life more! I don't have any regrets.
There is a danger that a large house can feel like a prison if you can't afford to do things, I've seen relationships under strain because of it.

We had those options 25 years ago in similar circumstances. We chose the smaller house. We were going to move about 12 years ago but the house we were going to buy had an awful survey. Plus we had paid off our mortgage so ended up remaining and upped our investing. We have now retired early by 56. I appreciate it was a very different time. We had amazing holidays every year which we all loved and we have retired the earliest out of all our friends though some have retired early. My career got cut short by health issues unfortunately so not moving that time worked out well.

Definitely option 1, don’t struggle and live life. The stress of option 2 is not worth it.

Smaller house (+ downstairs loo that's non negotiable with kids!). No contest.

You can always add a garden room or attic conversion at some point if needed. When kids are teenagers they don't care as long as you leave them alone 😊

I’d go for option 2. Buying and selling is expensive and stressful. For 2-3 years it feels a bit tight but then gets easier with even small pay rises. But as a PP said I’m in a job with pay progression and usually the opportunity to pick up some overtime for a holiday. And if you end up having to remortgage at the wrong time you might find you’re on the wrong side of an interest rate rise.

We went for a lovely big house in an area we love with good community. It’s more important to spend money on your actual real life. Not a holiday once a year or trips to Alton Towers. We have lovely holidays, camping, go to stay at family members second home, city breaks. We could go to Disney or the Maldives, I suppose, but it’s a silly waste of money on a few days a year.

We have lovely days out too, but because we live somewhere wonderful, it’s beach days and wild swimming with a picnic and walks and exploring. We’re not dropping £100 to do something in a given day. We don’t have to because we can enjoy doing stuff at home (we have the space for friends in the garden, spare room for film nights and sleepovers) and nearby that’s all pretty much free.

I think a smaller house with a toddler is one thing, but with them in primary and secondary school having friends over, hosting parties, sleepovers, being old enough to argue about what film to watch, the extra space has made a real difference in terms of quality of life.

Option 1. Enjoy your life now, you never know what is around the corner. Life is too short to be poor for no good reason.

@mindutopia when I say holidays, definitely not meaning Maldives or Disney! Just thinking the odd UK break which can easily be the best part of a grand in school holidays (I'm a teacher so no flexibility).

Downstairs loo

@mindutopia we also have no family members with a second home! I appreciate the different perspectives, it's all great food for thought, but I think we're coming at it from slightly different positions.

I would go bigger house, that is where you are every day if it's too small it's frustrating every day. Having a few extra days holiday every year doesn't compensate for being cramped the rest of the time.

There is a 3rd option. Follow the best house on the street principle and move areas.

Max out,
and take a fixed rate for many years, to protect about probable interest rises.
Just a struggle now, will pay big dividends in a few years.

If it was me personally I'd be looking at either an option 1 that had the potential to extend (e.g. build out to the side to create extra living and bedroom space) or, I'd be looking for a option 2 that needed a bit of tlc. (This would probably be what I'd go for, great way to add value and make the family home you want)

Depends on your ages. If you're late thirties or older I would go option one. If you're younger I'd go option two.

My risk appetite is less when children are involved, and with nursery bills and middle age approaching the promotions don't come as fast. The job market is tougher in my industry now, I've just had a promotion and competition was fierce. The same for a role I've just recruited to.

If you have super secure jobs (eg. Civil service, NHS, self employed in decent area) and will likely get reasonable pay rises then I'd be more inclined to consider option two than otherwise.

I have the small house you're describing (but no downstairs loo or conservatory) with two primary dcs and it's absolutely fine. In our case that was all we could afford and actually get (we bought in 2022 and it was really difficult to view houses as they were selling so quickly).

We almost bought A fixer upper, which was the same price, and long term would have been better, but it needed at least £150K spending on it which we didn't have and we would of needed to have relied on remortgaging to release equity. (The house has probably gone up in value by no more than £25k).

Any way, I'm glad now we went for the smaller home (the location was better which swung it) as we're still in our low five year fix, even if we pay 6% interest in the future we can afford it as I've increased my hours at work. Basically I like having disposable income.

Ps - Our uk caravan holiday in August last year was £1050 for a week and the 'saver' range! I'm looking forward to going abroad next year and having the money to do so!

I was also 40 when I bought so a bit late really for me to upsize but I would have stretched if it was a turnkey property.

We had the small house for years- from when kids were 8/10 till they were 16/18.

Never regretted it. So worth it for the reduced financial stress!