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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

2 bed or 3

124 replies

Happilyneverafterrr · 12/08/2017 09:00

Sorry posting here for traffic as tearing my hear out trying to make a decision.
DP and I are buying our first house on a shared ownership scheme. we simply cannot afford to get on the property ladder without doing it shared ownership.
We have savings.. our choices are
1- get a 2 bed, have plenty of spare money to buy furniture etc.. however will 100000% need to get a 3 bed in 5/6 years time.
2- get the 3 bed - this would use all of our savings however our families have kindly offered to help out a little bit. Monthly payments are £120 higher but we wouldn't ever have to move.

The 3 bed seems so much better because we would never have to worry about buying again however £120 extra a month would be nice and I begrudge paying for a room we won't use yet!?

I don't know what to do and am really struggling to make a decision. Neither of us are high earners atall but we are very sensible with our money and don't owe a penny.

Please fire away with your opinions :) Thankyou

OP posts:
simon50 · 12/08/2017 09:52

Go for the 3 bed now, as if you have to move to a 3 bed in a few years time you will incur the extra cost of more legal, fees, stamp duty and estate agent fees, so you would just be wasting money.

That said I don't know how old you are and you may be used to these VERY LOW interest rates. They will not last forever ! Factor in that they may return to normal levels of 5% in the next few years, I'm old enough to have been buying a house in the late 80s when rates hit 15% and a lot of people lost their homes, lenders sold their homes for less than people paid for them and then chased them for the outstanding balance !

Theweasleytwins · 12/08/2017 09:53

We brought a three bed, thank goodness because six months later I was pregnant with twins

RedBlu · 12/08/2017 10:13

You do need to check though, unless the SO in your area aren't in demand - the rules are generally couples can only purchase one or two bed properties - it's only single parents with children and couples with children that purchase three bedroom and above family homes.

Original poster
Happilyneverafterrr · 12/08/2017 10:20

Thankyou all I didn't even think about that! Best we check .. in which case 2 bed it is!

OP posts:
Kpo58 · 12/08/2017 10:29

Buy what you can without going SO.

Remember they can hike up your rents, stop you from extended your home/other large changes and if you are not freehold, hike up your yearly charges. There is also little chance that you will be able to afford to buy the other half of the house.

Original poster
Happilyneverafterrr · 12/08/2017 10:37

Kpo .. we quite frankly can't afford to do that or we would lol

OP posts:
RedBlu · 12/08/2017 10:38

KPO - that isn't true.

1). Remember they can hike up your rents

Rent can only go up by a set percent per year. Our rent has only increased by a few pounds in the three years we have lived here.

2). stop you from extended your home/other large changes and if you are not freehold, hike up your yearly charges.

You can do whatever you want to your home, other than large structural changes - which obviously you would need planning permission for anyway! So long as the changes add value to the property, it is unlikely they would refuse.

3). There is also little chance that you will be able to afford to buy the other half of the house

What are you basing this on? Generally over time, you can save up money, maybe get better jobs, better pay and be in a better position to purchase the rest of the house. That is what we are doing, buying the rest of the house next year so we own it all and the freehold.

reallynearlythere · 12/08/2017 10:38

No mention here of the extra costs of running 3 rather than a 2 bed. With the possibility of interest rates rising I would ask you to look at the extra costs of heating, council tax, water , insurance etc. No doubt that the 3 bed would be 'nicer' but if you are going to worry all the time about paying bills it is not worth it. Have you got the option of increasing your share of the property over time? If so, the £120 could enable you to clear thousands off your mortgage long term.

simon50 · 12/08/2017 10:48

In truth Kpo58 is right.

I'm sure I read a story a while ago where someone got caught out by SO.

I will make the prices simple just for an example.

A couple buy a house valued at £200k buy 50% and rent the other 50% of it, a few years later they want to buy the other 50%, they are told the house is now worth £300k so to buy the other 50% will cost them £150k so maybe check that out?

HipsterHunter · 12/08/2017 10:49

3 bed

The costs associated with moving are huge. Get the 3 bed and think about a lodger for a little bit (I have someone staying with me weeknights only)

RedBlu · 12/08/2017 10:51

Yes that bit is true, if the value of the property goes up then when you want to buy more, the price is based on the current value. However, it also means the % you own has also gone up in value so you have equity in the property.

Ours has increased by about £15k in three years. I don't see it as a problem, if I wanted to buy a house outright now it could be costing more than it did three years ago so the HA are going to want the current value for their share

HipsterHunter · 12/08/2017 10:52

@simon50 well yeah.... that is how it works obviously. You buy at whatever price it is at the current time!!!

That's isn't something people were 'caught out on' unless they had zero understanding of what they were doing.

littlemisssweetness · 12/08/2017 10:53

3 bed for sure! I'm assuming the 3 bed would be needed due to planning a baby? And if that's the case do you really want to be trying to pack/move deal with the buying process all over again while pregnant or with a new baby? There's also no gaurenteee they'll have any suitable 3 beds at the time you want so take it while it's there

Cadenza1818 · 12/08/2017 10:53

I went for the 2 bed, got pregnant with twins and then couldn't sell. Go for the 3!

Original poster
Happilyneverafterrr · 12/08/2017 10:54

Property prices will always go up shared ownership or not ..
This is our only option unless we save about 100k which would never happen.
My concerns are with the 2 bed.. how hard it would be to then get a 3 bed
With the 3 bed to be perfectly honest I don't really care about buying more etc as we could stay there forever

OP posts:
simon50 · 12/08/2017 10:57

RedBlu and Hipster.

Sorry I should have made that clear, that the didn't realise that the other 50% would cost them more later.

brightlightceiling · 12/08/2017 11:00

Property prices do not always go up. I lost thousands when my ex and I broke up and I had to sell the house. We had lived there for 6 years.

You might want to listen to people like kpo because they have seen things go wrong in the past. It doesn't mean that you shouldn't buy a house, just make sure you know the risks and have a plan b if possible.

brightlightceiling · 12/08/2017 11:00

5 years is nothing, go for the 3 bed.

simon50 · 12/08/2017 11:01

I may be wrong (won't be the first time) but I thought you could only sell your house back to SO scheme when you moved ?

Original poster
Happilyneverafterrr · 12/08/2017 11:01

Yes and then they went back up again.. yes things go tits up sometimes as my family have also learned the hard way.. but generally over all house prices will increase over time.

OP posts:
AntiHop · 12/08/2017 11:04

simon50 you are wrong. You sell your share on to someone else, not back to the housing association.

Riverdale32 · 12/08/2017 11:06

Definitely the 3 bed. The costs (and stress) of selling / moving would be enough to put me off moving again so soon. If you do start a family the last thing you will want to be doing is trying to find thousands of pounds to move again. Go for it.

AntiHop · 12/08/2017 11:08

simon50 if those people didn't realise that buying a future share would cost them more, then they are not understanding capitalism! That's not something they were "caught out" by. Of course if you want to buy a bigger share later, it will be at the value at that time. Same with purchasing any property! You can't go to an estate agent and ask to buy a place for what it was valued at a few years ago.

simon50 · 12/08/2017 11:09

Just a thought, but I'v read that a number of buy to let landlords are thinking of selling due to a number of tax changes coming into force soon, no longer being able to claim interest charges, wear and tear etc, against tax.
This may cause a drop in prices for a while if there is a flood of these properties on the market, so it may be wise to hold fire for a while and see what happens ?

RedBlu · 12/08/2017 11:11

Well actually the HA get first choice if you want to sell, they might want it back as SO stock. What it states in our agreement is if we want to sell before we own it all, is they get first refusal - if they don't want it, it then gets sold still as SO but via estate agents. Once you own it all, you have the freehold and it's just sold like a "normal" house.

OP, if you can get the three bed - go for the three bed so long as it is affordable and the HA allow you to do so.

With us, we went for the two bed and just had a baby. However the second bedroom is big enough that if we did ever want more children, we could split it. Also, the garden is big enough we could extend out (once we own 100% obviously)