Have we left it too late to buy a bigger house?

[braindumpoclock]

We're a family of 4 living in a small Victorian terraced house in London, which we've extended to the max. DCs are now aged 14 and 11. Most of our neighbours with kids the same age have long since moved out to bigger houses, and have been replaced with younger couples who are starting new families. We've been happy here, but it's small, and it has always been unsettling to see so many people moving in and out around us.

A year ago, we decided it was time to trade up. We put the house on the market, just as the market ground to a halt. We've had to drop the price a couple of times, but now, finally, we have an asking-price offer. There is also a bigger house in a nice area that we would like to buy and can (just) afford, albeit with a much increased mortgage (our current mortgage will be paid off in 3 years, but the new place will give us a mortgage until we retire).

We should be happy and excited, but we're hesitating. Have we left it too late to trade up? DC1 will be heading to uni in just 4 years, and DC2 in 7 years. If we move to the bigger house we will have more space for them to live with us into their adult years if they need to. But maybe we should stay where we are, and use our spare money to buy them a property instead? I can't work out what I want to do - the thought of staying is sometimes comforting and sometimes depressing - the thought of moving is sometimes exciting and sometimes a scary over-commitment.

How on earth do we decide? By trading up we'd be doing what most people do, but we do have some friends who are choosing to prioritise future properties for their children instead of bigger properties for themselves. There's no easy answer, and I know there will be mumsnetters in both camps, but I'm interested in your thoughts and similar experiences.

I don't think you have enough 'push' factors to move and that's why you don't feel certain about doing it.

Realistically, you have four bedrooms and could swap ds into the larger one now, so you'd be moving for what, more grass outside, a bigger kitchen floor to mop, a larger sitting room to dust?

I think to face the upheaval of moving with certainty, you'd need a reason, for eg to get an extra bedroom, off road parking, kitchen diner.

Stay! You even have a spare room, and can use the extra money to get out for travel and yes, to help your DC if you want. We upsized and I regret it, the mortgage is affordable but like yours a much longer term, and the extra cleaning and mess is a pain. Also, don't underestimate how much you can miss your local networks and life, if you are happy in your area.

I think it depends on how affordable the new mortgage will be should your work circumstances change between now and retirement. We went for it and moved and doubled our mortgage term to retirement age. Although we have another property we could sell to substantially reduce the mortgage so we had a safety net (although it relies on London house prices which are sliding).

Our current house is still not perfect (tiny box room) but we now have tons of downstairs space with potential to add more. It's convenient for Central London and in a lovely area so it should hold its value. If our work situation changes then we could sell both properties and buy a smaller property outright but if course that's not necessarily that easy. What I am saying is you need to have a plan for what happens if it all goes tits up. And as someone else said, what would you be spending the mortgage money on anyway. I view paying down our mortgage as a form of savings.

If you have a spare room it sounds like youre in a four bedroom house? So not that small! I would 100% stay. What is the point of tying yourself up financially when you could use that money to enjoy life and help your children.

You can't know what house prices are going to do over the next decade or more. But you do know that your current house is too small for your needs and that you can afford a bigger house.

My parents upsized even later than you are doing and it's been brilliant. For various reasons, my 29 year old sister is living at home right now; my cousin and her boyfriend have lived with my parents at times; my aunt lived there for a while when she had health problems; I go and stay with dh and two children comfortably.

And as pp have said, your dcs probably won't be leaving home at 18. There may be gap years, uni holidays, time after uni when they are doing unpaid internships or otherwise establishing their careers. And they may well have boyfriends / girlfriends who visit or stay as well. My uni boyfriend and I used to spend our entire holiday at either his parents' house or my parents' house at the same time as my sister was on her gap year and had her boyfriend staying over occasionally too. It was a houseful! A bit further on, aren't you going to want room for your dcs and potentially other halves and children to maybe stay sometimes ideally?

The idea of having money to give your kids for a deposit is all very well, but you are a long way off them needing that money.

Also might you return to f/t work for a while as the 11 year old grows? To pay more into the bigger house or else buy yourselves an earlier retirement?

I don’t understand people saying go mortgage-free then you can save. Where can you save money these days that gives you a better tax-free return than in property - especially if it’s your primary residence? Also you still get to enjoy the benefit of your money by living in a nicer house. If you need the spare cash go pay for stuff that’s different - no point tying it all up in your house and being completely skint - but if you are intending to save I’d put it into a new house.

We're both in good jobs (me part-time), and can easily afford our current mortgage - in fact we could pay it off with a lump sum now if we weren't keeping that aside for a deposit - so the concept of "mortgage free" actually just raises lots of questions about what we would spend our income in on the future - knowing our over-cautious natures it would mostly be in low-risk low-return saving accounts! Of course we could buy a rental property, but that is less tax-efficient and more risky than investing in a new home.

OP, read this back. This is a ridiculous reason not to pay off your mortgage.

Stay where you are and for goodness' sake give your DS1 (who is presumably in the house every night?!) the spare room.

I think I'd stay at the moment, if you continue as you are then in 3 years you'll be mortgage free (and having been there before it is a nice warm secure feeling), but also have a much better idea of what your DS is going to do, he may choose not to go to Uni, also you'll be able to see some of the effects of Brexit, nobody really knows what will happen and if your secure jobs (which you rely on to pay your much bigger mortgage) suddenly disappear then you'll be up a proverbial creek without a certain implement.

I think it will work out fine either way. There is no right answer because you can't predict the future.

Is there a third way? Different house in a different area? Completely move to a different part of the country and start new jobs? If there are only two choices, I'd go with your gut and don't waste time on what ifs.

You have a 4 bedroom house, that's not small. Give your ds the larger room that is sitting empty most of time and make his current room into the spare. You should just about fit a double in there for your parents.
There is a huge difference between paying off your mortgage in 3 years and at retirement age.

Can't you stay for 3 years and give the market and Brexit time to settle and also become mortgage free so more equity to release if you then do decide to move?

Move. Even though your DCs will be leaving home in the (not actually all that close) future it’ll give you lots of room to have plus DPs plus their own DCs to stay. Your new home will be a place of joy and family parties. Plus it’ll be an investment.

I’d move if I liked the new house - investment potential seems worth it and you have years left with DC around. In the meantime I’d consider reconfiguring anyway so spare room is box room and definitely in new house give all regular occupants the better rooms and leave least favourable room for guests.

Do you already have a 4 bed house? How big is the one you're thinking of buying?

Are the grandparents over every weekend? If not, I'd think 4 bedrooms for a family of 4 is great, especially in London, so I'm guessing the issue is the downstairs living space?
Something to consider with uni::

• Your kids may want to stay at home and go a London uni - they have their own bedrooms, so maybe a garden studio is a good idea for your current place, if you are limited on living space.
• if they go elsewhere, have you checked how much your income might reduce their maintenance loan by? Can you afford to pay the difference if you upsize?

The problem here is the stamp duty. I'd look into any possible forgone extension opportunities and re-submit as the councils have become more permissive.

We're in London, although our house is not cramped. We're moving to the Home Counties in the next couple of years to buy our forever house. We figured this might be a bigger draw to our children (12 and 15) as they get older.

I would definitely stay put. Mortgage free in 3 years is a dream!

You've come this far, as you say the kids will be off to uni soon enough and then when they are home after that it will be sporadic. You'll also be in a better position to help them with getting their own places if you're mortgage free and have more financial freedom.

What you might use savings for

• have you saved up to pay the parental contribution to maintenance at Uni if they won’t qualify for full maintenance loan (for us this might be £3000 per year per child).
• For them to buy in current/?future climate they will need both a substantial deposit and a probably unreachable in early career earning multiple
• you could travel with your dc or plan some travel or early retirement for yourselves, asuming you have great pension provision already if you are not worried about finances.

Do the dc like the area you live, or are they keen to move?

Wow. It sounds like your dilemma is more about whether or not to keep up with the Joneses. Your spare room is bigger than your DS's bedroom? Give him the bigger room ffs So you have space.

Your choice is simple.
Mortgage -move
No mortgage - stay

I think it's worth thinking through what might happen in the event of a Brexit property crash though.

Look at the example of Ireland- Dublin prices peaked around 2007, in 2008 started to do what London prices are doing now- stagnate a bit, slower sales, smallish price drops. They then started a descent sparked by the eurocrisis that took till the end of 2012 to hit the bottom (some 50-70% below peak, which many experts believe overshot the 'correction' needed), then stagnated through 2013 and began to rise again rapidly- now in 2018, they're less than 20% below a 2007 peak that was viewed as an inflated bubble caused by credit.

So- people who bought in 2012/13 as first time buyers made out like bandits. I've friends who spent 500k then on a house that would have been 1mil in 2007 and prob worth 900 again now. People who were trading up theoretically would do v well too, as the bigger houses tumbled in price proportionately more, but in reality selling their houses and getting a new mortgage was v difficult and seemed too risky so almost nobody moved for nearly a decade- properties on the market were overwhelmingly foreclosure or executor sales. The people who bought in 2007 were hugely pitied but the reality is, many of them have paid off more of their mortgages now and are out of negative equity.

The point of this is to say: if you buy a bigger house now, you might watch markets tumble post-Brexit. But your children are of an age where in reality, they might want to bounce back to mum and dad in their early twenties, esp if they have a comfortable London house, and if they buy at the 'average' London age which is now early thirties, helping them out with a deposit rather than a spare room won't really happen for fifteen years or more.

So even if things go to hell with Brexit, if you're in the right house as a family to see you through the storm, and are in jobs likely to survive despite a recession, then if your new house drops in value it doesn't necessarily matter- you've a long time for it to recover. However if you are very exposed to Brexit/a recession, you may cherish the mortgage free status, and find your quality of life stays the same when many friends who moved are facing difficult decisions. Just consider that if you do decide in five years time that actually, the economy is rocky and then best thing you can do for your sons is give them a solid London base, getting a mortgage to move may prove harder.

It is unpredictable- I would personally be wary of taking out a mortgage in your position that couldn't take a hit such as one wage radically reducing, interest rates going up considerably, etc etc. But if I felt confident we could afford the new home and it would be a solid family base, I'm not sure I'd let market timings dictate.

My parents decided to move when I was 14. The new house needed a lot of work. I spent 4 years living in a building site and then left home. They have a lovely house now which is great, but it was crap for me!

Watch this!

And then think about all the things you can do when your kids have left home and you're no longer paying off a mortgage.

Stay put, pay off your mortgage. Start saving for your kids deposits for their houses if that's what you want to do. Give your DS the bigger room. My DPs parents have a huge double spare room and leave their 6'5 18 year old in the box room. It's madness why be more accommodating for your visitors who stay several nights a year over your actual children who's home it is?

I'd consider buying a 2nd property elsewhere probably on the coast and rent it out as a long term investment and/or a possible future retirement or holiday home!

No way would I take on a huge mortgage now, it's madness.