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’d move to a bigger place if I were in the London market and could afford to do so. It’s would be very unusual if the price didn’t rise considerably in the next 10 years, you don’t have to stay there until you retire.

We are in a tiny terrace with toddler twins and I know we will have to move before they get to secondary school. Doesn’t mean we have to stay in a bigger place forever.

We were in your position and stayed. We paid off or mortgage then saved our mortgage money to give our children a deposit to buy their own home, which they have both done.
Very happy with our decision.

This is going to be the most boring post in the world, BUT... it sounds like you would really benefit from advice from an independent chartered financial planner, ideally from a financial planning firm that is also chartered.

A good adviser teases out your wants and priorities; raising issues that may not have occurred to you; exploring the potential ramifications of any choices you make. They also have sophisticated risk profiling.

People usually underestimate their financial needs for retirement, which given lifespan and care costs, are immense. You also need to consider the risks of giving adult children help with housing and ways to mitigate them, eg in the event that they marry and then divorce/ you live into your 90s and need a high level of care for 20 years.

It’s not all negative, with some clients, the IFA has the job of helping the client see they do have X disposible income/assets even with a conservative approach to risk and future provision, and encouraging them to identify how they can use use it to do things that will make them happy; that may be spending money on travel, getting the garden landscaped, helping children financially.

I’m not a financial planner but I do work part time now in the sector in a different role.

If you have an accountant, it’s not the same thing at all, some accountants might dole out informal financial advice in response to their clients’ questions, but it isn’t their area of expertise unless they have high level financial planning qualifications. The entry level qualifications for financial planning are basic, but the proficiency required to achieve Chartered Financial Planning status is very high, so narrowing your search to Chartered IFAs only is a good start.

Personally (not professionally - I have zero financial planning expertise) I’m very risk averse, so I’d stay put; swap the bedrooms around so guests are in the smaller bedroom, - there are really comfortable sofa beds if a double bed would look daft; and go an see an IFA for advice.

I would stay (but I'm pretty risk averse) and reconfigure so the bigger spare room goes to your son. I've had a similar dilemma recently and come down on the side of the person who spends the most time there should get the better room. If the box won't take a double (tho a spare room only needs a bed in general) then keep a single in and he decamps when they stay?

Buying a property isn’t just about the financial aspect. It is pretty emotional too and you don’t sound ‘in love’ with the new property. If you are only upsizing because it seems the right thing to do because your neighbours have done so then you may very well regret it. Can you not wait 3 years until you are mortgage free ? Have you asked your dc if they are unhappy in their current home ? We are in London and will be mortgage free in 8 years, I would like to move as there is always something nicer out there but like you don’t really need to. I think mortgage free massively outweighs owing hundreds of thousands of pounds until I am 65. (Shudder)

We had similar, our circumstances meant that financially a few years ago we could have moved to a much bigger property, BUT DS was already 18 then and DD 15, our house wasn't too small, 3 bedrooms plus loft conversion, nice area, lovely spot. We have invested 1000s in this house and it is lovely and much loved. So we paid off the mortgage instead.

We are now mortgage free, having fabulous holidays, have good pensions and will have significant savings by retirement and can help our children.

DC are in their 20s now, one saving to buy a house one just graduating. They are only here part time.

We don't need more room, we are financially very comfortable, we still love our house. If we had gone bigger, we would probably end up down sizing and to what? maybe something we don't love as much as this house.

Staying worked for us.

I’d def stay assuming you have a bigger spare room you can put your son into. (Think it's madness he’s not in there anyway!) Then you can pay for a hotel for grandparents or just move him back to the small room when they stay. Then be mortgage free. I would love to be mortgage free. Sounds like you don’t need to move at all if you give your son the bigger bedroom.

My sister only moved back for a year after uni and I never did. I’d stay put rather than have a mortgage the rest of my life. Or move now and move into a smaller place when they move out and pay the mortgage off then

We were in a slightly similar position, the huge dream house sale fell through as the survey was horrendous. We didn't have a mortgage as had paid off house but were going to get another mortgage. Then I fell ill and now I don't work.

It's not an exact same scenario but honestly having a mortgage paid off is always preferable as you never know what is round the corner. Give your DS the bigger room, he can always temp move back to the small room when they visit.

It is difficult to say on the information you have given. We have a reasonable size 4 bed semi (following an extension) in London. We moved out from a 2 bed flat in the centre because we really did need the space. It has made a big difference to our life even though it means a mortgage running for longer. The extra space with teenagers and an extra bathroom really helps. We have a reasonable size garden which allows me to kick the DC out to play (14 and 10) / muck around.
We could stretch to a bigger house but we have enough space. I would like a bigger garden but I don't want a bigger mortgage.

So my advice would be to take a cold dispassionate look at your situation:-

1. Is your current house really too small?
2. Could you use the space better?
3. Could you extend?
4. What would a new house bring you that would justify the financial outlay?
5. Could you spend some of the money you would spend on a new house to solve some of the problems with your current house?
6. Which area is most likely to meet your needs best in the future?
7. Are you planning to move out of London or to a different part of London when your DC leave home?
8. Have you got any health issues, caring responsibilities that mean either of you might have to alter your work patterns?
9. Are either of you in unstable employment e.g. contracting or in an industry that is going through a lot of changes?

10. Would your location affect your DC's schooling or friendships?

Also, have you priced up moving? What would you pay in stamp duty and solicitor's fees etc? What about the kids' school - would they be moving school?

Time goes differently for kids and they will still feel like they had a big chunk of growing up in the new house. So it depends whether you think the new house will be better for them or that having more money will be better.

A bigger mortgage will not feel so big in a few years, as long as your income keeps increasing with inflation.

We will have a mortgage till we retire, but intend to pay it off quicker once the kids leave home and we have more money (we have 4 though so very ££)

Gosh I’d stay put! Save your monthly income and use that to help your children.

You don’t say if you are in a desirable part of London but if you are then your property will increase greatly anyway.

Is the new property in a less desirable area since it is bigger?

Mortgage free in 3 years probably means you could fund them through uni.

Are the boys in similar sized rooms?

I'd avoid the argument of "why did he get bigger rooms" when they are both 6footers. What I'd be tempted to do is use the spare room as a shared games room. Put a sofa bed in for granny but have it somewhere the boys can use so their bedrooms are spaces to study / sleep.

Stay where you are, no doubt at all

Mortgage free in London would Be amazing
Move your son into bigger room , use smaller room for guest room

Stay! The only comfort I got from the massive mortgage we saddled ourselves with is that dcs were 9,7 and 4 (3 years ago) at the time so I knew it would be a full house for a long time. Your mortgage being paid off in 3 years is brilliant. That kind of security is still a long way off for us.

I'd move if I were you. You'll all enjoy the extra space. And agree with PP about them getting bigger and going to University, it doesn't mean they've left at all, far from it! I grew up in a big house and it was great to be able to bring loads of friends home for a weekend even though we were away at Uni, especially if you live in a city.

I don't get the general obsession with wanting a big house, I know lots of people struggling to pay big mortgages just to live in a detached house or the right area. I never expected to be paying the mortgage on my own, but here I am and I'm glad we didn't stretch ourselves with a big mortgage or I'd have been screwed.

Well to be fair, unless you're in negative equity, which is fairly rare, you can downsize and get a smaller mortgage, so it's not something irreversible.

In addition the higher the value of the house, the more financial value is associated with a percentage increase. So for example ten percent increase in ten years is worth much more in a 600k house than a 200k one.

You can still sell the 600 k one, and buy a 200k one with a smaller mortgage.

So you have a four bedroom house in London, with the potential to be mortgage free? I would definitely stay put! Just the stamp duty cost of moving is astronomical.

If you’ve got a 4 bed in London you’re in a fortunate position. What would the next step up give you? And would those extras be worth it.

For me, it would depend on how old you are, health, job security, monthly payments of the new mortgage. My mortgage currently runs until 64 and the thought terrifies me. I’d love the freedom of being mortgage free but it’ll be a long way off for me even with overpayments. For you, the balance of financials versus benefit will be different and very personal.

Completely agree with Bluntness

I’d move.

I’ve just moved into a house with far more useful space inc an extra bedroom with dc aged 12 and 8. I was v wary of making the jump from a smaller place that I was familiar with and could have paid off the mortgage in about 7 years to this place where I’m mortgaged until retirement...27 years time. I chose to move because I could afford to, I wanted to enjoy the better quality of life that this new house brings, I intend to sell and downsize and be mortgage free when I want to retire rather than when the mortgage term ends.

If prices fall that’s ok, I’ll ride out the storm. When I do downsize I would hope to have enough equity to buy one smaller property out right and buy to let one or two flats which the children could live in as young adults at a reduced rent ie cover the mortgage.

I'm with @ikeameatballs - move. There is a joy in the extra space it's hard to put into words. Your littlest has 7 years in the new house - that's a long time!
You can always downsize later on.

Thanks all - I agree with most of what everybody is saying, including those that say we should move, and those that say we should stay :-) ...

Answering some questions ....

1. Is your current house really too small?

It was originally a 2-bed terrace but we went up into the loft, and extended at the back, so now it has 4 bedrooms. It's live-able with, but it's tall and narrow, and only has two rooms downstairs (a long thin lounge and an extended kitchen/diner). When DH wants his own cosy corner to read a book or whatever he goes up to the bedroom, which I find annoys me.

1. Could you use the space better?

Yes - we would re-configure the loft rooms if we stayed, so that we move up there and DS1 gets a bigger room on the first floor. He's never complained about his small room - he only uses it to sleep - all his tech and study space is down here on the ground-floor. But heading towards GCSEs he could do with study space in his own room.

1. Could you extend?

No - we've done all that can be done. The only scope would be downwards, and that's a risk too far!

1. What would a new house bring you that would justify the financial outlay?

The place we're looking at buying is a semi, with a loft conversion, so wider, with more downstairs living space, including a second living room which could be a TV/tech room for the boys. It has enough space in the garden for a studio or games room. It has off-street parking (parking in our current street is dreadful and can be really stressful). It has a bigger garden - so we can get a teen-sized trampoline, and still have space for a tent for when they want to have camp-overs. It's in an adjacent suburb that we really like (though we do like where we are too). It's closer to DS1's secondary school, where DS2 will be going in September.

1. Could you spend some of the money you would spend on a new house to solve some of the problems with your current house?

Yes, but only some of them.

1. Which area is most likely to meet your needs best in the future?

They both meet our needs, and they're only 10 minutes apart by car/bus, but there are a couple of things we love about the new area that we would make more use of than we currently do if we were within walking distance.

1. Are you planning to move out of London or to a different part of London when your DC leave home?

No explicit plans. We sometimes talk about it, but we don't have a natural destination, so indecision is likely to keep us where we are. We're both from the north originally and don't expect to move back there.

1. Have you got any health issues, caring responsibilities that mean either of you might have to alter your work patterns?

Nothing at the moment. I work 0.5 FTE and do lots of volunteering in my "spare" time (school governor) so there is scope to cope.

1. Are either of you in unstable employment e.g. contracting or in an industry that is going through a lot of changes?

No. We're both in secure employment. The main 'risk' is that we'll get bored and want to move employer at some point. But we both have employable skills and there's no shortage of jobs in London.

10. Would your location affect your DC's schooling or friendships?

DS2 is about to go to secondary, and the new area is closer to his new school, so it could affect it positively. He would also be able to walk to school rather than taking the bus. We're on the edge of the school's catchment at the moment, and chose it over another more popular school in the other direction, so there are fewer potential classmates where we are. But, having said that, DS1 has coped ok - it's only 10 minutes away on the bus.