Please help us!

[HedgehogPJs]

Posting here for traffic - sorry!
My DH and I are really stuck and have decided to try invoking the wisdom of crowds...
It’s about our house, I’ll try and give as much information as I can so I don’t have to drip feed, so sorry if it’s very long.
Pre-Covid we decided to sell our house (2-bed end terrace) and did it up, had the survey, photos etc all good to go basically the day before lockdown was announced. We held off, but when lockdown was lifted decided to put it on the market as we had already paid the outlays etc so had ‘nothing to lose’. So it has been on the market for a few weeks at £145k. The home report value was £150k. There have been a handful of viewings but nothing going anywhere. After speaking to the estate agent (and asking her to be honest!) she has suggested she thinks it’s on too high and we should take it down to £139k with a view to selling it for £135k. We paid £155k for it 5 years ago.
We are looking to buy something bigger (we currently have 2 kids) and with DH’s salary now could go up to about £250k. With what we’ve paid off the mortgage and some savings we have, we could JUST afford to pay 10% deposit on the new place and the fees if we sold for £135k.
The other factor though is that DH works in a sector that has been hit pretty hard with redundancies due to Covid. At the moment he is part of a transfer of assets to a new company which means he is ‘ring-fenced’ from redundancy until October 2021 (unless said company went bust of course, no one is ever 100% safe!). He could then have a redundancy insurance policy which in theory would cover us until October 2022 in the event he lost his job when the ring fence came up.
So, our options are:

A) sell our house for £135k and buy for (up to) £250k, 4-bed detached, thinking being that it is a great time to buy, you get so much for your money and we can move straight to our ‘forever home’ 🤮

B) sell our house for £135k and buy a 3-bed semi or similar for circa £180-200k which would be less wild in a time of relative job uncertainty

C) sell our house for £135k and move in with my mum and dad, save like crazy and watch to see what happens with the housing market / job market for maybe 6-12 months?

D) take the house off the market, lose fees we’ve paid so far, look to move when everything has calmed down a bit, stay in the too-small house for foreseeable future ☹️ (N.B. house feels too small with a 1 and 3 year old running around, upstairs only as DH is WFH downstairs, with no real garden to speak of - I don’t mean to be ungrateful)

There are some other issues at play such as my 3 year old starting school at some point and where that will be and where we will be by then etc. but mainly we are wondering if we are totally wild to think about buying at the top end of what we can afford in this economic climate or whether we should try and buy as big as we can while the prices are low.
Any and all helpful, well-meaning comments are very welcome, we really just want to see what other people would do!

Personally I would move before your oldest starts school. It would be a shame to have to move schools once he/she has settled into Reception.

You only mention your DH's salary, are you planning to work too? If so then I would aim for the bigger forever home for £250k. Moving is expensive, no point doing it twice in a short space of time.

Re your DH's job, how about getting income protection insurance? So if he does lose it and you're not working then the mortgage will be covered. Best Insurance will cover 2/3 of a salary for up to a year if made involuntarily redundant.

I definitely wouldn't be going for option a but that's mainly because I spent two years working in a call centre taking calls from people that couldn't pay their mortgage and it was heartbreaking. I've been wary to make sure that even if interest rates jumped or my income fell, I'd still be able to make my mortgage payments. It's just not worth the stress to me.

B could be an option.

How much space do your parents have? Would your husband have somewhere to work there? If not, you'd be no further forward than option D (depending on how much you could save there - presumably you'd need to pay to put some of your stuff in storage?)

B or D for me. I'd probably stay put for a bit. A small house is better than no house - there's a lot to be said for security. Remortgage if you can to get a better rate which may help with saving towards next move. I'd be reluctant to sell up and move in with parents. What if house prices suddenly rocket? Once you've sold your house, your savings are static and might not keep up with the relative difference whereas if you have a house, it will increase ir decrease in line with the market.
Also, if you sell up and DH lost his job, your savings would be taken into account when applying for benefits which may mean you are ineligible for any help until youve burned through your money.

I wouldn't stretch yourself too thinly too soon with the big house either. What if DH lost his job? What if you fell pregnant again? What if you unexpectedly need to buy a new roof/boiler/car etc? What if DC want to learn an instrument/join a sports team etc etc etc. or you need to pay for afterschool clubs?

Why have you had a survey? I've just sold my house and bought a new one. You usually pay for a survey on the house you're buying not on the house you're selling.

@moveandmove assuming they op isn’t in England. In Scotland the seller pays for the home report

B or D.

We're in a similar quandary tbh and have opted for staying put but I am quite lazy so that influenced me too. So I would do D, but what I think you should do is B

I'd stay put and move when things are more stable

When is your DH going to stop WFH? Being upstairs only with no garden with a 1 and a 3 year old is awful. Personally I would find being in a cramped, unsuitable house with small children massively stressful so I would have to move to either 3 bed or 4 bed with outside space.

I don't know where you are in Scotland but the market here seems buoyant (Eastern Central Belt). It varies so much I guess.

Good luck whatever happens.

20k is a lot to lose on a house in such a short space of time.

I'd keep the house on the market for as long as it takes to get an offer closer to your current asking price. If it's only been on the market since lockdown measures have eased, that's not a great deal of time yet.

Call me cynical but most estate agents work on commission - there won't be a huge amount of difference in it for them if you accept 135, but that's a lot of money for you to lose out on. I'd be inclined to invest more time if you're not completely desperate for a quick sale.

Forgot to say: if you can afford it now/soon, I'd be inclined to go for the bigger house.

Interest rates are the lowest they're likely to ever be, you might be able to get a slightly better priced house, potentially. If you move now to option B, you'll be paying a bunch of fees only to pay them again when you find your "forever home", whenever that may be. There's a similar amount of risk involved if your DH were to be made redundant, albeit you might be able to pay the mortgage for a few more months if you went with option B. It's a very personal choice. Good luck with whatever you choose.

Bear in mind estate agents just want a sale, the cheaper the property the quicker they’ll do this. I’d hold out for a while or possibly drop the price by a smaller amount. People are still tentative about buying but this will improve.
What has been the reaction of those who have viewed? Have you asked for feedback?

Thank you all for your helpful replies.
To answer some of the questions:
I am a SAHM at the moment but when the kids start school I will go back to work so in theory it will only get easier to pay the mortgage.
Plenty of space at my parents, we would have a bedroom each and DH would have a room to work in during the day. Great big garden too and my DC would love being there. Plenty of storage space so we wouldn’t have to pay for storage for our things while we were there. DH and I get on very well with my parents so it would definitely be an option.
Yes we are in Scotland, in the north-east where the housing market was in a bit of a bad way anyway pre-Covid because of the oil.
DH is WFH for the foreseeable and thinks he will continue to 2-3 days a week even when things go back to ‘normal’. There’s a good chance in the event of a second wave he would be WFH full time again as his job can easily be done from home and his company were very quick to ask everyone to WFH first time round.
Feedback from house viewings has been that it’s nice but that you’re not getting much space for your money...

I'd stay put for now, work on de- cluttering and good storage if possible to make more space.

I would do option A or B, as the thought of moving in with parents would fill me dread and I would be reluctant to lose fees by taking the house off the market.

Stay put for a while. Banks won't give you a 90% mortgage at the moment.

Cam 2020 - am pretty sure Bank of Ireland are still offering 90% mortgages and thought Nationwide were planning on offering 90% mortgages now.

I believe the restrictions on 90% mortgages only apply to first time buyers. As we already have a mortgage we would be able to get a 90% mortgage, at least with the lender we are already with.

Not really what you asked, but what's the reason for your DH not working upstairs so you and the children can have the run of downstairs during the day? Seems odd to do it that way round.

In your shoes I'd probably stay in the current house and wait. Similar happened to my mum in 2008 when house prices fell through the floor and she stood to lose £30k on what she paid for the house if she proceeded with the sale. She took it off the market and waited a few years and managed to sell it in 2011 for £5k over what she paid for it. Obviously these times are different and house prices might not recover to the level you paid.

If you really can't stay in the house I'd probably explore the option of living with parents initially and see how you get on. If it really becomes unmanageable or you're not happy there, you could still leave to buy your own place at anytime surely?

Not sure if this has been covered already but is there an option to extend where you are? Or could you swap houses with your parents ( assuming they are looking to downsize at some point)?

That's not correct about 90% mortgages. My understanding is that unless it's HSBC or Platform you will struggle to get 90%

I have just looked at mortgages as we want to move to a bigger house. (We currently have an 85% mortgage) unless I can find a 20% deposit we can't do it. - we can't port out existing mortgage without the extra deposit.

I suggest you look at getting a mortgage in principle before making any big decisions.

I've just bought a house (not first time buyers) and were told there are currently no 90% mortgages. We put down 15%.

I put my previous comment about 90% mortgages as my OH is a mortgage advisor and that's what's been offered currently.

Could you rent out your house while you stay with your parents and save. That way you've got the option to move back if you need to and you'll still have the same options later on when things (hopefully) get back to normal.

DH gets up much earlier than the rest of us so goes downstairs to start work while we are still upstairs in bed. Also, the 1 year old naps in her bed upstairs during the day so DH wouldn’t want to be next door whispering on conference calls. It’s also better to be upstairs closer to the bathroom for the 3 year old!
We have been told by mortgage advisor that we could get 90% mortgage if we stay with same lender. Don’t know about if we switch lenders. Think it depends.
We wouldn’t want to extend as we don’t love the house or the area, it was really just supposed to be a starter house, not where we want to be long term.
Lots of good suggestions though, thank you all.

Could you work on improving the garden as that may add value now?