How do you upsize!?

[secondtimebuyer1]

This is a very first world problem and I know we are lucky to a) own our own home and b) have stable incomes.

We bought our first home in 2013 for £285k- a 2 bed bungalow. In 2015 we borrowed an extra £50k and converted the loft so we now have a three bedroom house. Mortgage is now £203k and house is worth £420k. We are desperate for a 4th bedroom so family can stay (post lockdown) as they all live up north.

When we bought our combined household income was just under £50k. We have progressed in our careers and our combined income is now £84k - despite our pay increases we still can't afford to upsize. A detached 4 bed with garage (our forever home dream) in our area is £700k- these are relatively normal family homes. We'd need a combined salary of £100k+ to afford a house like that- how do normal families afford it? We both work full time in professional jobs, nursery fees are crippling and I feel like we're just keeping up. If we were first time buyers we'd need a £42k deposit just to buy our own home- would never have happened!

AIBU to think the only way to really upsize, in the south east, is win the lottery or inherit?!

Loads of ways.

Bonuses, inheritances, life insurance payouts, pay rises/career progression, being mortgage free or having a small mortgage on their current home so they have a lot of capital to buy the next home and only require a medium mortgage, moving to cheaper areas, consolidating properties (couples buying together selling two cheaper places).

Most people don’t live in 700k houses is how

Sorry , I think you’re absolutely mad to even think about taking on more mortgage debt to have room for family to visit .
You’d even be cheaper paying for a hotel for them when they visit !!!
Do the sums ..

I said similar to a friend when she was considering an extension to have a larger dining space for her family to come every second Xmas ..
Pointed out that she could fit the bill at the local restaurant for them all and it would work out cheaper !
She did exactly that !!

Why are you only considering a detached? A four bed semi or terrace would be more affordable, yeah lots of people would like a detached but you’ve got to have what’s within your means

I think when the OP talked about £700k and ‘normal family homes’ she was talking about the architecture/style of house. She was saying that it doesn’t buy you a big or fancy house where she is, just what a lot of people would consider a pretty average house and think “you could buy that for half the price where I am”.

Once nursery fees are through& you have climbed the career ladder & paid off more of your mortgage then you may find things look more achievable. We found a promotion each and the end of nursery fees suddenly opened up the "next step" .

But if not then a 3 bedroom house with decent equity in it sounds like a perfectly good set up tbh!

I agree with other posters though, I wouldn’t be killing myself to upsize just to accommodate occasional guests.

I don't know but I'm stuck in a 2 bed terrace, DH and I work in the public sector/NHS and no real prospects of a pay rise soon, no opportunity to extend or add value. I live in a cheap area in the north east and would love a 4 bed for the downstairs space. Not going to happen though . BIL (husband's brother) and my sister each have gorgeous 4 beds in expensive cities and it just feels so unfair.

How about something like this, for less than the cost of stamp duty.

The biggest variable is probably nursery fees. If you wait until your dc start school you may be in a better position.
This is not necessarily true (that's what I thought too, and burned myself a little bit). Depending where the OP is in the South East. In my children's school, wraparound care (breakfast + afterschool clubs) are £30 / day, childminders are similar (starting at £7.50 ph). Add the holiday childcare cost smoothed over the year, and you easily have £700- £800/month per child. Cheaper than the nursery, but not quite the amount which allows you to completely forget about it.

You'd be better off paying for them to stay in a hotel. What about a 4 bed, not detached, with no garage?

Or somewhere that can be extended?

I think there are a lot of compromises to be made when buying a house, unless you earn a fortune. So what are you prepared to compromise?

@BalladOfBarryAndFreda

I think when the OP talked about £700k and ‘normal family homes’ she was talking about the architecture/style of house. She was saying that it doesn’t buy you a big or fancy house where she is, just what a lot of people would consider a pretty average house and think “you could buy that for half the price where I am”.

Yes, that's what I understood as well. To be honest, house prices around my area started to scare me too, they are in the region mentioned by the OP for a perfectly ordinary house, nothing fancy, not even detached.

People in those homes probably paid no where near £700k for them, they probably paid a lot less and it’s increased.

House prices are disgusting in the SE. We are moving further out, what’s the point of living near London and paying for that privilege when we don’t even work in London!

We are holding off moving house until DD2 becomes eligible for free child care. Our childcare each month is £200 more than our mortgage

It will also hopefully mean that I can work an extra day a week

Sorry, just catching up on replies. We couldn't afford to move again- the stamp duty holiday is not likely to be extended again or indefinitely which is why we'd only move to a 4 bed detached with garage- it's this home (perfectly fine just a bit of a squeeze) or that; a 4 bed semi would be £550-600k and we're already detached.

Having family stay in a hotel isn't the same. When we go up north we're always ' put up'. We can't move- DH's job is limited to this geographical area.

Earning an extra £16k between us is likely to take a long time unless we change careers. I am a teacher and DH a civil servant- no bonuses, no mega pay rises!

We moved areas in order to upsize to the house style we really wanted. We could only afford "the next step up" in our last location, but our kids are already primary aged, moving 20 miles enabled us to afford the long term family home that will hopefully suit us a long time until we downsize. Adjusting to the location still but pretty sure it was the right decision.

300k for a 4th bedroom when you only have 2 kids is just insane.

Look at other compromises - smaller garden perhaps, a bit further out, semi detached, somewhere on a main road or a bit tight for parking, or yes just stay and pay for hotels for guests. We moved to the edge of town into a not very fashionable estate. I'd love to move into the centre of town but like you say, £700k is outside my budget. All I can suggest is you change your perception of what's normal!

If a fourth bedroom is that important you buy a semi detached house. If having a detached house and a garage is more important you have three bedrooms. Unfortunately you pick what your priority is.

It seems a lot of money for family to stay-how often do they actually stay?

When my family stay, they stay at the local travel lodge because of space in our house. It works well, and it'll take an awful lot of nights there to make up anything close to £300k.

Well we deliberately bought houses that we could add value to. Fixer-uppers, up and coming areas. That sort of thing. Our first house went up 40% in value because of that and our current house is worth about 1/3 more than we bought it for 2.5years ago. For us, until we get that forever home, houses are investments, not just homes. We buy with our head more than our heart.

And I've not found childcare costs reduce when nursery ends!

@NeedaLittleNap

300k for a 4th bedroom when you only have 2 kids is just insane.

Look at other compromises - smaller garden perhaps, a bit further out, semi detached, somewhere on a main road or a bit tight for parking, or yes just stay and pay for hotels for guests. We moved to the edge of town into a not very fashionable estate. I'd love to move into the centre of town but like you say, £700k is outside my budget. All I can suggest is you change your perception of what's normal!

We have 3 children. 11, 6 and 2.5

I agree with other posters
What is the point of skinting yourselves to accommodate occasional guests??? That makes so sense at all.

Putting guests in a Hotel or air b n b is a better option or a Sofa bed in the lounge even or as people have suggested, a cabin in the garden you could even use for air b n b also and get some extra income.

I wouldnt stretch myself for that reason at all - people understand and property "up north" is more than likely considerably cheaper than where you are.

And I've not found childcare costs reduce when nursery ends!

Really? Daily rate for wraparound care is £13 where I am, daily nursery rate was £40+ and it still wasn't equivalent to £13 per day with 30 free hours due to wraparound and food costs.

I have a 3 bed detached we bought for £247,000. Now worth £275,000. Intrigued where you are from as for a four bed it'd be about £300,000.

We added £95k and 5 years more to our mortgage to step up from 2 bed terrace with no garden to a 4 bed semi with drive and garden. We bought a doer upper (everything needs doing!) in order to get what we wanted where we wanted.

It took us 5 years or so from when we decided to move to reach the point where we were able to financially.

We’re now mortgaged until 65 & 70 unless we over pay at some point. But we finally have enough room and a house we love which we’re fixing up ourselves slowly.

It’s bloody hard to make that step!