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?!

And I've not found childcare costs reduce when nursery ends!
Well, they do to an extent - but yes, I also assumed that the margin would be higher. My monthly costs per child went from around ~£1600 for the full-time nursery to ~£1000 when 30 hours kicked in (around that - don't remember the exact number), and then to ~£800 when the school started (wraparound and holidays).

@folloyourarro

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.

In SE, £13 / day for school wraparound? Childminders around me start at £7.50 / £8 ph for these hours.

@Namechange1991x

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.

I’m in Hertfordshire commuter hell, and I can tell you a 4 bed round here is more than 700k. The south is ridiculous

We did it by having a much bigger income jump than you & paying down 1st mortgage:

Bought 2 bed flat for £315k with £200k mortgage (and £80k still in savings), sold 6 years later for £515k, during that time paid down & saved to the point where we had enough to cover remaining mortgage and income had increased 2.5x (£60k to £150k). Have now bought 2nd house for £800k with 60% equity & household income closer to £200k. Mortgage is a little higher but we were able to take advantage of super low interest rates because of high equity.

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.

Exactly. We're moving to a new build four bed shortly. It's only affordable for us because it's a semi based over three floors (although all the bedrooms are on one level, wouldn't consider it otherwise). Do I want to live in a three storey townhouse style? Not particularly, but it's the only way we can afford to get more space in the area we want to stay in.

I could complain about not being able to afford a fourth bedroom locally in our ideal style of house, i.e.,1970's detached with big garden, but we've decided the extra space is more important.

No - there’s no miracle involved, private sector jobs at the same seniority would possibly pay you a combined £100k, one or both would be risky to redundancy/ relocation. It’s a different way of living with less job protection but better potentially better pay

It would be much cheaper to put your guests up in a hotel.

Detached with garage isn't an upsize (adding a bedroom), it's a significant upgrade. Are there no four-bed semis in your area?

I think it depends on 'when' you did it... SO we got our first house in 2000 (2 bed) , upsized 5 years later.. (3 bed) and then 8 years after that (4 bed)... we are now in a very nice house...

If we were going on affordability now.. we could not buy the first house - let alone the second or third..

Each time we have bought in dire condition' and done work on the house to improve it -

We've spent £60k adding downstairs space so we don't have to pay £120k plus moving costs to get something similar.

@forinborin not SE, Midlands, £13 is for breakfast club and after school club (8-6) it does vary though, I saw cheaper and more expensive when we were researching schools, ours seem about average. Just trying to show the difference from nursery to wraparound, I'm assuming nursery is usually more than £40+ in SE too! (My nursery prices are a few years out of date now though!)

You're heading in the right direction. We bought our 2nd house, 3 bed semi for 275k, combined income of 50k, sold for 445k.

We got our 700k+ detached 4 bed at the age of 40, we no longer had nursery fees, I was back at work after 3 kids (only had 2 years SAHM), joint income 85k, we extended the mortgage term to 30 years and almost doubled our monthly payments. I'll not lie, it was a scary move, stamp duty alone was nearly 30k and seemed like a massive leap financially. But now 5 yrs later the mortgage just seems normal and we've even managed to overpay a little.

With 3 kids, we still don't have a spare room, we set it up so that one has bunk beds that can be shared when guests come. So guests can have DC1s room which has a double bed, while dc1 bunks in with dc2 who has the bunk beds. However after a couple of stays, my parents refuse to stay and book in to the premier inn a mile down the road. I still don't really know why they prefer this. Only other person who might stay over is MIL and she always insists on sleeping on the sofa, I find this strange when there is a perfectly good bed for her but she says it's comfy?!?

If you are a teacher and DH is a civil servant, why don't you move "up north", should be easy enough to get s job as a teacher, and aren't they meant to be encouraging civil servants out if the south east (great idea in my opinion)

If it’s just a guest bedroom you need then it may be cheaper and more practical to either buy a small Touring caravan to keep in your Garden, or build an insulated ‘Summer House’ with space for Sofa bed or similar, and an added power supply. This makes an ideal guest bedroom, add a Camper type flushing chemical Toilet if you like, and if it’s for occasional use only, you probably won’t need planning permission either, but worth checking with your local council.
Locally one of our neighbours has done this, and pre Covid was earning a bit of cash from letting it out occasionally as an Air B&B.

@secondtimebuyer
If you're a Teacher then there is progression in your career to headships and senior management positions.

I also agree with the cost of childcare being an issue I use amchildminder so far cheaper than a nursery and it still costs me an absolute fortune.

@DontBiteTheBoobThatFeedsYou

My childcare fees for one child South East) are £800 a month.

To me that seems not bad, I paid £1000 20 years ago so with inflation that's much cheaper.

Also OP, this genuinely isn't meant to be goady, our income is similar to yours and one of the reasons we stopped at 2 children was because we knew the house (and price) we were aiming for, we'd have really struggled to increase our mortgage with 3 kids especially going back to pre school childcare. So not judging at all as house prices are sickening where you are, but I think you just need to understand your limitations with the location you are in and the outgoings your family will have.

Is there another option for a spare room?

An extension?;garden room?;conservatory with a sofa bed?

In an area where 4 beds are £700k a combined income of £84k, even without nursery fees just isn’t high enough. You either need to try and earn more or move to a cheaper area. Not all of the south east is that expensive, in fact I live in what’s classed as an expensive south east area and detached 4 beds are around £500k.

We were in a similar situation but a cheaper area to live. We hammered our mortgage and tried to overpay every month rather than saving.

I don’t think we could afford a 700k house and for an occasional use is there anything you could do like add a downstairs playroom with a sofa bed?

[quote folloyourarro]@forinborin not SE, Midlands, £13 is for breakfast club and after school club (8-6) it does vary though, I saw cheaper and more expensive when we were researching schools, ours seem about average. Just trying to show the difference from nursery to wraparound, I'm assuming nursery is usually more than £40+ in SE too! (My nursery prices are a few years out of date now though!)[/quote]
Ah, I see now. Yes, nursery here is also almost double the price. I am pretty sure nurseries are probably also nicer in Midlands too (more space etc).
The challenge is that the funding for 30 hours is not that different, so many nurseries would be creative with their pricing schedules to survive. Technically, they cannot charge top-up fees, but practically for working parents the "free" sessions are arranged in a way that you have no options but to buy additional hours at a marginally higher rate. So, for example, 7.30-9, 12-1 and 4-6.30 slots would be charged at £10/ hour, but 9-12 and 1-4 sessions would be provided free as part of the 30 hours scheme (I think the nursery is paid £4 ph, or something similar for those - which is below their break-even level).

Makes me wonder now what is the reason of living in London, if the job is remote anyway.

Honestly it can’t be that important to you op if you’re not willing to go to a four bed semi. You’re making a choice. You’d prefer to stay detached rather than habe the fourth bedroom, as that fourth bed is available to you.

You're not prepared to make any compromises, so are struggling 🤷

Can you extend the downstairs? Or put in a garden Room for guests?

OP, my only solution to this kind of problem has always been to buy a house, do it up, and make a profit. Then, finally, buy a house, do it up, and stay put in a lovely house.

If you don't have the kind of super-highly-paid jobs that buy the houses you really want to live in (in common with most of us), this is the only way.

However, you have to love mess and chaos and dust and project-managing (which I do - so much so that I'm now at the 'staying put' stage, and am desperate to start again).

It would be cheaper to find a lovely local B&B for your guests.

Pay for their air bnb when family stay? Or pay for them to rent a motor home, drive to yours and stay on drive (brilliant fun).