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?!

I think upsizing is like the first purchase. You have to be prepared to sacrifice other things to take that step. We were in our mid 40s and settled in our 3 bed house when we got the urge to move. We went from a £125k loan with 7 years left to pay to a £500k loan with a 15 year term. We had to go back to first time buyer level financial expectations with no holidays, meals out or takeaways or unscheduled treats We could only do it because our youngest child was 12 so we didn't have childcare costs.

I can honestly say we have never regretted the move. The new house was more a convenient commute for DHs work and DCs schools. I took on extra hours to pay for treats and by overpaying the mortgage whenever we could we paid the huge 15 year loan off in 9 years. And most of all, the extra space has been an absolute godsend during lockdown.

This is why hugely increasing numbers of people stay put, knock through the side return by their kitchen, put a mansard roof on and build up in to the loft. Fewer people can afford to trade up now once they’re on rung two of the ladder, so they extend.

It’s very understandable given house prices, though I always feel a slight twinge of sadness when I see a 150 year old house than has basically remained unchanged get modernised beyond all recognition as a kitchen diner extension gets put in, but that’s just me...

I'm usually sympathetic to people getting on the property ladder- but honestly, I'm struggling to find some empathy with this one, I really am. Everyone would love to have three kids, a detached house and somewhere to put up relatives- but realistically most people, even those far on in their careers, just aren't going to have all of those things- something has to give for pretty much everyone, either have fewer kids, have a non-detached house, or just don't have a spare bedroom for the rellies like 90% of the population.

You can't infinitely upsize, you just can't. A four bed detached house isn't your normal family home these days, most of my friends are in professional jobs but most don't have spare rooms for family, and if they do, it's because they have fewer children than you. The only ones with all of it were in the city and got out aged 40 with a fortune. Everyone else just has to cut their cloth accordingly!

I think the problem is the mismatch between your income and the area you’re looking to buy in. Round here (London commuter belt) an ok 3 bed semi costs £700k, but the average salary of someone in their forties/fifties is well into six figures (unless they’re public sector in which case they have a problem and have to either long term rent or move to a cheaper area. It is ridiculous and awful I know.)

The other ways people afford it are either to inherit/borrow from family, or by making a huge profit by having bought their first home in a lucky time/place.

Houseofvelour very much depends on where in the north west though. Where we are £295k would buy you a 2 bed mid terrace. 5 bed detached would be £650 at the very least.

Glad we bought fixer-uppers and kept building equity , we definitely couldn't have afforded this house now on our income. The figures being mentioned are insane, especially the childcare costs-really are some people spending £20k a year on each child.

When we have had family and friends visiting we usually get them a hotel deal or something similar, certainly wouldn't considering getting another room -that would be encouraging them to stay more

Yep it's all nuts. And then throw in trying to get a house in the right catchment for secondary, and that easily adds 30% yo the price. We own a 5 bed with huge garden, bought for 335 and now supposedly worth 500k, but its catchment is the worst comp in the country, literally. Could move but that's 200k extra for the same house in catchment. Absolutely love the house though and never want to move, so I guess out kids will just end up working in Tesco's

You are effectively going from 2 bed to 4 bed though as you created the 3rd bedroom. Could you find a 3 bedroom which could then have a loft conversion to make 4, or somewhere with room for an extension?

The people I know with the next rung up have made a ton of money in London or sold companies.

We live in a semi and it's worth £875/900k. The next step up is £1.25M

Funnily enough we don't have £400k lying around. We could add it to our mortgage but decided to send the children to private school instead.

We live in a town and may move out in a few years and do a sideways move to get more for our money but round here it is just crazy!!

We bought houses that needed a lot of work. DH is very handy and does pretty much everything he can legally do, except plastering and carpet fitting.

We also overpaid the mortgage, however this is the last house we will be doing this much work on and we don’t have a mortgage for this house as we have had enough of being tired all the time.

However, in your shoes I would squish the dc into one room or bring one in with you and let the others share to free up their bedrooms when you have visitors , maybe with a trundle bed or a blow up mattress on legs or even let the dc have a double bed so their rooms are ok to put adults up occasionally.

Getting into so much debt seems silly if it’s for entertaining visitors.

I don't think the fixer-upper route works as well as it did years back either. Of course it depends on area, but if it's already an expensive, high demand area with good schools, people pay almost just for the plot. They might do it up for their own family, but there's no profit in doing it up to sell as they'd had to pay full whack for it in the first place.

Hi so give me your budget your area and preferences and I am fairly confident I can find you a suitable house, I do it as a hobby for friends , family and friends of friends x

@secondtimebuyer1

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!

So you have to compromise A four bed semi means you Go from detached to semi to get more space inside Or move area If you want garage etc

We had 3 children in a 3 bed and managed to put visiting family up whenever they stayed. You don’t have to have a guest suite!
One Christmas we had the 5 of us, MIL, SIL, my sister, partner and 2 kids!
It’s doable for a couple of nights. Kids can bunk in with each other or you can get a sofa bed for downstairs.
I’m assuming when you say you stay with family you mean your parents /in-laws who have family homes with empty bedrooms since you have all moved out. I’m sure they don’t expect the same in return. Find a hotel, all they have to do is sleep in it. Can rock up to yours fro breakfast and leave last thing at night when ready for bed.

We moved a bit further north (different school, but better) and bought a place that needed modernisation. Made 100k in 3 yrs, now gone 5 miles further north, halved the mortgage and house has the extra bedroom and is generally huge!

You bought 8 years ago.

Your wages have risen in £ terms but have not risen by anywhere near as much when you take into account inflation, and the house price rises in excess of inflation.

Your £50k salary in 2013 would need to be almost £60k in 2021 to have simply kept pace with inflation.

Nursery fees and house prices are two areas where inflation has probably massively exceeded wage inflation during that period.

The only people affording to upsize are those who have had wage increases exceeding house price inflation.

Eg if DH and my income had been 50k in 2013, it would be £125k based on the % rises we have actually had.

Are you me?! Bought in 2013 2 bed do-er upper bungalow for 250k ish. Borrowed some money to put an extension and do it up and it's now worth 400kish. We also want to upsize as our DC get older and to make space for family, and to be near a better secondary school - also looking around 700k for this.
Basically, the only way we've done it is to move abroad for two years and intensively save. We're just coming to the end of this couple of years and it's been totally worth it - we should be able to afford it now without getting a mortgage that's frighteningly big.
Feel your pain - don't know how you do it otherwise.

If you are a teacher and DH is a civil servant, why don't you move "up north"

Read this a lot on here (and have had the same advice myself). It is really not as simple as that. For us it would involve moving away from aging parents (and having to drive down all the time as they get older again), our DC seeing much less of grandparents, being far from close friends and support networks. Moving to the other end of the country isn't as simple as it sounds - perhaps you'd get the house you want but you'd give up a lot of other things and not everyone is comfortable with this.

Also a civil servant and we moved a 2 hour commute away to achieve this. Ironically now closer to family so they no longer stay over! Since then I've also applied for promotion so that helped but wouldn't have bought us another room in London. We had moved regularly upsizing by improving properties and moving to less desirable areas each time.

Is OP coming back?

Having family stay in a hotel isn't the same. When we go up north we're always ' put up’.

It’s mot the same. Personally, I think it’s much nicer to have some space and opportunity for privacy. We used to stay on a sofa bed with air beds and travel cost crowded into one room at my in-laws. The discomfort was fine but the feeling of having to keep tint children quiet, of not being able to choose what they ate, not having unfettered access to bathing and having to ‘help’ toward the costs mad it a challenge rather than a pleasure.
Once we’d identified a nice, short-term rental, flat about five minutes walk away visits became much more comfortable for us all. Comfortable beds so we all slept, a television for the mornings, long, hot baths or showers, no grim rubbery scrambled eggs for breakfast - we visited Bath more frequently after we found somewhere that we enjoyed staying.

It’s the area. I found the most lovely house yesterday that DH and I were drooling over. It’s at least £45k under budget but we’d have to move 30 mins away from where we are now. Not a problem tbh. A similar house where we are would easily be £200-300k over budget 😬😬

3 bed detached where half of the garage is converted into a study/playroom that could be used as a 4th bedroom when guests stay over? We have a similar set up (with only 3 beds upstairs) and our house was considerably cheaper than detached houses with 4 upstairs bedrooms.
Or just wait until you're not paying nursery fees? Moving out of the area or moving from a detached(?) to a semi seem a bit drastic.

Have you considered an office in the garden OP? (Assuming, because it’s a bungalow, that it’s on a large plot). We have houses being built near us that have offices at the end of their gardens as standard, each with their own shower and loo. Something like that can be used as a 4th bedroom or office with some clever design, and wouldn’t cost more than around £25,000 to install (less if you’re prepared to do some of the work yourselves)

@AnnaSW1

I'd guess just move to a cheaper area. I agree though it's better to buy a sofa bed than increase your mortgage just for family visits. That's what Kirsty always says

I always remember Kirsty being appalled that one couple wanted a house with a spare bedroom for occasional family visits - she pointed out how many tens of thousands of pounds that extra bedroom had added to the cost of the house search and questioned whether tens of thousands of pounds would be contributed to by the occasional visitors or maybe other much cheaper options for visiting family might be possible (of course there are many cheaper options by thousands-fold). To justify the tens of thousands of pounds, you would need to use it as a part-office or part-studio or part-playroom etc. Otherwise it is a colossal burden of debt.

But to upsize, you need to follow other advice from K and P, and buy the crappest house on a nice street. That house can then be improved gradually as finances allow. But buying an already-nice house on a nice street is a luxury most cannot afford if upsizing.