WWYD - Housing - upsize, downsize, overpay or stay?

[Bamboozle123]

I have 33% equity in my house currently but I'm considering moving because my circumstances have changed slightly so I'd potentially move to a more vibrant area.

My earnings have also increased. I will have a further £450 per month in 2 years time when my student loan is paid off.

I don't need a bigger house and will never have children or buy with a partner. I dont expect I'll have anyone to leave my house to when I die.

I'm wondering whether I should:

• stay and change nothing (putting money into savings each month plus mortgage)
• stay and overpay the mortgage (I can do this up to 10% PA I think - I could afford 3-5%)
• move to the more vibrant area and buy a bigger and more expensive house which will obviously be worth more in the future (but I always worry about over stretching)
• move and buy a smaller / cheaper house so that I can become mortgage free sooner but have a smaller 'nest egg'

I haven't explored other things like extra pension contribution, LISA and so on.

Very interested in what others have done or would do in this position

Hmmm, I think i'd be tempted by moving to a more vibrant area? Can you do this without completely stretching yourself? Or downsize into the new area?

Other factors I'd take into consideration are your age (eg will living near bus/train routes be good if you are elderly and unable to drive for example)

Also are your earnings likely to increase much, eg are you going to be going for promotions and new jobs much or are you happy with your current level of income

What else do you like to spend your money on? Would you like to have more income to spend on hobbies or holidays or perhaps you arent too bothered about that.

Definitely move to an area which will make you happier if it will.

Size is something only you can judge. Do you entertain, have guests to stay, have pets, enjoy gardening, cook a lot, enjoy painting large scale canvases? Huge numbers of variables.

Lastly, what is your future earning power? Would you grow into a larger mortgage or would it always be a concern? Can you easily afford the bills? (Our energy DD has just gone up to £690 a month).

I stayed (rural quiet non vibrant) & overpaid my mortgage. To be mortgage free was soooo liberating.

Having done that if you are still young enough to buy again with another mortgage, to the vibrant area, review things then.

Im a great one for contingency & future proofing. This worked for me.

After 2.5 years in a "starter house" (standard new build 3 bed detached), when our circumstances allowed, DH and I moved from outer edges of city (town with fields around it) to a more suburban village of same city to a similar sized but 20 years older and tiny garden house. For transport links and other services locally, as we spent pretty much every weekend going to that location away from our house.

We are now more than 20 years I that house. We did the urgent things when we moved in (repaint, replace avocado green bathroom, put in electric shower, replace rotting wooden single glazed windows etc), then overpaid mortgage when we could, did 2 extensions (out back for decent kitchen/diner and downstairs bathroom, and into attic for decent sized bedroom turning box room into office) and have done things to upgrade more recently (wood burning stove instead of open fire, solar panels, extra insulation, built in nice bookcases etc).

We fully paid it off 2 years ago. We are highly unlikely to move again. (I did have DH when we bought, we have 1 Dd now late teen but won't have more).

So my suggestion is get a house that has a good location, that you can live in now and slowly improve over the years as funds and interest/your energy allow, overpay what you can to reduce interest costs long term, and enjoy a comfortable space that is yours for as long as you will want/need it.

move and buy a smaller / cheaper house so that I can become mortgage free sooner but have a smaller 'nest egg'

Why would moving and being mortgage free mean you have a smaller ‘nest egg’? Surely then you’d pump your freed up money from mortgage payments etc into stock market investments and pension. You’d be as well off or better in the long-run. To free up your ‘nest egg’ in the future from a bigger house, you’d have to sell up and move somewhere smaller anyway. Seems mad if you don’t actually want/need a larger property. They cost more to run and maintain so you’re spending more in them over the years in maintenance, running costs and mortgage interest than just sticking loads into investing and your pension.

Personally I wouldn't spend more money on a house than you need to, i.e. if you don't need a bigger house, don't buy one: you'll pay out more for the house/heating/etc. for no reason. But if you would prefer to move to a different, more vibrant area, go for it...just no need to buy something more than you need. For example, if you were buying a new car, you wouldn't buy a people carrier just to drive yourself around in would you?

By not spending more on a house than you need to you can gain financial freedom sooner, i.e. pay off your mortgage, invest in your pension/savings, and have a good disposable income. That will also give you peace of mind.

You’ve said you’re only ever going to house yourself, and you’ll therefore also potentially have to rely on your own finances in retirement, not sharing living costs with a partner. You don’t want to leave your property to anyone, so it’s purely for living in not investment/inheritance.

So plan for what will give you greatest long term security (I’d say mortgage-free ASAP in a property that’s efficient to run) and start aggressively saving for the things that will bring future you pleasure too.

Is the more vibrant area but with a same size and/or same price home an option? No need to go bigger in your circumstances.

A real range of opinions and food for thought. Thank you!

The main thing that puts me off moving is the hassle and stamp duty. Moving like for like then feels like a lot of effort for not much return!

I'd definitely be keen to be mortgage free ASAP but I'm quite intimidated by investments and stocks so I feel like property is safer?

I still have 35+ years until state pension age so loads of time for mortgage repayments. And yes I expect to continue in my career and earn more.

Good idea and sounds like it has worked well for you.

However, I really can't stand decorating or home improvements so it sort of sounds like my ideal of hell 😂

I'd move to an area where you will be happy to live. You can always purchase an investment property down the line if you wish for nest egg. Or look for a house with an annex you could let.

I'd move to a more vibrant area , somewhere a single woman can feel comfortable; and buy a place that's the right size for your lifestyle. Make a wishlist. Do you need a spare bedroom and a study or could one room be both? Do you need groundfloor access for pets, or would you prefer a top floor flat. quiet and secure? would you like a dressing room? bathroom or shower room? one or two?

I get where you are coming from...I looked into moving recently because in an ideal world I'd like to be closer to the park where I walk my dog (so I don't have to drive there/back), have a driveway and an extra room downstairs. But...I don't really NEED any of those things, and to get them I'd probably have to pay for a house with more bedrooms than I have now or need. Otherwise, like you said, you're paying stamp duty and moving costs just to move from like to like. I would rather put that £10k in my savings/pension/towards paying off my mortgage. So I'm staying put.

As for investments, look into Vanguard Lifestrategy Funds. They are low cost and diverse ready made portfolio funds.

Move to the more vibrant area but not to a bigger property.
Pay as much as you can into your pension.

OP, you have told us your options but not what your heart wants.

What would your ideal house look like and where would it be (a cosy little cottage (or airy modern flat) in the vibrant area, something the same size as you have now but somewhere else etc)?

It sounds like you don’t really want something bigger (you say you don’t need it and are worried about overstretching) but then do you really want to downsize?

Being mortgage free is extremely freeing but shouldn’t come at the cost of living somewhere you dislike.

This is the difficulty. Call me strange but to me a house is just somewhere to shelter so I don't have a 'dream house'.

I do have some requirements - detached, off street parking, garden, 3 beds and it would be nice to have a ground floor that is more connected and flows room to room.

I don't dislike where I am today but would prefer to be better connected so nights out need less planning.
I also have a fear of living in the same place for life, like my parents, not that there's anything wrong with it but I have itchy feet!