People could cut housing costs to retire early

[ThoughtsQuestions]

The statement is "people could cut housing costs to retire early" but I'm not sure how much I believe myself and trying to figure out my priorities.

Here's my situation for context;

I paid off mortgage on a very small home in my late 30s. It's a safe area, close to shops and a park. It's cheap because it's small and not a fancy building. My living costs are quite modest because I don't need to pay for housing. But in some ways, I'd love to live in less cramped conditions

Our annual family income (pre-tax) is over 50% of the value of the house. People on a similar income live in much bigger places, with a big mortgage.

I changed sectors and pay went up more than expected. The big pay feels temporary, ie if I stop working, I doubt I'd be in the position again. But I don't get enough time with my young kids

I'm weighing up my priorities at the moment.
Pros : financially free, could retire early if trajectory is same for a few years.
Cons : work's very stressful for the high pay AND we have a v small space to bring up kids. But really the kids don't notice, yet!

Lots of questions.....
Is a home that's much cheaper than you can afford worth the freedom it enables?
Curious what others would do, I notice the mismatch in finances + stress + free time vs the quality of our living accommodation compared to the norm?
Have you been in this situation and gone through this phase? What did you think in retrospect?
Why are so many older people living in such valuable homes and not making this trade off? I always assumed that if your house went up by so much money (those in detached homes in SE worth close to or way over £1m), people might cash out more. Especially as children moved out.

I'd rather have a nice house - im not saying mortgaged up to the eyeballs - but even if you took out a mortgage for £150,000 over 20 years - you'd still only be 50 by the time its paid off and repayments would be incredibly cheap.

I dont see the point of retiring super early but not having a place you're happy with to spend that retirement in?

OK, maybe this is a regional question. Small house + £150k won't get you much around where I live. Probably be around an extra £400k.

The comment about houses in the north is a good point.

It's nicer and less stressful living in a decent size house. And I suppose it's better to live for the moment rather than waiting for a retirement that might never come! There are no guarantees in this life.

Hmm, I'm not sure I agree. Especially when you get older and it all still needs maintaining and cleaning. Houses in the UK tend to be badly designed though, so you need more rooms to make up for crap layouts.

It’s a trade off. But I’d opt for a reasonably happy life, with a decent amount of space, while the dc are growing up. You can sell later. Retiring early costs a huge amount.

If you need more space is there scope for conversion of your attic or an extension?

The Scheme is/was called 'Architect in the House'

My house isnt that different to the one linked to in the thread. We have a rooflight/lantern in the extension so the dining room which is sandwiched between the front room & extension has no natural light but isnt too dark