Has anyone gone for the smaller, more affordable house and not regretted it?

[Housechoice]

As above really! It’s the debate I find myself having with DH. We’ve 2 very young DC (no plans for more) and are weighing up the pro’s and con’s of a reasonable house for say £350,000 with some compromises versus a bigger ‘ideal’ house for say £450,000 which ticks every box. Location wise both would be similar area so no compromises there.

The Mortgage saving would be big by not taking out an extra £100,000, so less financial stress/worry.

I’m looking for any insights on those who found themselves making a similar decision and whether there’s any regrets either way?

At a young age when promotion and wage growth is very likely pushing to as large as you can afford is probably sensible as costs of later moves will be offset and you are probably always going to gain on house value over 10+ years.

At your age with limited wage growth potential if you push too much you will end up living like a pauper to service the debt. Instead put any excess savings in pension for tax benefits.

Some of this is about your personality OP. I live with my partner no kids in a small 2 bed bungalow in London, so detached wrap around garden which is very unusual. I loved it straightaway my partner still feels at times it is too small.
Having this property meant I could pay off the mortgage early and retire early because of my health.
There is no prefect solution or perfect house. I just watched about five seasons of Location, and Kirstie and Phil have always said buy for the potential then do the property up and make it work for you. Despite her reputation for being posh Kirstie always advises buying cheaper and not overstretching yourselves.
I have spent a small fortune on the gardens and the heating system in this house as well as the windows and doors and Im now Heals customer of the year I think, so my house maybe small but it is perfect.

We bought the cheaper house, it's been an ok family home and we were mortgage free at 50 which was a blessing with 3 DC at uni.
However the "dream" house that we also considered (and was only £40k more back in the day), is now worth several times what ours is and has been bought by a footballer.
I regret it every day.

@Housechoice - yes! When DH and i bought a house together, we deliberately bought comfortably within our means rather than stretching. We’re in London. We didn’t have children at that point but hoped for them. We were buying in the early 2000s but we were both old enough to remember when mortgage interest went crazy in the 1980s and wanted to ensure our mortgage was comfortably affordable. We bought a family home (3-bedroom with potential to convert loft which we did) but it is a small terrace rather than the bigger nearby houses. This was 20+ years ago. We bought thinking we could go bigger in due course if so desired but we’re still here and very happy with our choice. We’ve had some financial ups and downs over the years and have been very glad the mortgage was comfortable rather than a huge stretch.

We’ve just been through this and just exchanged on the dream house. We did look at a few cheaper options that are bigger than our current house but not the big family home and decided that for us it was worth the gamble.

The “in between” houses were worth looking at but they were strange in that aspects of them offered an upgrade on our current home (eg. More living space) but always game with significant compromises that were worse than we have already (small master bedroom, no side access, tiny garden). So ultimately we felt that we would end up wanting to move again and it would be a waste of effort and stamp duty. There is also the risk of getting priced out of the forever home if house prices go up.

I won’t pretend it isn’t a risk - life is. But we have reasonable cash savings (enough to cover the mortgage for almost a year) and plans to overpay to get it down before 2031 when we renew. I’m definitely swayed by my parents who did this and it all worked out for them!

It feels scary - £1788 mortgage - but we have actually borrowed £100,000 less than we could have on paper (I would never looking at those repayments!). Plus with interest rates the repayments on an “in between” house would still have been about £1400/month and that £388/month isn’t going to save us if shit hits the fan.

Other people have lower tolerance for risk. I am lucky that I know if we ended up in real financial difficulty that my parents would bail us out for a while and I have a small trust fund (£22kish) that I’ll get at some point when my 93 year old grandad passes away, and options for picking up agency work in my industry if I ended up unemployed.

We went for a cheaper house but was pre children. It enabled us to save a little and comfortably afford the bills and mortgage on one wage which has mean im able to be a sahm.

I'm somewhere in the middle. I bought my ex out of our 4 bed ex council house semi (that should really be a 3 bed), at the time it really stretched me as I was a single parent and needed to raise a 130k mortgage 12yrs ago (which I appreciate isn't huge by standards these days).

Fast forward to now, I'm still paying the mortgage, the house has risen in value and the mortgage repayments are £650 a month with an LTV of 30%.

I've been out of work for the last 6mnths although have a new job starting next month. I'm so grateful that I stayed in my house long term to pay off the mortgage and that the payments are still affordable so that I could make my corporate redundancy pay out go a long way. My parents could help me but I want to ask them as little as possible, if I did have to ask them I feel better for knowing that it is only £650 and not a £1000 plus.

The things that irked me before about the house have fallen by the wayside as I'm just glad to still be here.

Edited to add maybe the compromise is looking at cheaper houses which can be extended so you have options.

Looking back down the barrel of a 40+ year marriage, our only regret is playing it safe and not extended ourselves when we bought our second house. My dad told me to buy the larger house but we wanted to be ‘safe’ and ignored him. It was a real mistake - we had to move too soon again, we stayed one rung down the property ladder and it took us much longer to get to the ‘forever home’ - I’d even go as far as to say we have never got to the home we wanted because we didn’t take that risk earlier on.

Looking at our contemporaries, the ones who took the most risks are the ones who have had the most rewards.

However, we also never had the sleepless nights that some of them had, so …

I’d say financially do it, but if you value security more, play safe.

This is such a good point and was a big factor in our thinking ultimately. DH and I are “home people” so in many ways why shouldn’t we spend more on housing? DH isn’t a bit fan of holidays and when we do go it’s usually only Europe. I also love to host and want to facilitate the big family Christmases as my parents get older and have somewhere my children can visit with their children and no one be too squished for space. It’s just what you want from life really.

We went a little higher than dh was comfortable with and it worked out for us. It did mean that in the first couple of years we watched carefully what we spent so we could make extra repayments so that he was not worrying about it. So I think it is basically a balance between a larger home and wanting higher disposable spending for holidays, going out and activities. If the latter is key for you then go for the smaller house. if high mortgage payments would stress you out then go for the smaller house. But if you are happy to cutback on other expenses, & have reasonable job security then a larger house is probably financially the better bet.

Me!

There are only three of us, SS part time too although I suspect it won’t be many more years til a girlfriend is on the mix (about to turn 15).

Moved to a new estate 5 years ago, could have bought a bigger 4 bed or even a 5 bed, but didn’t want more to clean and wanted to enjoy life and live a bit by being able to travel more, have nice cars, afford to give SS more, etc. so we now have one of the smaller 4 beds on the development and I don’t regret it one little bit.

We bought the small cheap house and stuck with it.

After child number 3 I had a freak out about our house being too small, but we got a loft conversion when she was around 12 months old instead. I am SO glad we did that instead of moving and stretching ourselves. DH and I have both been able to have career changes, and work part time. Mortgage is tiny, just a couple of years from being paid off now, and we are only in our 30s.

I understand the thought behind stretching when young. But on balance prefer my life as it is, with the minimised risk! My family life was turned upside down very early on and financial pressure on top of that would have been unbearable.

The caveat is our house is in a gorgeous location with a big garden.

I think past experiences of this are quite misleading. Even buying a smaller house now in most areas won’t mean being mortgage free by 40.

I went for a very affordable property (albeit in a very nice area). Space isn’t an issue as it’s just me and DD but I’m in a flat. My earnings went up hugely and I could have afforded a house but didn’t make the move. 5 years on my health has taken an unexpected turn and I’ve had to go part time. The relief of being able to take the pay cut and still pay the bills is priceless. The thought of having the pressure to keep earnings high to pay the mortgage is not something I want to be a slave to.

Smaller houses are easier to keep tidy. The extra £s mean you can have less worry and more freedom. It’s not the size of the house that matters but the memories that are created in it. That’s what makes it a home. With the savings you make you’ll also be able to enjoy holidays and days out. I’d go for the smaller one and make it super cosy and home.

Energy bills and council tax be cheaper too.

That’s really poor outdated advice.

The chances of house prices increasing in value over the next 10 years compared to a global tracker fund is almost nil. Then factor in the interest costs that could have been invested on top and you’ll be miles worse off.

I bought smaller than I could. The idea of forking out hundreds of thousands in interest to enrich fat cat bankers has never sat well with me.

No regrets here.

Yes, I was thinking along the same lines. Those of us who've had our houses long term (and so who can truly say whether we regretted it or not) benefitted from a long period of low interest rates which made mortgages more manageable. That's a very different financial scenario to today.

I compromised on bedroom space and have no regrets. We will be mortgage free soon and able to make more choices about work hours or holidays. We are hoping once our children are both in school to be able to save for they future and ours.

Edited for a typo

The problem with a bigger house aside from the mortgage is
bigger heating bills and council tax and carpets etc; more time required to clean, decorate and maintain,
Also it retains clutter and stuff

With a young family there is a lot to be said for not over stretching with anything non essential as it’s stressful enough as it is and stress puts a strain on relationships

However of course there is a happy medium as too small creates it’s own problems.

We live in a cheaper area bigger house than needed and I sometimes purposefully sit and watch tv in the front room on my own to justify having the blooming room! However I only have time to watch traitors so it doesn’t get much use!

We stayed in a smaller house for much longer than originally planned and are in the process of buying a much bigger one (2 bed mid terrace, 1 bathroom, no driveway to a 4/5 bed detached 3 bathroom with driveway and a large garden). Very much looking forward to moving and I don't think we will regret it.
Could have made an intermediate move but would have had a lot less savings behind us if we had so it's been worth it holding off. Also there's about £12k in moving costs to consider in our case (LBTT, solicitors, estate agents etc) which we'd have paid twice if we'd done that.
I'd say if you'll be content to make the slightly smaller home your forever home, then go for it and enjoy being more comfortable/overpay mortgage, but if you think you'd want to move again in the future then go for the stretch and save on those moving costs.

I agree it’s definitely partly your personality / lifestyle that counts. Another aspect I love about a smaller home is no extra space to have guests or host events because I’m an introvert and if I’m honest don’t really like having people to stay 😳

We went for the smaller house and definitely do not regret it! There's a lot to be said for peace of mind financially. Also lower maintenance and heating costs, less repairs.

We went for the smaller house and paid the mortgage quicker and became mortgage free at 48.

I will never regret my decision as being mortgage free at such a young age is so worth it

Went for a smaller house with no mortgage. I would LOVE a bigger house (what I’d really love is a garage and utility room!) but it was the right choice. Our gas and electricity is about £80pm, it all feels manageable.