You have had some fabulous responses here OP, I just wanted to throw my tuppence in.
We lived in the 'dream house'. It was a fixer upper, a good 45 minute car journey to work, to family, anything interesting really. It was on the coast and I could see the sea from my bedroom window (if I angled myself right!).
I had baby number 2 and became so overwhelmed with raising a small family, working miles away, only having one car between us, the bus route to work was nearly a 2 hour trip. The constant upkeep on the house and fixing things. The basement leaking, the anchient boiler packing in, the SHEER COST of heating the place in winter, 6 years ago, was £450 a month.
It was driving me up the wall.
We too bought a 4 bed detached new build with a garage and double drive. I couldn't face moving into a house that needed ANYTHING doing. I just wanted my home to be a home and not a project.
It's been a good move. We picked a good plot that overlooks the front of the development so lots of light coming in.
Boiler issues, pipes, sewers etc any of it isn't our problem, all under warranty. We only had 2 issues and someone came and fixed it for free.
It's in walking distance to a school. Lovey area. Neighbours seem nice, of course you lose the 'privacy' aspect and mature gardens at the back, but to be honest it's been lovely to see everyone planting trees and bushes and watching them grow, it won't look like it does now forever, plus I planted my own!
If I could be mortgage free whilst the kids were young I would take that. Would probably even take a flat or something because the amount of stuff you can do, experiences you can give them far outweighs the cottage.
Good luck 