What would you do? Everyone I talk to comes up with suggestions, but they've all been scuppered.
We bought our first flat (a small one-bed) in 2007. Since then we've had a baby (nearly 2 now) and need to look at moving because she will need her own bedroom at some point. She's still in a cot (she's quite petite) but when she outgrows it we don't have room for a bed in our bedroom. A sofa-bed in our living room is NOT a good option as we have a small kitchen / living room (this has already been suggested!).
We bought our flat with a 95% mortgage and therefore small deposit. If we sell we'll be lucky to get our original deposit back (judging by the sales of similar properties in our area), so in order to move we need to raise another deposit, only this time at least 10% because there are no 95% mortgages.
Also, when we move we need to completely remortgage because our lender (Bank of Ireland) has lost its licence to lend and has told us that they can't lend us any more money. This means we will be going up to much higher rates (already had this confirmed by our mortgage advisor) which means much bigger mortgage repayments :-(
People have suggested we rent our place out and rent ourselves a bigger place - we can't do this as we're not allowed to rent it out (mortgage advisor says we don't have the equity to switch to a buy-to-let mortgage). And besides, the cost of renting a two-bed place is more expensive than our current mortgage (which is low because we're now on the bank's SRV).
We have been saving hard and should be able to scrape together a deposit for a 2 bed flat (since they've fallen in value now, and cost the same as what we bought our one-bed for) with our savings, hopefully a few thousand from the sale, and parents have offered to make up the shortfall. But it'll be tight, and our payments every month will be huge, so a two-bed is all we can manage.
Someone I work with said that we should be really thinking of getting a 3 bed, because if we're wanting to have another baby down the line (we would - but this will have to wait as we can't afford 2 nursery fees!) then we'll just have to move again, and if house prices rise in this time we'll be priced out. When I said we can't afford a 3 bed, she said we'll just have to consider moving somewhere else, which means a commuter town nearby or a not-very-nice part of town.
The only way we could afford a 3 bed house or flat (which will still be very tight money wise, remember) is if we move out of the city to a town a few miles down the coast. I really don't want to move there because a) there is nothing to do there and I'll feel really isolated because b) it's far away from friends and family and c) we don't have a car, and can't afford a car (I don't even drive) which will mean a long commute on the bus for my husband, although not quite so bad for me and DD going to nursery. It will not be cheaper for us to move far out - we'll just have more space for our money.
I would rather sacrifice size for good location - we absolutely love where we are because it is close to work for both of us, family is near by, we have swim centre, soft play, shops, library etc all close by and there is a good school close by. We are also happy to get the bus everywhere or walk which we can do, as the buses are excellent where we are.
So, what am I asking??
Firstly, I guess, am I missing any tricks on the mortgage front?
Secondly - am I being a snob or pessimistic on the location thing? Are we being shortsighted by not looking to get a 3 bed that will do us forever, instead of a good two-bed (with a garden) which we can afford now (ish) and will still do us for a good few years? After all, who's to say that when the time comes we'll be able to have another?
Oh, the (very) occasional ex-council 3 bed flat comes up in our area which would be great if we could swoop in and get. Should that be our preferred option?