To stretch with a bit mortgage or be happy with a modest home?

[Clementiness]

London based; DH and I are in our 40s, first time buyers and have DC. We have the option of buying a nice (albeit small-ish) house in the home counties at the very max of our budget (which will be a stretch due to current rates but doable) or a cheaper flat nearer London, where we live now. We see the house as a place where we'd stay much longer whereas I fear the flat will be a cheaper option but somewhere we wouldn't want for the next 20 years, iyswim.
I don't know whether at our age we should just be more careful with our money and just accept life doesn't sometimes work out the way we want and go for the cheaper flat.

AIBU thinking I'd prefer stretching for the house?

Agree and childcare costs were nowhere near what they are now.

What are the service charges like in a flat? Mine have just gone up horrible. This might offset the commuting savings.

If you can cope with being out of London I'd definitely go for the house

Why do you think London isn't a good place to bring up kids?

Oooh look at you. How wonderful you'll never have to lower yourself to 'urgh living in a flat'

check your privilege & your manners.

@Pinkpinkpink15 some people feel so strongly about house vs flat, I don’t really get it. I think there are pros and cons with both

@Clementiness

how does the price of a 3 bed house compare. It might be worth the extra for the longevity. I'd stress test up to 7% & and a 10% uplift on other big expenses fuel/ CT etc

then pray!!

Agree with many others that mortgage amount on your take home pay is a lot. We take home slightly more than you a month and have just moved with a mortgage of £1.5K and I thought that was a lot. We don’t pay for childcare either. Both early 40s.

HOWEVER, I would go for a house rather than the flat. Could you look further out?

Stretch yourself to get the biggest mortgage you can afford.
100%

I recommend not thinking this purchase as a home for the next 20 years. It might not be -- statistically speaking people move every 7 years because of jobs and other life-change reasons. If you buy your dream "forever" house you'll be happy about it for the first few years, then you'll might resent it because it takes such a toll on your finances, freedom and stress levels. What matters is affordability and whether it suits your lifestyle now, not in some distant/possible future.

We went against the grain and bought a modest home for half the price my friends bought their houses for, and we're the only ones 3-5 years away from being mortgage free, by our mid-forties. Everyone I know will have a mortgage stretching ahead until their retirement, even beyond (this includes my parents and thus I never wanted to be in the same money trap as them).

We can now focus on travel, cut down work hours, and enjoy our son's childhood without financial stress. The best decision/find ever.

@Spicastar sounds ideal. Issue is that in our case, even though flat is cheaper, it wouldn’t be so significantly cheaper that we can be mortgage free 10+ years before the house :(

@BumWad not sure where you live or how much equity you had but in London and surroundings, if you are a first time buyer with a modest deposit, these are the numbers with current interest rates

🙄
I worked very hard "to get my privileges" thanks 🤣

We went for a flat and I still question whether it was a good idea. 2-bed in zone 2 and one year into a 5-year fix. There's plenty of space for us now but we'd like two children!

@snoozylulu if you don’t have DC yet you have plenty of time to move. 2 bed flat is perfectly fine with 1 DC so by the time you get to n2 you might be ready to move (or just stay if you have enough space!)

I’d absolutely go for the house. Flats are really falling in value at the moment and you don’t actually own it, only permission to live there for however long the lease is. Faff with freeholders to extend lease, make changes to your home, service charges etc. Also think of the cost of stamp duty if you end up moving in a few years because the flat is only short term-ish. We bought a flat for our first home and sold it after 3 years, cost us a fortune and could have stretched ourselves to get a house at the time.

@Clementiness you are quite right, but I think in terms of numbers it may have been a mistake. £550k flat and worried we won't be able to resell for that, plus shelling out for stamp duty, costs of moving etc.

On a monthly basis I think your numbers are high but manageable, but I would be inclined to see if there's any way you can get an extra bedroom out of that in a slightly different area because 2-beds in the long term is a squeeze whether it's house or flat

Flat would be share of freehold for 900+ years

@snoozylulu yes I get that. However we don’t know what might happen in a few years, the market might be different. I suppose the positive thing about getting a flat now is that you can get a very nice one for a good price because prices are falling

I would go for the house because the money spent on service charges and ground rent would be better used paying towards a mortgage.

It’s a conversion flat with no maintenance fee and ground rent is only £10, forgot to say

You clearly want the flat despite most posters saying get the house, so seems you've made your decision

I vote for the house. Houses in good locations in home counties is a good investment even now as they become scarce, and getting a mortgage after 45+ if you decide later may become out of your reach. I’d consider it an investment for future - house now, you can downsize once retired, rather than chase the dream.

@Densol57 I don’t, I was just replying to those asking