Would we be silly to downsize in our 30s?

[EvelynSalt]

I need advice please. I’m married and we have one child. Between us we earn a comfortable living and, before getting married and having our child we owned a small home each. We sold them both and decided to then stretch ourselves and buy a large house together, which has a mortgage of c. 350k (we were able to put down around £300k deposit with our respective savings and sale money).

Between mortgage and nursery fees we’re paying about £3k per month. It’s affordable but with bills we don’t have much left for savings, holidays etc.

I’m now wondering if this house and mortgage is going be an albatross for years and if we would be happier / sensible to buy a smaller house which, if we capped it at about £400k we could be mortgage free in a few years. But if we ever wanted to move back up the property ladder to somewhere bigger or more expensive, presumably this would be much more difficult if we buy a cheaper house now? We’re obviously only going to get older and have less time to stretch a mortgage.

I hope this makes sense. What are your opinions? Downsize or just stay put?

What’s your monthly income after tax?

The nursery fees will make things painful now, but won’t last forever.

Why would you need to move back up the property ladder, if you’re happy with downsizing. We downsized in our forties when the kids were teenagers. We moved from a large four bed victorian semi to a lovely detached bungalow. We’re mortgage free now and semi retired. We go on holiday half a dozen times a year. Life is good. We still have one adult child living at home but we like him being around so not pushing for him to move out. I would honestly say do it. Your quality of life matters now, not when you’re 70. You’re not going to lie on your death bed remembering your big house, you’re going to want to reminisce about all the lovely holidays and quality time that you were able to have, because you made that extra money available. Good luck with your decision.

Between us around £6k. You’d think we’d have plenty spare but I’ve set up several budget planners and it just seems that our bills and general costs are high. Maybe I’m just terrible at managing money?!

We don’t tend to use credit cards, so all purchases even larger ones are from current account or savings. I know that’s probably a starting point.

This is my line of thinking, we might not even make it to retirement!

Good point, I suppose it would be if we downsized and then regretted it, and wanted to get more space again. Or for example buy a lovely rural property, which would be small but £££

Nooooo, switching your spending to credit cards won't change the amount you are spending Vs earning.

I think you need to go through your spending with a fine tooth comb, start tracking every penny you spend. Critique your spending.

Once you are in control of your spending, you will be in a better position to understand whether you need to reduce your outgoings and if reducing your mortgage is the best option.

I’m all for not overstretching on a mortgage. Life’s too short to be waiting to live it when the mortgage is paid off, and it sounds like you have scope to downsize to a comfortably sized home rather than somewhere so small and cramped it might reduce your quality of life. I take it you’re not planning for any more kids? If your family is complete I’d say go for it. Less space to have to clean and maintain as well!

I’d do it OP. I’ll be downsizing soon in my 50s. I resent my mortgage tbh. I’m not hard up, but my mortgage feels like an added pressure to keep working full time in a stressful job.

Will you potentially have another child? If not, nursery fees will be over in a few years at most. Once child is in school, would your mortgage and associated outgoings for your current home feel manageable?

Moving itself is expensive - I agree it wouldn't make sense to move to a cheaper home now if you would need to move to a more expensive property in the future to access good schools/amenities to suit older child/bedroom big enough for teenager etc.

We definitely compromised on space, ie we no longer have a large dining kitchen, but all in all we’ve never regretted it at all. We’re too busy enjoying more financial freedom. You’ll make the right decision.

Do you prefer living in a larger / nicer house or going on more holidays, etc.? I would probably choose the former but the latter is also very reasonable, and it just depends on your priorities.

Moving is expensive in terms of time and money, so I wouldn’t downsize if you think you’d want to upsize again pretty soon.

You have one child who is still in nursery - are you completely sure you won’t want to have any more? I’m not sure how much space you have now or what you have in mind to downsize to but I’d recommend thinking carefully about whether you might want more space down the line, either for more children or for more space for a teen to hang out.

Once you don’t have nursery fees would the current house feel affordable?

Would you actually save much by downsizing given the stamp duty and moving costs?

You have 30ish years until retirement, that’s a long time. You don’t have to stay in the same house until then as your needs change over time but it is ample time to pay off the mortgage if you want to stay put.

I'd get through nursery and into primary before deciding. Are you in the right place for catchments for primary/secondary?

We have done the opposite, stretched ourselves for our home to raise our family in. We figure it's a better investment for us since the gains will be tax-free, (compared to other investments - DH isn't eligible for ISAs) and we expect to downsize once the dcs (2 dds) leave home and hope that gives us enough for a house deposit for the dcs. We're in London and if they wanted to live here as adults it's unlikely they'd be able to raise deposits without our help.

For us it's also nice to have the space while the dcs are young - their toys take up a crazy amount of space, and there's space for them to practice dance and gymnastics.

How large is large ? How many bedrooms

nice to have 3. Yours . Child. Spare

are you one and done with dc

yes nursery costs are high but once at school lower tho obv have holiday care and befjre /after school to cover /pay for depending on work hours

Your childcare costs will go down, will your salaries go up? Can you expect promotion etc?

Buying and selling is such an expensive process in itself.

We never upsized mainly because the only house we wanted had an awful survey.

But it’s one of the reasons we have retired in our mid fifties plus had loads of great holidays.

I always say I have one backside that can sit in one chair and one pair of feet that can wear one set of shoes. As long as a house is something you are comfortable in and not overcrowded or unhealthy to live in what does it matter, its whose inside that house that counts.

I'd do it. I think this idea that we should invest as much as we possibly can in housing in order to reap huge profits later is... risky. Far better to have less stress and more security during the family years.

Thank you everyone, this has been really helpful. Looking at what we could buy and pay our mortgage off sooner, it’s something we are strongly considering. Contacted an estate agent for a valuation and will see how we go from there