WWYD- GET OFF HOUSING LADDER AND RENT OR SIT IT OUT

[cheekymonk]

I have posted a bit about this before in terms of relocation offers. We live in a 2 up, 2 down house with me, my dh and ds aged 7 and dd aged 18mths. DS refuses to share rooms with dd and in all practicality, it is a bad idea. DS likes to chill out and read, do colouring when he goes to bed (we allow for this by putting him to bed a bit earlier) whereas DD needs quiet, calm and dark room. DS would wake her up each night and I feel he needs his space. So, we tried to sleep in same roon as DD but we became scared to move in fear of waking her up. This was a while back and now she is a bit older, we have moved our bed from the dining room?! back to our bedroom as it was resticting our living space so badly. My logic is she may need toddler bed soon and i want to keep an eye on her safety wise if she is in own bed. BUT, I got a crap nights sleep last night, 1st night being back in our room, again scared to breathe.
we have a crappy NRAM together mortgage which is 103K actual mortgage and 33k unsecured loan. Mortgage payments are £775. We also have an IVA due to finish next Sept.
NRAm had agreed to port or transfer our mortgage and we have an agreement in principle and we have been busy planning moving to wirral where dh can relocate with his job.
Now however we saw a financial adviser on friday and he was very doom and gloom! Saying we have no hope of current fresh mortgage due to IVA. Even if we wait 3 years for IVA to finish and credit history to rebuild we still may not be able to move due to financial status.
I said we were so desperate we would sell house and rent but he talked about how so many people are stuck renting and can't get on ladder, if we sell we lose our asset and deposit for next house. Realistically, we will never build up a 10% deposit plus.
I said we had considered renting this house to rent elsewhere but not sure if nram will give us buy to let mortgage and we know rental income is £650 approx so would not cover mortgage. Plus,we would need to get house up to renting out standard but have been doing general repair/tidying up.
Also, if we sell, we will have debt leftover from unsecured loan. This could be £300 per month which we definitely can't afford with £700 rent for our new home.
I am going crazy tring to think of solutions as it seems we have none! Can't afford loft conversions, extensions, etc.
Question is, do we just stick it out and accept we can't move for another 2-3 years, do we just sell or should we try double renting? are there any other options? DH and i both work. income is roughly £40K.

I work p/t at jobcentre 916 hrs) have thought of increasing hours but childcare costs make it unfeasible so have applied for weekend job at Asda! Will make life a bit more comfortable if successful.

Don't sell and rent
We only rented because we couldn't find anything
We are now stuck and hate it here
We are looking at another 3-5 years before we've even it a chance of getting out of this hole

Adapt where you can

You could even get your ds one of those beds that are raised with space underneath to maximise his floor space iyswim.

Don't let your Mum make you feel bad, there is lots you can do that can make your current space workable.

Sorry to hear that bronze, its horrible when you are unhappy where you live. That is the thing for us too, my dh and I are very much ready to change areas but we are in the catchment of outstanding infant, junior and secondary schools, our doctors are very good, we have never been burgled (touch wood) and there are no drug or violence probs in the road. The kids are quite tough and ds frequently falls out with them but I suspect that is normal! When we looked around Wirral and saw what we could afford i was a bit scared and thought that perhaps, the grass isn't always greener and that i would rather wait than live in a horrible area.
DS did have a cabin bed but he loves his bunk now! With my Mum she is partley letting me know i deserve better but it also makes dh and i feel inadequate for not providing somehow. DS often says he would like a bigger house. When kids are older I hope to work full-time or possibly change career as i do think I could earn more (sounds complacent don't mean it too). There have been lots of suggestions so thanks again.
Thanks Bronze too, by suggesting improvements everyone clearly agrees with you!

I think staying and paying down the mortgage/loan is the sensible option. Splitting the room is very do'able and you can get soundproofing boards so that will help. We partitioned a room to make an additional room and it's worked out really well. Mostly people believe it was always like that!

As the Dc's get older you will have less childcare costs so hopefully more disposable income to over pay the mortgage.

We sold up and rented for a while - it didn't work out for us and the time renting was just 'lost' money. We are still in catch-up mood. Do look at garden options for storage - it's something we are considering.

Thanks startlife and everyone for your input. We are back downstairs now!