Wwyd buy expensive house to grow into or house size needed now

[birchygoo]

So we have recently moved back to our home area to be near family with our first child and are looking at buying a home.

One house is 5 bedrooms (1 very small currently used as a laundry room) 3 reception, 3 bathroom, detached on a small but decent land size. Has a river out back but has never known to flood and would have to rise a large height to flood house. Cost 225,000. Needs some decorating to my taste but liveable in. Along a country road. Over 30 years mortgage would be around £650

Other house is a new build 3 bed semi detached. 1 reception and 3 bathroom. Small enclosed garden. 130. Turnkey so can be decorated to my taste, and solar panels for hot water etc. Development of 20 houses. In countryside beside my parents and family. Over 15 years mortgage would be £460.

We are torn should we buy our forever home now (ie house 1) but not have lots of disposable income. Or should we buy house 2 and have spare cash to do as we want. However we may quickly outgrow house 2 so would be looking at moving again in next few years. Alternatively we may never grow into house 1 if we are not lucky enough to have anymore children.

Thinking is if we buy house 2 we don't sell it but when we need to move on we can rent it out. We would hope to save enough money with the lower rent to put down another deposit.

We have just sold a house we were paying 860 mortgage on so would hope to pretend we are still paying that but save the extra.

If you have got this far, make yourself a well deserved brew!!! Any questions to help make your decision ask away. My question is wwyd! We are finding it so difficult to decide.

Oh and another factor is that if Brexit (not looking to discuss it rather than it's a bit of an unknown) does happen to push up interest rates, we would still be able to comfortably afford house 2 but may struggle with house 1 if they were to rise significantly

There's a larger new development at Hillcrest Village, same developer, prices a bit more but they have 4 bed detached houses.

Big house but put in a lower offer.

Thanks Lizzie but that is turning into a massive housing development which turns me of and it's not countryside which I'm looking.

I would rather compromise on size to be in countryside

Without a doubt, now you've posted the links and added more information, there is no competition.
If you can afford the big one, you will be very frustrated in the little one within a few months, let alone years. I'd pay a BIG premium for detached, too - it's not just about thee possibility of noisy neighbours - all you living space joins theirs - you'll hear their TV and conversations, they don't need to be having parties, or doing DIY. Then you find yourselves restricting what you want to do, or what your dc can do, so as not to disturb them.
Yes, I kow the vast majority of people live in semi's, but given the choice I would go for detached every time.
Then when you add in the fact you need a study and would like space for people to come and stay - it's a no brainer.
You really only have one living room and your kitchen according to the plan - that gets frustrating after a while.
As someone else suggests, I would continue to pay what you've been used to anyway, and start overpaying a 30 yr mortgages, from the beginning (or fix over a shorter term).

What is the like-for-like cost?

If both houses mortgages were over 20 or 25 years, what is the cost?

I would not commit to a 30 year mortgage, personally. If you can afford to have a shorter mortgage, with higher monthly payments (as you have been paying more rent quite recently) then I would buy the larger house.

The cautiously sensible decision is the new build near your parents, and then taking your time to look for the next step up.

But if you have moved a long way to come "home", I would want to make it count. And for me, that would not be the smaller rooms-adjoining semi. It would be the larger house with potential and a lovely not overlooked garden... If I'd been already a bit frustrated with space in my previous house, I would without a doubt stretch for the larger house.

Only you know if the extra living costs and mortgage will eat into your disposable income to an unacceptable extent, or if you are just naturally rather cautious.

10 mins away is neither here nor there in terms of distance with your parents - if you'd have moved away eventually to another house by the time when your DC was old enough to walk independently. That would be the only reason to stay within walking distance not 10 min drive, imo.

And moving costs are horrendous. If you want a rental property in the future you can still make that happen - it doesn't need to have been your home first.

I was going to say I would buy the smaller house for now, given that you think you can save for another deposit for the bigger house later....

BUT

are you sure you can save for the bigger house? If you save £400 a month, it will take you 10 years to save a 20% deposit for the bigger house. There will (probably) be an increase in value on the smaller house, but that may only cover the moving costs and stamp duty, so I would plan to need to save for 10 years before you can afford the bigger house if you're living in the smaller one. You will also have paid off some of the mortgage on the smaller house during that time, so there might be a bit of leeway somewhere in those figures.

If you think the bigger house is somewhere you'd like to live long term then I would go for that option now. It seems like a lot of hard work to save to pay another load of stamp duty to move again if you don't have to.

How old will you be in 30 years?

I love the big house but I would also love the idea of being mortgage free at the point when any dc were looking to leave home or go to uni.

Well neither suit your needs. Would a self build be an option?

I wouldn't get a house by the river with little ones either. I'd lay awake at night worrying.

Can you buy a detached new build instead of the semi detached on the same estate.
We bought new and I regret it.
The house didn't hold its value compared with an older house.

I would normally go with the more prudent mortgage approach but they are quite apples and mango houses....
I wouldn't buy that newbuild - Its not a great design as looks like the living areas are next to each other and the walls will be paper thin probably!
The other house is great, its not enormous but lovely and spacious...If its where you plan to 'live' and your dc grow up then between those two its a no brainer to me house 1 is the winner...
I wouldnt worry about selling it excessively if you are going to be there in 15-20 years...maybe overpay the mortage whilst you can

I grew up with a river in the garden, as did my 2 siblings. Visiting DC were more at risk of falling into the pond than being in danger by the river, tbh. When the DC are small enough to need supervision, you're supervising them. And when they are big enough to let go a bit, they are sensible enough not to get into trouble and you've drilled into them the limits and behaviour you need by the river. Spent many a childhood hour in or near the water.

Of course, I am assuming it's not a major river like the Thames!

We bought our house when it was just the two of us before we got married. Large 4 bed detached property that we scrimped and saved to buy (at £195k). We've been here over 15 years now and had 3 children. It's probably worth over £600k now. So we took a chance and stretched ourselves but it has worked well for us. I'd say go wth what you're comfortable with. Decide if you want more disposable income because it's not fun having no spare cash each month even in a big house!

So we looked at both houses again today and ruled out the new build. Couldn't swing a cat in it and wouldn't fit half of our furniture.

We are still undecided on other house. I also grew up next to a river. It's a small river. We used to play near by but knew of its dangers. By the time the kids are big enough to escape the garden and make their way down the slope to river I would hope they would have the knowledge to be safe at that point. Plus they would never be there without one of us nearby. It would be worse if they were going of over fields to a river where no adult was nearby. I do understand the concerns though as I have thought about it.

It's a hard decision to make - I think we are going to sit on it for a while longer

Thank you for all your help! We have really appreciated it. I totally agreed with everyone of you,even though you had all different opinions, which was making the decision difficult.

We have our bigger house. We have a 30 year mortgage but overpay every month and will up thr overpayments next year when the littlest goes to school and childcare costs go down. We don't do expensive holidays and we live fairly frugally but it is worth it for the space and lifestyle that it gives us and the children. However you need to work out the costs of maintaining and running a larger house - it is significantly more having moved from a 3 bed. It also takes a lot to keep clean and relatively tidy especially with small children.

If you can afford to buy and run the big house, and the location suits you, go for it.

A good fence and a door lock above their reach will sort the river aspect. People live on busy roads all the time and manage to keep their kids under supervision.

Glad you've ruled out the new-build. Given you'd already said you'd be looking to move in a few years' time, it would be senseless to pay £130k for something that loses 10-15% of its value the day you move in. You could also have a problem selling it if there are a lot of new builds in the area as other posts imply. Lots of competition with identical small second homes tends to whittle down the prices as sellers chip £5k off here, £5k off there to make theirs more attractive.

The mortgage rate you're quoting - that looks like it's the example one from the website? I haven't bothered looking, but what's that based on and is it realistic for you? If you've already sold a house, what's your deposit? If higher than their premise, your monthly payment would be lower. Also have you shopped around? They're quoting average. Again, as a second-time homebuyer you might get a better deal with a history of mortgage repayments behind you. OTOH if you're on mat leave at the moment you may not be able to get a mortgage at that rate and might find the repayments are higher. I think you need to do more research on your own situation and find out what mortgage you could get in principle, and what you feel comfortable paying every month, then work backwards from there. If the mortgage you can get at a level you can afford with the deposit you're putting down means you have a budget of £200k then you offer below that and go up to it if necessary, but not above.

A house is only worth what someone is prepared to pay for it and quite clearly if the house has been on the market at that price for over a year, nobody is willing to pay that, ergo it's not worth it.

FWIW, another way of looking at those two houses is the new build is £122 per sq ft of semi; the older one is £78 per sq ft - I know you've dismissed the new build but worth bearing in mind the £/sq ft when viewing properties.

What's the deal with stamp duty in NI? Same as England or different rates? It's another thing to think about with any purchase and you don't really want to be paying stamp duty twice in a short period.

Good luck!

We had the same dilemma and went for the family home in the end after looking at many 'stop gap' houses first. Many reasons mainly that the stamp duty on both houses were going to be high, so the money saved from lower mortgage over the years would be eaten up in the new stamp duty amount and the solicitor/estate agent fees. Secondly, house prices in the area are ridiculous and it's lucky we went for the 'expensive house' as the percentage rise would mean we would have been priced out from a 'family' home now. And buying and selling and more moving is such a pain!!