To buy or not to buy

[Pereie]

My DH and I found our dream home at the weekend we weren't really looking but stumbled upon it.

It is close to where we live now, but is bigger and just beautiful.

The home we are in now is fine, decorated beautifully etc but the rooms are a little on the small side. It is only a two bed, but we can build into the loft which will give us two more bedrooms and another bathroom for about 45k.

Our mortgage atm is aprox £600 a month, very manageable.

The new property is a three bed with more 'room' although the master is a bit bigger than our current house the other two bedrooms are quite small (the same size as our current second bedroom - so barely a double) Our new mortgage would be around the £1600/m mark.

Now, what I am asking is... are we being crazy? Yes its an aspirational house to move to, but the one we have is fine. DH makes good money and I am self employed & planning a wind down with the arrival of DC this summer - so the mortgage would be on his shoulders for a few years.

Is it worth moving? We live in a london borough so I can't see house prices coming down any in the future. (this house was worth 200k less in 2015) so do we just bite the bullet and buy our 'forever home'?

Advice welcome!

How many sq feet/metres would you be gaining and for how much money? That will tell you if the house makes financial sense.

Next, can you actually afford the house? With a baby, you won't be able to earn much or you'll have to spend tons on childcare so that both of you can work. So it really depends on your wider financial circumstances. We've got our first on the way and I've worked out that between loss of earnings and childcare costs, we will be 2-3k worse off a month - I won't be able to put in as many hours (12-14 some days) and on the days that I will work (say 8h), we'll have to pay for childcare. Whilst we'll still be well off, DH had s already feeling the pressure as the proper earning will be on his shoulders only. Have you discussed that with your DH?

So the house we are in just now is 883sq ft vs 1515sq ft. so an extra 632sq ft for 380,000. Having looked at the plans I think they have added the garden office into the total sqft of the house.

We can afford the house. DH can afford the mortgage on his income alone. I obviously will contribute, but realistically won't be able to for a few years with young kids. We have discussed it, and it is affordable to us but I just don't know if we are being crazy as the house we are in is fine. We could afford to pay off the mortgage with our savings in the house we are in now and live mortgage free, but a nice roomy family home sounds really appealing.

I wouldn't do it. If you are in a good area for schools etc and you have good neighbours, I'd stay.

If you’re planning more than one child, then I’d find a 833ft house very tight. 1500sq ft sounds a lot more comfortable for a family but by no means does it sound lavish or anything.

It isn’t just the number of bedrooms but the size of rooms also matters. For example, if you’re a family of 4 and invite another family of 4, would you have enough room for all of you to sit and chat or have space for a table for a meal? Those were the considerations we factored in when moving to a bigger property.

Not to mention all the kiddie stuff like prams, scooters, bikes etc They take up a lot of space.

It also sounds like you’ve been very sensible with money and even the bigger house sounds very affordable.

With the pricing,very very roughly speaking, it sounds like if you’re current house is 500k+ then the new house makes financial sense. If the area is cheaper than that, then it'd be a lot to pay for the extra space (unless there’s a premium for a massive garden, garage, the station or a top school around the corner etc).

We are planning more than one child, and the 'entertaining' space is what is missing from our current house. We don't have to room to invite more than two people round really. Even with doing the loft - that only gives us sleeping quarters and doesn't solve that problem.

Committing to a high mortgage is just a scary prospect when we are in such a comfortable position at the moment. Decisions, decisions.

Do you know how the housing market is atm? London is pretty risk free... right?

Lol Someone has just borrowed my crystal ball so not sure... By the sound of it, you live in a fairly normal area (price wise) that’s relatively affordable to professional families so I wouldn’t expect crazy price drops.

We’re pretty risk averse and DH in particular was really unsure about moving to our current house despite it actually being very affordable (same with you able to pay the mortgage with one income). We haven’t been thinking about prices dropping as we intend to stay here until retirement (23 years or so). Our LTV is low so even with prices dropping a bit in the meantime, we’d still have a lot of equity left and could secure a great remortgage deal.

As you feel the bigger house would be a ‘forever’ one and you can comfortably it, I’d just go for it. Just make sure it’s future-proofed in terms of the property itself as well as school catchments, commutes or anything else that could become a problem in 3 or 5 years’ time (in case you’re really fretting about prices fluctuating and don’t want to get caught out in the middle of a recession).

Thanks for the reassurance @JoJoSM2, really appreciate the time you have taken.

I'll let you know what we decide to do

I'd be more concerned about catchment areas in London really, they are tight and likely to shrink so if this move takes you to the edge of a catchment then by the time secondary comes you might be just outside it, and feel the need to move again. I'd also consider other location factors - even if you're not moving far, moving further away from decent transport/amenities/a different borough can affect daily life quite significantly in London. We live in quite a small flat and are close to being mortgage free, but the location is great and it's good to know we are secure financially whatever happens.

It sounds like you can afford the new house, although it's quite a jump in payments. You need to think about how secure your DH's work is, how you'd cope if he got ill and couldn't work or if he got made redundant. Personally we're quite risk averse, so if we were in your position we'd probably go for the loft extension, and then consider using one of the original bedrooms as an entertaining space, which is how a lot of houses are arranged.

Could you do a downstairs extension on your current house + a loft extension. That would increase your sqft by a lot but wouldn't cost £380,000!

Catchment for schools would be much the same as it is in our current house. We live in a good area for school catchment. Transport links marginally better if we move - but not enough to make a difference either way.

I hear you about the downstairs too, defiantly something to consider but as the garden is small the amount of space we would gain for the cost and upheaval probably wouldn't be worth it.

I think there is a heft premium on the house we are looking at because it is detached and very pretty, looking at compatible properties on the same street the cost per sqm seems too high (thanks JoJoSM2 for the idea ) so there may be good room for negotiations.

Its just hard to judge because we both feel this is not our forever home, but could live here for at least 5-10 years but wouldn't want to be here longer term. House prices just seem to be going up and if we wait the five years we could be paying an extra 300k for the same property and although our house price would also increase, it wouldn't be at the same rate as a more desirable house.

Geez, so much to think about.

Any options for a middle ground? Perhaps a house that is naturally larger-proportioned but needs a refurb or extension? Your mortgage would only go up by a bit (say to 1k) but as you've got savings, you could get the work done. Upheaval and massive stress it would be for a few months but even if you factor in renting a local flat to live in during the work, you could still save a 6-figure sum by getting the work done rather than paying a premium for a done up place. That could also alleviate the worry about prices in the future - even if they dropped, it would only making smaller profit rather than losing money. And actually, maybe you would even be oblivious to house prices if you lived in a 'forever' place.

And don't pay for gorgeous presentation - it's all too easy to 'fall in love' with a perfectly-styled property seemingly offering an aspirational lifestyle but you can genuinely do it all yourself as long as the location and the bare bones are right.

Maybe go back and do another viewing then see how you feel about it. As you discovered this by chance, I'm guessing you're not in a position to proceed. Before getting too excited, have a chat to the estate agent and your financial advisor to see how long it might take you to get your current house sold and what mortgage deal you could expect

Is this your first child? I would recommend working out if you can afford it on one salary incase you decide you would prefer to take a career gap.

Do you know how the housing market is atm? London is pretty risk free... right?

If you look at the Nationwide house price index, London property fell slightly year-on-year in 2017. Of course no-one can say if that's just a short term blip or the beginning of something bigger, but there is a general consensus that London property prices are currently very high relative to incomes.

@Roseandmabelshouse - yes, it is our first child and DH can comfortably cover the household expenses until I am back to working ft in a few years. Plus we have a healthy amount of savings should we need it to fall back on.

@4yearsnosleep - we have arranged another viewing for this evening. We have spoke about moving for a while but where not actively looking. Our house was valued at the end of last year, and houses on or street sell quick (the house two doors down sold in under two weeks recently) Yeah we need to speak to a financial adviser and see what the mortgage details would be etc. And I'm not sure how long all that takes so we might miss out on the house we like.

But I guess the theory of the thread is still the same. To massively increase mortgage payments for a more attractive roomy house or to stay put in one that is fine and live without huge financial commitment.

I think being comfortable with children is a nice luxury, so is having your 'forever home'. Sounds like you could have both...

It is a risk, but if this is your 'forever' family home, I personally think it is a risk worth taking. You're obviously financially savvy if you have significant savings, so I'm sure your calculations will have taken everything into account.

We paid over the odds for a house we fell in love with 22 years ago, and our children had the benefit of growing up in our 'forever' home.

When we come to sell, the overpayment will be forgotten compared to the increase in value over those years.

Go for it. You'll get your dream house and if for whatever reason you don't love it, you can sell up. The London market is not likely to change any time soon.

Life is too short to not just go for it.

Although London prices are going down overall, some areas are going up (e.g. Haringey) whilst others are going down (e.g. Islington). Obviously nobody can say what will happen long term, but check what prices are doing in your area and the area you're buying in.

We're doing similar - not quite such a mortgage hike but going back to a 20 year mortgage when we could stay here and have paid it off in 10. And like you, we could stay here, it's fine, but the downstairs space is tight and am getting very aware of how much that will grate as the DC get older. Big teens are a different prospect to little uns, esp with the open plan that means we can't escape each other or the sound of the tv, washing machine etc. So we're planning to (just putting offer in) move a few streets away to a newer build detached. Needs work, but worth it for the long-term prospects. Don't know if it's a forever home like yours as I'll prob get itchy feet eventually, but for now it really makes sense for the space, and it sounds like your move does too. Would be different if it was a real stretch for your finances, but sounds like now's the time to do it.

Btw - we've done the loft here to make it a four-bed and it still doesn't solve the space issue. It's downstairs where the space really counts. Even for silly things like wanting a decent Xmas tree! We've thought of putting a conservatory on the back or an extension but there comes a point where the house is really at its limit and makes more sense to move than over-extend.