Size over location? (thinking ahead for when we can afford to buy in the SE)

[Marghe87]

My husband and I only just started TTC (nothing is happening yet...) and are currently renting a lovely 2 bedroom flat just outside London in an area we both love so much.
We are nowhere near being ready for a deposit yet and if DC does come along, it will take us a few more years before we are able to put aside some more, which would correspond to our DC already being at school.

Now, I totally appreciate this is thinking WELL ahead but I cannot help starting to plan our future in my head now that I know there might be a child with us (hopefully) soon. We are so happy here and the idea of moving our child at school age or worse, in the middle of school year, scares me quite a lot, but the only properties we might be able to afford here in a few years are 2 bed conversion flats.

I reckon the same money would get us a bigger house somewhere else but right now I am thinking I would compromise on size in order to stay in a better location.

Has anyone been in a similar situation? What did you do?

OP I get you are thinking ahead but I really wouldn't worry too much just try and enjoy etc and save up. Young children are very resilient. We probably did a bit of both - we bought a relatively bad property on the edge (rather than centre) of a good area. It meant we could buy a slightly bigger property with room to expand. We get the nice amenity but not the full prime location cost. Since we bought our area has improved a little but is still not as valued as prime area.

@RicStar I wish I could just stop overthinking and enjoy the moment. These are really issues I'll be facing in 6-7 years maybe so I should take it easy, but having a "plan" does in a way make me feel better.

I'd get on the property ladder before you have a baby. There are many nice family areas in and around London that don't cost the earth.

I don't see the point of clinging onto somewhere that you might never afford (who knows how much those 2 bed flats will cost in 6-7 years?). If you buy soon, then you'll have smaller monthly outgoings + you will have paid down a good chunk of your mortgage over a few years. Also, not sure if you've looked at childcare costs but many young parents are skint and it might be difficult to save up. As mortgage is cheaper than rent, you'd be in a much more comfortable position with a baby or toddler.

I can imagine it would be even harder to get onto the property ladder once a baby arrives. A lot of people change their plans about going back to work full time and mortgage companies also take into account the monthly outgoings on nursery fees when they are deciding how much you can afford to borrow. I was really surprised by the depth of questions when remortgaging this time and the £700 a month for 3 days of nursery a week took a big dent out of what they were willing to lend us. In your shoes I'd be saving every penny and renting in a less desirable area and maybe even buy a smaller place in a worse location sooner rather than hold out.

I understand your anxieties OP.
I do agree with others that it would be ideal to buy now before a baby, but it sounds like the deposit isn't there yet?
Do you have any other options , eg. Could you buy in a cheaper area, or have you looked at shared ownership?
It is a good time to buy in the outskirts of London at the moment. Prices could stagnate or drop further, of course...

I would look for areas with good secondary schools that your child can realistically get into - don't bank on a grammar school. It is amazing how time flies when you're having having children. A good primary is important but there tend to be more of them around and places do come up, especially at the end of yr2 when some parents will move their child to private school. Some further out places can be as quick to get into central London as zone5/6 because the trains are faster (though more expensive). If your jobs don't need you to be in London then consider moving far away for more house for your cash.

Do you commute to London or work near to where you live?

If in London, then I'd second the outskirts of London idea (zones 5-6). You'll save thousands in co,muting costs, rent might be lower so you could really boost your savings over then next year or two and then buy something small and affordable in those parts (again, probably cheaper than somewhere expensive in Surrey).

We were in your position maybe 7 years ago! We now have 3 children and live in another country, so a lot can change in the period of time.

We bought a 2 bed flat in a leafy zone 6 area a few months before TTC, and I’m so glad we did. I got pregnant on month 1 of trying, and it was twins. The property market went crazy shortly after we bought, so when we sold 3 years later we had accumulated nearly 75k in equity to use on our next house. We never would have had a hope of getting a foot in the door had we waited; we built up far more equity than we would have been able to save in the same amount of time. Also, as a PP has said, it was much, much harder to get a decent mortgage once children were in the picture. We had a terrible time getting one once our third was born (hence the move). In the end, DH took a higher paying job in another country after our third was born as we just couldn’t swing a mortgage in London on a bigger house and the commuter village alternative didn’t appeal to us.

We bought a smaller house in a nice area. We can't afford a 3 bed where we are (villege on outskirts of town in home counties) but the area is perfect for us. We'll hopefully convert the loft but we definitely had to compromise. We lived in zone 6 before but couldn't afford the jump from flat to house and wanted to move before our child grew up. I'm a planner too and thinking about this stuff helps me focus!

Ditto JoJoSM2. I'm in similar position but slightly different to you OP. We are looking to upsize before having DC because whenever we might have DC (hopefully), our current house will be too small for us. It isn't good time for us to sell thanks to Brexit (and we are not even in our current house that long), but factor in how hard it would be to get a mortgage while pregnant/maternity/early year childcare costs, we decided it's better to try moving now. Also is DH thinks I would be too stress out to deal with selling, and moving if regrant (which is very true). We prefer to be in the same area, but have loved other places as well for options. We are not looking to invest, we fully understand we won't get as much as pre-Brexit, but hopefully to recoup the lost in the next house.

OP, I would personally avoid 2 beds flats in current market. Go for freehold houses (good size 2 beds or 3 beds) with garden, you don't want to be in position of the flat becomes too small and can't move because not able to sell at the price you want, or not enough equity to move.

OP, do you know how much you’d be able to borrow? And how much savings you’ve got so far? If you wanted, other posters could advise on some nice, affordable areas.

Yes, I work in London and commute. We are in zone 6 but in an expensive area.
We only have 1 DC planned for the next few years so the idea is to save as much as we can before DC arrives (still TTC now) and then start saving again once they go to school and childcare fees get lower (and hopefully we will also be on higher salaries).
We are way, way too far off from putting a deposit down right now so if we prioritised a house over a child, we'd have to wait at least another 3 years and I would be mid 30s and my husband already beyond 40. I don't want to wait this long.

I think two decent full time salaries and 1 DC only shouldn't make it too hard to get a mortage for a 2-3 bed place in zone 6? I am hoping our joint income by then will be around 100K (I am considering potential promotions and increases etc over the next few years).

Also, I am well aware of childcare costs. We will be able to cover it when DC arrives, that's why I am saying we'd only consider buying once DC is in school as childcare costs will be lower.
I am not planning to stop working or work PT. We couldn't afford it and also I want to work and love my job.

OP, you’d still be better off getting a help to buy or a shared ownership property to live in for the next 7 years (lower outgoings + a mortgage getting paid down).

However, it just sounds like you’ve come on here to validate your ideas/for someone to confirm that your ideas are the sensible option. Unfortunately, they really aren’t a good idea financially. Just enjoy your area but come to terms with the fact that you’ll probably get stuck renting forever.

I'd get on the property ladder before you have a baby.

This, all else being equal (age, fertility etc). We went for somewhere with a few good primaries and a secondary that’s been OK - excellent forever, so we know we have a safety net.

@JoJoSM2 I think your message is a bit harsh. How can you say we'll be stuck renting forever?
We have good jobs, potential for promotion and salary increases and once our child will go to school (if we'll have one), we'll have at least £1000 spare cash left to save every month. It might not get us a house straight away but certainly in a few years we could be able to afford a property.

I am not in a crazy rush to buy and own a property right now - I never understood this mad rush to do so which is typical of the UK mindset. I can get on the ladder in my 40s maybe instead of my 30s and it is ok.

But it's unfair to just tell me I will never be able to own.

Sorry OP, no offence intended. I just don’t think that I can see how you’re going to have all that extra money to save up whilst paying wrap around care, school holiday care (unless you’re a teacher of course) and spending money to clothe and feed your child + provide toys, hobbies etc.
I know you feel differently, but I’m pretty sceptical of couples who struggle to build up savings pre-children then being able to be model savers later.
I do wish you the best of luck, though.

@JoJoSM2 our income has increased a lot over the past 1.5 as I have a much better job and have managed to build a career path over the last period. You don't know why we haven't been able to save up over the past few years (ie: our income, job situation, family history etc) and certainly it is not because we were throwing our savings in the pub or buying expensive clothes etc. so you cannot assume it will stay the same forever as it has changed a lot (for the best) already and I am positive we can work hard and improve even more. It might take us a few years longer, yes, but many people with way less money than us manage to have families and own a house eventually so I don't see how two people with decent job couldn't aspire to own a property in the long term.

Location vs space = everyone’s dilemma.

If you rent a 2 bed flat and only have one child you will know once you have your child if it is enough space for you as a family to be able to stay in the expensive area that you like......I would recommend renting one with good storage, garden and soundproofing from neighbours to make life in a flat with a toddler comfortable.

Trust that life will evolve and pan out for you - don’t stress about 5 years time - have a plan but be flexible to be open to opportunities and ready to deal with any challenges that present themselves.

Relax and good luck TTC.

Well the main reason is because property is completely unaffordable for many , especially in the South East...
You don't have to be spending on frivolities not to be able to afford a property. It's just simple demand outstripping supply.
It's fair for people to point out that it will be much harder to save for a deposit after having a baby... you don't know what decisions you'll make about your career etc.
So of course do whatever you think is right, I think posters were just making suggestions based on their own experience.
It is usually best to try and buy as soon as you can and certainly before children if possible. But it isn't possible much of the time!

I would definitely buy before having a child. It really is so much harder the other way around. We only just managed it, with a lot of hard work, overtime and favours.

You can't really appreciate how much having a child affects your income, either through loss of earnings or childcare costs. This obviously has an impact on affordability and how much you can borrow.

We ultimately couldn't afford to live anywhere near where we wanted to. But it worked out ok as there were others in a similar situation so we have met other young families who are new to the area.

We both wish that we'd bought first though. I had to give up my job in London that I loved as the commute was too far and expensive. My DH misses being near his friends and decent pubs!

Well, but as I said, unless we waited a few more years, I cannot afford to buy now. So it's either postponing TTC for years or trying to make it work the best way we can.
I don't understand what the point is in keeping on saying "it's better to buy first". Of course it is. But we can't afford it now.

(I grew in a 2 bed flat although not in the UK. In Europe most families live in flats with no garden and no soundproofing, so I don't even understand what the fuss is all about when people say it's hard to be in a flat with a baby?!?!)

I don't even understand what the fuss is all about when people say it's hard to be in a flat with a baby?!?!

Stairs when you're carrying a 10+kg toddler and bag of shopping and changing bag and sippy cup... sound issues when you're thinking of sleep training/praying the baby naps when your upstairs neighbour starts vacuuming... storage when your child needs a new wardrobe every 3-6 months and new toys/books every year... It's doable but can be difficult, at a time when you have quite enough difficulty. And generally (sadly) the quality of flat conversion /soundproofing/storage in the UK isn't good when compared to mainland Europe.

OP, if you're dead set on not waiting to TTC, I'd be seeing about a second job or otherwise bringing a bit more income in now (or moving somewhere cheaper now, if that's realistic). It's really, really difficult to save once children are here.