Two questions about priorities (house related)

[Cuddlycatlady]

First question is how high on your list of priorities in life is your house? Is it the most important thing and you’d sacrifice other things eg car and holidays to have what you want? Or do you prefer to compromise a bit house wise in order to have more of the other things? Obviously assuming you’re not a millionaire who can have it all.

I’m eyeing up a house which would be a big increase month to month for us - around a £400-500 increase when taking into account both mortgage and council tax. I’d love a big house that we can enjoy without feeling on top of each other. It’s also really important to me for my kids to have space where they can gather with friends in the future. We are very much homebodies and would always choose a night in with a takeaway in front of the tv over a meal out type of thing. If we bought this house it would probably mean not updating our car until one of us was earning enough more to account for that. That sort of thing.

Second question is what are your priorities when looking for a house? Is it size, location, decor, layout? The house we like is nothing to write home about decor wise and because we currently live in a shithole (to put it kindly) I kind of wanted our next house to just be lovely but then I think even if it was lovely it still might not be to our exact tastes and home decor is an ongoing thing anyway so regardless of what it looks like now you’d likely redecorate within 5 or so years anyway. It’s fairly inoffensive - just some naff laminate etc.

Any thoughts?

For me it’s very important but not important enough that I’d wish to financially struggle to do anything other than pay the bills Ie couldn’t afford a take away or a night out.

Not replacing the car (unless it was a a clapper) or going on hols would be ok with me and not even come into my consideration.

It’s more can I live and not just survive and then yes, house would be top priority because it’s your haven and living somewhere you love is a fabulous feeling.

I am happy to skip holidays if we need the cash for something else, but your children may not feel the same about that.

Also - that is a massive increase in your budget, even if your current mortage is very small. Finding an extra £5k a year is not easy and would require more than skipping holidays for us! There is no guarantee that your children will feel the same urge to stay home as you do either.

Would you actually do up a doer-upper if you are saying that your house now is not in the style or condition that you want it? Particularly given the budget-busting mortgage?

Given the circumstances that you outline, it would be a no from me - too much extra money for too little return, sorry OP. What has triggered your wish for a bigger house OP, have you been looking for a while?

Priority wise I'd say having a nice house is in the top 3. I'd still want money in the pot to be able to be a bit frivalous with, and also mindful thay mortgage payments could increase, but I would rather have a nice house than update my car annually and go an an expensive holiday each year.

Priorities within a house for me -

location - schools, ease of commute

Rooms - we need a separate study and space for a home gym for our lifestyle but don't really want to loose bedrooms to these

State of repair - dh and I work Hard. We don't want to spend numerous weekends on project so would rather pay more for a home in good condition

Layout - I dislike our current set up as it doesn't feel massively sociable so this is what we are looking to change in our move

Finding an extra £5k a year is not easy and would require more than skipping holidays for us!

Yes but it wouldn’t require more than that and not renewing their car for them. Everyone’s financials are different.

And she’s already said they feel on top of each other and she wants space for the kids to have their kids round.

it sounds like you can afford it, and you can just do it up over time. Do people really expect to move into a perfectly decorated house? I think you need to live somewhere for a while to get the feel of it, to know how it would work for you.
You talk about it like you really want it- so go for it.

Some really interesting replies everyone, thanks.

Just did some sums and the increase in mortgage payment and council tax would mean an increase of £540 which is quite a jump, definitely. That’s me not taking into account an increase in energy bills. After some more rough sums we’d only be left with £500 or so truly disposable income to use for holidays, mid/long term savings etc - savings for Christmas etc are accounted for. It’s hard, just now our mortgage is fairly small in comparison to our earnings and it allows you to feel so comfortable.

It’s not quite as bad as being a doer upper. Just needs decorated and ideally a new kitchen but could live with the kitchen or update cupboard doors etc to begin with.

To have the space for the kids having a room each, plus an office and a second living room etc would just be amazing but is it worth it?! I suppose we’d only find out if we did it!

I didn’t push myself as much as I could have, but didn’t scrimp either. I have a nice house, with a bit more space than I need but not excessive. Equally I’m not willing to give up my annual ski trip, meals out etc for a bigger house.

This is always such a tricky question and my answer has changed over the years.

So a few years ago we decided we wanted to buy, but we didn't want to be mortgaged to the eyeballs, holidays and treats were important to us. So we bought a small 3 bed as our first step on the ladder (with 2 kids).

A couple years later and the treats just aren't making up for the fact the house is simply too small. We knew this was a stepping stone but we've grown out of it much quicker than I hoped. So we need to move. The compromise we've tried to make so we can still have one holiday a year but so we have a big enough house is location. We aren't from here so aren't particularly loyal to a location, but we are moving about 20 miles away to a less desirable town (but has good schools) to double our square footage.

Our priority with our first house was location, we loved the school and it was good for work. Now I work from home more and my DH has a lot more flexibility, we can be more open minded, so location has actually dropped down our list. We have lived in several places and know we can make the area work, from rural idyl to city living, we've always just made it work, so long as it is safe and has good schools.

This time house couldn't be compromised, it's the forever home. My husband is a petrol head, he wants a double garage and a room for himself (man cave, sorry for the cheesy terminology!). I wanted bigger rooms for the kids and an office space for me. Detached. So for us to get this in budget, we've moved. Our budget has increased, but we can still have a holiday every year which I won't give up, some fun money for ourselves. We've also decided to get help to buy, I know this isn't a decision that would suit everyone, but for us it enables us to get to the forever home quicker, makes our mortgage more affordable so we don't have to adapt our lifestyle too much, and I am quite confident we will be able to remortgage it out eventually. We had children relatively young, we have plenty of time to over pay the mortgage down the line (and good insurance if anything happens to scupper that!) sometimes it is about taking risk and weighing up what you're comfortable with, we are still relatively new in our careers on good trajectories.

Lockdown has certainly exasperated the desire for a nicer home too.

Not sure if that helps!

@notheragain4 we sound similar actually - we also had our kids young and went for the cheap option for our first house (only option tbf) but we are definitely outgrowing it now! My partner is probably at career peak but I’m hopefully not and don’t quite work full time yet either so there will be that little increase in the future regardless if my actual salary goes up.

And yes, lockdown has really highlighted that this house is too small.

@Cuddlycatlady are you passed the childcare stage? My youngest starting school was a big financial reprieve for us though we still pay some after school fees. Now we are only a couple years away from not needing to be quite so "present" everyday (ie if I can get to London a couple of longer days a week) my career will open up further. Though mindful teenagers are expensive too, but hoping not to the extent of 4 figure childcare, until university age at least!

House where I live and sleep 50 weeks a year is more important than holidays, eating out etc.

Location location location- smaller house, good location is better than vice versa.

But £500 pm disposable doesn’t sound much - bigger house means higher energy costs and higher maintenance costs for example. Kids also get more expensive as they get bigger!

Pretty much past that stage, yes. I’m the same as you that I pay a little aftercare but it’s less than £100 per month. Having primary aged kids definitely limits your work opportunities doesn’t it? I’ll definitely have more options when they hit secondary and can be home alone after school etc.

@Taswama when you put it like that about 50 weeks a year it definitely makes sense!

That’s £500 with pretty much everything else paid for including all their clubs (based on what they do currently, can’t predict what they’ll be doing in a few years!), haircuts, birthdays, modest clothes budget etc all accounted for which maybe isn’t as bad as if you’ve got to take all of that out of the £500 but it doesn’t leave much room for emergencies.

Five hundred quid left a month is actually a very decent buffer. For me I’d recommend going for it

Your home is your sanctuary and honestly I’m now in a house I love and it’s a fabulous feeling to love where you live. Don’t get me wrong, holidays are great but not worth waking up every morning feeling cramped.

Plus with five hundred extra a month you can save in a holiday fund.

Ok £500 is great if you've already factored in lots but I'd aim to save at least half for rainy days not holidays.

I sacrificed everything to get on the housing ladder. We didn't sacrifice as much when we bought our forever home because we didn't have to. Is the only way you can afford a suitable house sacrificing holidays and cars? Or is a compromise possible?

We were aiming for a "stepping stone" house from a flat (3 bed semi), and for various reasons ended up buying a large detached 4 bed in a good location. We blew the budget, but it was better value.

1.5 years in and I am so glad we did it, because this pandemic has shown that you just don't know what's round the corner and now we know we don't ever need to move.

I think £500 of completely disposable income is fine. Plus, once you're in your house you never know what you might be willing to cut down on.

For me, I would put location at the top of the list but not at the expense of everything else. We are in a slightly less desirable area than our flat, but its actually a more convenient location. However we could have saved £60-£80k if we had moved to a much less desirable area but that wasn't an option for us.

For us having a teen and 2 adult DC living at home who can't afford to buy yet, space is important. I still like an extra bedroom for visitors who come quite often. My dh often works from home so needs a study. Out home is very important to us.

When we bought our current home we stretched ourselves. It meant we both ran oldish cars. We had holidays but always self catering. We could have a takeaway but maybe only twice a month. I was working full time then and I know sons would have liked more for Xmas than they got.

In my view the gamble paid off as we had about 10 out of last 15 years with very low interest rates. The first 5 years were tight but then we both got promotions and pay rises in next two years. We even overpaid on our mortgage by £400 per month. Now we have less than 4 years left to pay. I have never regretted taking the gamble. I now have a 6 bedroom house in pleasant location with big garden too.

Space, location in order to access a good school, and having a spare bedroom are top 3 for me.

Mortgage rates are likely to remain low for maybe 3 or 4 years, buy just remember interest rates can and will at some point go up again. Pay rises will go up again but maybe not for s couple of years.

Do you or your DH have any chance of a promotion in next few years?

We could definitely go for something else if we had to @walkingchuckydoll - we only really need three bedrooms but I desperately want four for example so there are ways to get a more suitable house without making any sacrifices but that’s really what my thread was about - do people think some things are worth sacrificing for a ‘perfect’ long term house.

I’ve done another more accurate spreadsheet and it actually looks like it would be more like £900 disposable. The income was off before and a couple of expense categories were too high.

@caringcarer I love the idea of having enough space that when the kids are adults they can still come and stay for Christmas etc so it sounds like you have that and enjoy that aspect.

It’s really interesting to get people’s take on this but obviously I know it’s a decision only we can make. Is this something I could ask the mortgage broker we used when we bought this house? If he is used to dealing with mortgage applications day in day out he might be able to look at our figures and advise if he thinks it would be too tight? He’ll know if people on our sort of income are buying houses of that budget hopefully.

No chance of promotion really but I could possibly change job and get more money but I’d need to weigh that up against the flexibility my current job allows me. OH is probably earning the top end of what we’d expect for him. That won’t increase.

Affordability is not just about mortgage payments. Do you have other debt?

Also, numbers are less meaningful than a %. What % of your take salary is the mortgage payment? What % is total debt?

It would be 21% of our take home.

We currently do have £2500 on a 0% credit card. I’m doing my calculations based on that being paid off as I’m working really hard to get it paid off. We have funds available to just pay that off if push cams to shove but we’d rather not.

At the time we bought our house, our mortgage was 21% of our take home pay

I say go for it!! Wouldn't hesitate at all.

I don't think percentages are all that meaningful really. You could have a mortgage of 50% of take-home but if your take-home is £10k that still leaves plenty to live on! Similarly a 'low' percentage of 20% doesn't leave much if your salary's very low. It sounds as though you've done your sums and can afford it OP. For us it's always been a balance of location and size/style of house, but we similarly have generally prioritised bricks and mortar over fancy cars/clothes/holidays.

Our home is our first priority but as with PP not enough to struggle financially. Our mortgage broker asked how much we wanted to pay per month and we worked out our budget from that. We could borrow more but we want to be comfortable on one salary if one of us loses our job.

Yes I would forgo a car and holidays.

Important purchase factors are budget, location, then size. But given DH has been told he's never returning to his office we may have to forgo location to get somewhere big enough for a home study.