smaller mortgage v nicer property

[Greenhats10]

Wasnt sure whether to post this here or AIBU. Was having a glass of wine with a good friend of mine last night who is also trying to buy in London and she told me that she and her husband have almost split up over their property search. My mate thinks they should get a flat and a smaller mortgage because they have small kids and need cash now, her partner thinks they need to buy a house and think of the future. I think price wise it's about 150k-200k difference and I sort of see her point.

I was trying to reassure her that it'll be ok either way but apparently they just can't agree and she was really upset. What would everyone else do? Would you opt for a flat and hope to have more money per month now or stretch yourself to a house but pay more per month.

[Greenhats10]

thank you everyone! will send her the thread, maybe that'll help.great to ha e everyone's input

[TaleOfTheContinents]

My PIL have bought and sold 7 homes in their lifetime and their advice to us when buying was to buy the best you can possibly afford because you never know whether you'll be able to move upward so it should be somewhere you'd be content to live forever, if needs be. The key word is 'afford', though - probably not a good idea to overstretch in the current climate, but if your friends can afford something more suitable (the kids will soon want their own rooms), I would definitely do that.

[JoJoSM2]

I think we’re just a sporty/outdoorsy family and things like bike rides are much more pleasant along fields with sheep than a busy park.

[Desiringonlychild]

@JoJoSM2 Yeah i just get bored with the greenery if that was the only thing to do. How many times can you walk past trees and grass, they all look the same after a while. I do it for the exercise, i don't even really look at it much. Its nice to look at for the first time but I can see it once, why would i need to go back. Epping Forest is beautiful, but I don't need to live near it to enjoy it. I went back to the the shopping centre and the pubs and the restaurants the day it opened. I value being within walking distance of a gym

I can walk to both hampstead heath and highgate woods so its still there but its equally easy to get to a bustling high street too.

[Desiringonlychild]

@Greenhats10 in that ideal situation, my child would go to prep school. There are plenty of amazing prep schools in north london but not really walkable. In West Ken, you have so many amazing prep schools within walking distance.

and in the event my child goes to state school, i would choose faith school which doesn't have a catchment. but yeah i did choose to live in north london for the state school reason!

[Greenhats10]

@JoJoSM2...sort of but what you supposed to do with all that greenery and I speak as someone that grew up one minute from Wimbledon common....great but what you meant to do there. really the best bits of wimbledon is the shopping centre, leisure centre, kids theatre etc...the Common always thought that was for old people

[Greenhats10]

@Desiringonlychild honestly, west ken ain't that great and schools are crap. But you can try Kensal Rise - they do have three beds for 650k or Crouch End -fun but still ok schools wise. Not to revive a different thread - would much rather live in a two bed flat in a central ish area of London than a proper suburb. But that's me...

[JoJoSM2]

I missed the bit about 1 DC. 2 beds sound fine.

@Desiringonlychild Pre-family, you wouldn’t have dragged me outside of zone 2. I think it’s just once people want to have kids many prefer space, greenery etc.

[Desiringonlychild]

@Greenhats10 I aspire to a 3 bed flat in west kensington and I hope to sell my 2 bed flat in East Finchley and upgrade ot that. It sounds really faraway now. But I hope everyone thinks like MNet and moves to sutton/Harpenden/st albans/bucks and west kensington flat that is 800K drops to 600K!

I sound insane now, but with covid, you never know. If I was your friend and had to move now, i had to go for the cheaper property. When house prices drop, it would be very bad for mental health to continue to pay this huge mortgage and then see the value of your house sink, knowing how much money you could have saved. But if your mortgage is lower than your rent previously, then maybe it doesn't feel so bad. As for location, I just read an article the other day that the highest increase in UC claims are in outer london suburbs and commuter towns like guildford and the article attributed it to the fact that low and middle income earners tend to live further out so it may be surprising but outer london may see the worst house price crashes.

However in a post covid world, this does make sense. Outer London only makes sense when you have to commute to work daily. Inner London are for those who love city life and also foreigners who are investing/used to a different lifestyle. If you don't have to commute to work and don't love city life, it makes more sense to move out of London altogether.

[Greenhats10]

does everyone really aspire to have a 3bed house? I mean in the case of my mate not sure they can afford a 3bed place, but even we are happy with a 2bed. We only have one DS so I'd be reluctant to pay for a spare room just for the sake of it - though an office might be nice I guess....

[intheningnangnong]

I think flats are harder to sell in difficult markets. I’d always get a house.

[sunshinesupermum]

3 bed house with garden and space so they don't have to move again. This probably means moving to a cheaper area but keeping costs down by looking for a mortgage that relies only on one salary. Buying a flat entails leasehold costs which is something they must be aware of.

[JoJoSM2]

150-200k difference between a 2 bed flat and a 2 bed house? Sounds like a pretty central, expensive area.

I’d just get a 3-bed house with a nice garden further out and still have the lower mortgage.

[Greenhats10]

In their case, they are looking at two-bed houses or flats so in terms of space it's pretty much the same. She's mainly worried about a)job security over the next year or two - with a higher mortgage they wouldnt be able to live on one salary if the other lost their job, b) i think the extra money would go towards things like after school clubs, holidays, maybe overpaying their mortgage or pension - things they have now basically.

When we discussed it I definitely sided with the smaller mortgage cos am pretty cautious but relaying it to my husband he definitely went for the house........

[gigi556]

We went cheap and relatively small - although still have a 4 bed terrace. I wish we'd spent more and gone bigger now we have a son. Bedrooms are ok but I feel like we live in a shoe box. Wish we had another reception room and a garden to put an office in - 2 of the rooms are used as offices at the moment. 😭 I'd go bigger as long as it's not too much of a stretch. Moving is a ball ache.

[Hothammock]

I think that it depends on the likely trajectory of their career progression.
Making lots of moves takes a lot of money time and energy so if the flat would be a short term move, I can understand why the Dh would want to cut that out, make the stretch and go for a longer term solution.
It might be tight for a while but if they are likely to benefit from pay increases because they will pursue promotions in the next few years then they will be in a better position further down the road.
I assume they have already benefited financially in some way from living in a flat over the parent's house. It probably makes sense to reap that benefit and make the stretch to a longer term house.
Why does your friend favour a smaller flat? Is she wanting a finished place rather than a bigger house that would require work etc?? I'm not buying the financial stability rationale... A smaller mortgage means more cash for sure but what is she planing to do with it? Spend it? On what? That's not financial stability and is pretty short sighted.

[Bells3032]

My husband and I had this conversation ourselves and were determined to get something bigger and stretch our mortgage given my husbands income is likely to increase in the next few years. But we said we'd look at both ends of the pay range. We ended up falling in love with a house at the bottom end of our price range - the location was better than the more expensive ones and close to a good school. We're taking a 20% smaller mortgage and ending up with about £50k in savings once we've repainted and bought furniture etc. We decided we'd rather have that at this point in our lives and enjoy nice holidays and not have to watch every penny.

But the difference is what we are buying is still plenty big enough for a family of four...just not our dream house. And we can decide in 5-10 years whether we want to pay down our mortgage and enjoy life or to move to dream home.

But we let what we fell in love with decide for us and it worked.

[Newbracelet]

This sounds wanky but honestly I've lived it. Smaller mortgage. Life is for living now. You won't get these years back.

[EL8888]

Another vote for move to a house now, to avoid the stress and cost of additional moves

[JoJoSM2]

Maybe compromise on a small fixer upper house? Cheaper than any other house and they’d have a low mortgage.

Or compromise on the area and get a house for less money. The children would need to change schools but better now than in secondary.

[BluebellsGreenbells]

I’d go for a house with children especially as there’s no fees at the moment and kids grow quick so they’ll end up moving again in a few years for loads more money.

[Viviennemary]

If they're going to stretch themselves the timing needs to be right. They don't want to overpay for a house. I'd go for house over small flat with children.

[Greenhats10]

@JoJoSM2 at the moment they are living in a flat on top of her parents' house but thats not a long term solution and I think they feel that they have to get their own place. Her parents are super lovely but from what she says, it's time to move on/out.

Realistically, they know that this might be their home for the long term which probably adds to the stress. It's sad to watch two lovely people being at loggerheads

[JoJoSM2]

We’d sit down and put a spreadsheet together (or a few).

Are they paying rent now? Presumably even a mortgage on a house would be less per month than rent?

[Greenhats10]

They are both in public sector jobs, she's a colleague of mine and we are all in our 40s. So probably won't get huge pay rises anytime soon and no idea whether there will be future redundancies or anything like that.