Planning to start family, should we stay in current home or move before kids arrive?

[Rosestar123]

Hello,

My partner and I (27 & 28) currently live in Walderslade, Medway. We were FTBs in May 2018. At the moment, we have a low mortgage £560pm at 2.19%.
We bought the house under our max budget, we were keen not to outstretch ourselves and wanted somewhere could add equity too. Due to the low mortgage, we are able to save £1.5k a month currently (after bills, fun things, etc paid). Bought for £170k - houses on street with the same layout have sold between £185-197K over the last 2 years.

It is an end of terrace, 2 allocated parking spaces to the side of the house, big garden, 2 bedrooms but a very small living space. Our downstairs is one open plan rectangle, which is our kitchen, dining, living and my home office (homeworker due to COVID). So I am feeling very squished! Which hasn't helped from working from home the last year and being in the same room. And its only me, my OH and dog living here.

We are planning on getting married in August 21 (fingers crossed) and then plans to start a family shortly after.
For context, we are both public sector workers, and no large pay increases on the horizon! I am the main earner, which will have an impact on our take-home pay when I do go on mat leave.
We are paying for the wedding ourselves and currently paying off all our credit cards so come August we will be married and have no wedding or credit card debt! We will then begin the house saving in earnest.

The question we have been toying with, should we stay where we are and have kids here and move in 2/3 years.
Or move next year to somewhere bigger prior to kids.

OH feels it's better to stay where we are, save as much as we can (due to low mortgage v. income), and says move after we have 1st child. That way we can move to forever home and I not turn around a few years later and want to move again to somewhere bigger (which he has a fair point). He thinks that a lower mortgage means when I go on mat leave I can be off for longer as we'd have smaller overheads etc.

However, I feel the space is too small for a family, worried that we will feel on top of each other and that if we spend the next 2 years saving, by the time we do move we will have been outpriced to what we want. Is it worth to have ££ sitting in the bank when it could be best put to use invested in property? If we were going to move, the mortgage advisor says that we'd roughly be lent a max £335,000. We'd need to add a deposit on top which we'd get from equity and savings. But that's looking at mortgage payments circa £1,200.
Ideally would like a 4-bed detached house, garden, and family living space. So I'm worried that getting what I wanted for our current budget is pushing it and if house prices rise even more we will have to go for somewhere smaller.

Thank you! Appreciate any thoughts.

Picture attached of floorplan of the current house.

I would go with your OH's plan. That way you have time to save, and after having DC you will have a better idea of what you want and can afford as a family of 3/4. I'd also like the idea of only moving once, as moving is so stressful and expensive.

I agree with champagne

My only question would be could you afford the mortgage payments of £1200 per month if you were also paying for childcare?

From your maximum mortgage amount I’d guess you have a similar household income to us, and we’re currently considering increasing our mortgage to the same sort of monthly payment. However, we don’t have any childcare costs - if we did I don’t think we’d be able to afford it.

In terms of space, babies take up very little. However, once they’re bigger or you add a second one, things do start to feel quite cramped (that’s what we found, anyway). We stayed in our first house until we had DC2.

I wouldn’t be wedded to the idea that you can only move once and have to buy the forever home now. Circumstances change - you might move location for work, you might have more or fewer children than you expect, you might just decide you fancy a change! I wouldn’t worry too much about having to get it absolutely right in one move.

@Clettercletterthatsbetter

I know, childcare is one of those things I was so surprised how expensive it would actually be! My MIL said she'd help with childcare, I may have to probe how solid that offer of help is. But rough costings of putting potential DC in daycare 3 days a week, would mean we'd have about £500 left a month after bills with a 1.2k mortgage. I mean we might not be able to afford DC2 ...but trying to plan as far as I can (!)

I suppose stop gap is moving somewhere in the middle for less money.... which OH is not liking the idea of and agrees with @Champagneandmonstermunch @fitzbilly that moving is such a hassle.

I just feel so squished in this place already! That I am trying to separate what's practical and affordable v. me feeling like the walls are closing in from lack of space!!

I would want to move first.

We have done this and are happy with our choices.
I agree with you obmn moving and personally wouldn't want 1 let alone 2 kids in a house that size (sorry!)

lenders now include children in affordability so the mortgage might be harder to get post kids.

You may want to ask your mortgage advisor what the impact of childcare would be on affordability criteria, as it could mean lenders wouldn't give you as much as they currently would. That child be an argument for moving now, before anyone else can decide you can't afford it.

I think I'm also Team Middle Ground. A 4 bed detached house sounds lovely but is a big jump from a 2 bed terrace, and it sounds as though you're questioning the overall affordability of your dream home. Equally, though, if you're already feeling a bit squashed where you are now, that won't get any better down the line. I'm currently trying to move from my (large) 2 bed because, having had a baby, I find I need guest space and more storage. I agree that moving is an expense in itself and a PITA but equally, I think the whole 'Forever Home' thing is guff. Different homes will suit you at different stages in life in different ways, in terms of space, budget, location and all sorts. I'd look for a nice 3 bed, 2 reception room semi that'll suit you for a decent chunk of time and be a step up from where you are now, while not stretching the budget to extremes.

Also, gently, bear in mind that sometimes planning to start a family and having that happen are different things. There's no reason to assume you'll have trouble, and I sincerely hope you don't, but it took me a long time (and a loooooooooot of money) and I think if I'd been rattling around in my dream family home at the time, it would have sucked.

[quote Rosestar123]@Clettercletterthatsbetter

I know, childcare is one of those things I was so surprised how expensive it would actually be! My MIL said she'd help with childcare, I may have to probe how solid that offer of help is. But rough costings of putting potential DC in daycare 3 days a week, would mean we'd have about £500 left a month after bills with a 1.2k mortgage. I mean we might not be able to afford DC2 ...but trying to plan as far as I can (!)

I suppose stop gap is moving somewhere in the middle for less money.... which OH is not liking the idea of and agrees with @Champagneandmonstermunch @fitzbilly that moving is such a hassle.

I just feel so squished in this place already! That I am trying to separate what's practical and affordable v. me feeling like the walls are closing in from lack of space!![/quote]
I'd say £500 a month after childcare and bills will be a real struggle.

Especially when you factor in that as public sector your pay most likely won't go up and the tax free allowance is frozen. But council tax, nursery fees & other bills will still continue to rise and eat onto that amount.

So if you want 2 children and that size house then you're probably looking at 6 years before your nursery fees reduce and it's more affordable.

Based on that I'd be inclined to say do a smaller now then another in 6 years.

The government will do anything to stop a property crash so I think having the money in a larger property is a safer bet then having it in savings. If in savings there is a risk that property prices will increase and make the saving worth less as a % of the value of a house.

Do also look carefully at secondary school admissions areas. It is patchy in Medway and do not assume your future child will pass the 11 plus. I know schools can and do change but the costs of moving and the hassle are considerable. I would also consider a three bed in a nice area over a four bed for the sake of four beds.

Is dh dropping down to four days and you doing four days? Or do consider doing extended hours. Do not shoulder all the drop in hours/salary yourself especially as you are the higher earner.

Your DH's plan. You might take a while to conceive and then at least you'll get time to clear debts and save.

It took us 6 years to conceive - realise that's unusual but up to 2 years isn't particularly.

I think I’m with your DH. Overpay in your mortgage as much as possible (no point putting in savings with little interest whilst paying a mortgage).

In the meantime; you say you have a big garden. How about a garden room, that can offer a home working space/playroom if for kids.

I wouldn’t want to be worried about such a huge mortgage during Mat leave by moving.

Last point I’d make is that you’re only 28; not many people can afford their ‘forever’ house so early; so as someone unthread said, it may be worth a mid option before then; that is a huge jump from current house to a 4 bed detached (which in all honestly sounds unaffordable until any children you have are at primary school).

Garden office: something like this, much cheaper than extension route (and likely to add value to house as long as it doesn’t take up your whole garden)

www.gardenaffairs.co.uk/our-ranges/log-cabins/kubus-log-cabin

Is your second bedroom currently in use? We are in a 3 bed and our third bedroom wasn’t being used so that felt like it gave us wiggle room (baby didn’t go into her room until 1 but there was lots of furniture switching before then).
There were times on maternity leave that I regretted not moving BUT I had a total change of heart from pregnant me and decided to become a SAHM after returning to work. No way could we have afforded that if we’d moved to somewhere bigger pre-baby.
I’m now pregnant again and the plan is to put a garden office in and use all three bedrooms as bedrooms (potentially extend the kitchen too). I’ll go back to work when this one is two (probably part time) and DH has had a couple of promotions since I got pregnant so we should be able to upgrade then - we will definitely have outgrown the house by that point!

I stayed in my first home to have kids- low mortgage (compared to our friends) but smaller house. But we had 3 bedrooms and there was no working from home back then. I don't regret the fact it was stress free in terms of cash. However, I do regret the upheaval of doing it later, the fact we were in a small house.

If I could go back and do it again we would have moved before kids and I would have worked an extra year to facilitate it..... Once you have the larger bills you will meet the larger bills.

You are very young to be in the forever home. Go for the next stage home....Good school and secondary school catchments. Enough space you/partner can work from home easily (so an extra bedroom or study), big enough living area for toys, equipment, and to have the family/friends over - don't under estimate how much space one or two friends with their babies takes up.......then in a couple of years you start having a second child as will some of your friends....then it gets busy......

I don't know if this applies still but I think people including Kirsty Alsopp used to talk about missing the point in which you should trade up to a middle sized home and then never managing the leap to your 'for ever 'home. I would imagine that is to do with having more expenses once you have a family and less income. May be that won't matter to you but if you want more space around you when you have your family I would bite the bullet sooner rather than later. Also consider schools which may seem a long way off but soon comes round. I assume your jobs are as secure as they can be if local government . But I would think best to make a step up rather then two steps up.

One baby is fine in a small space. But as the baby becomes a toddler and you possibly have another baby, it gets much harder. We moved out of our small first property when DC1 was 18 months and I was pregnant with DC2, which was good timing for us.

We brought up our family in a small home after thinking really carefully about it. It worked well for us as we have never been trapped with work, unlike many friends. I like to feel I have options.

A lot is about your personal feelings, there isn't a right or wrong.

Definitely wait! Having a child changes your outlook on everything, every single aspect of life. Stick with the low mortgage (and big garden) to give you options...

We were in a similar set up. Low mortgage and easily saving £1000 a month. Then we got married and moved house and had a child. It was fine whilst I was on Mat leave because my maternity pay was generous, however once I went back to work I went part time and we had nursery fees we just broke even every month.

We then went on to have a second child a few years later and only now (one child is 4 and the other 2) are we in a position to begin saving again.

We always knew it was going to be tough, however I am in a job where I'm almost guaranteed a good pay rise every year until I reach the top of the pay scale and my husband gets an ok pay rise every year as he is also towards the bottom of his pay scale. So we knew this would be the bottom in terms of finances and things would only get better.

We moved to a house where our kids can grow older and I see us staying long term, if not forever. It's always worth considering schools when you factor in moving. If you would need to stay there and save for a few years you could find yourself looking at moving around the time of school applications, which can be tricky!

Just to add as well. Originally we decided to either move or have a baby. We went for having the baby and staying where we were. Got pregnant quickly but had a missed miscarriage at 3 months. Decided it was silly to put off moving as who knew what would happen on the baby front. So started moving house, then got pregnant again, ended up moving 2 weeks before I gave birth as our first buyer pulled out and we had to start the process again. I definitely wouldn't recommend doing that 🤦‍♀️

If you think you can afford it, I would stretch yourselves and move now. Where I live, house prices are rising, so if your income isn't going to change much (and potentially decrease if you return part time) then that will affect what you can buy in a few years time.

If the space feels cramped now, it will be a lot worse with prams, cot, baby bouncer, high chair etc.

Maternity leave can be a good opportunity to do some work to a new house, you've got lots more time to do little projects etc and potentially save some money doing things yourself if it's a house that needs some work or updating.

We were due to move house to somewhere bigger when I was pregnant with my second child but it fell through and we're still in our small house now over 3 years later. There's light at the end of the tunnel as fingers crossed we are moving later this year, but I don't think I'd do it again. It's definitely taken a toll on me living in a small space with 2 young kids, stuff everywhere (no matter how much I try to declutter) and I don't feel I can invite friends and their kids around to play (pre-Covid times). If I could do it again I would have pushed ourselves a bit financially and moved somewhere bigger a lot sooner, for my own sanity.

Maternity leave can be a good opportunity to do some work to a new house, you've got lots more time to do little projects etc.

That... has not been my experience!

If you aren't sure then you should really wait! Prices may not head much down or up in the next few years, it is very hard to say, but as a PP says the housing market is being supported. Perhaps concentrate on getting married and having one and then see how things are (but do talk to a mortgage advisor as this may help you make a decision).

I also think this idea of 'forever house' especially when you are in your 20's isn't very helpful. There are so many different reasons why you might want or need to move. I am late 40's and have on average moved every seven years (buying/selling not renting) for a number of reasons including for schools. I would never have predicted our life would have gone in the different directions it has.

I would move now rather than wait. I had ds in a two bed terrace and it was fine for a bit but we eventually outgrew it. However you are already feeling squashed so would probably struggle with a baby in your current space. Also when applying for a mortgage they do take into account any childcare costs so you may get more on your mortgage offer now than with children. I would move to a 3 bed as that's plenty of room for a couple of children and may be more affordable than a 4 bed.

The current place doesn’t look that small for two adults, but working in the kitchen/lounge would stress me out as you’d be reminded of work constantly in the evenings. Any reason you can’t use the second bedroom as an office? Even if you have to share with DH?

If you’re in a nice area for walks, shops, baby classes, or whatever you like to do, then I’d stay put for a bit longer. When you do move you might have to compromise on all the ‘fun’ factors at that point to ensure the right size, school catchments and a do-able commute for yourselves and the kids, proximity to your mil if she is going to do childcare, etc.

Do you have an idea of what streets you’d move to? Maybe get an idea of this and keep an eye on Rightmove for a while, so you’ll know what’s the right price and recognise the right house when it comes up.

I would be tempted to stay put until just before primary applications, so you maximise the deposit and therefore may end up in a forever home rather than a stop-gap.

But as people have said, toddlers in a small space can be tricky so I understand your dilemma!

Perhaps waiting another 1-2 years before ttc is another option you could consider.

If you're currently saving £1500 a month, are you overpaying 10% off the balance of your mortgage every year? That would be like "earning" 2.14% interest and almost all mortgages I've looked at allow up to 10% to be paid off the balance penalty-free. This would massively increase your equity.

That said, I'd still personally be looking to move at the beginning of next year. If you marry in August, then have a look in the rush of Autumn properties coming onto the market, you'd be able to settle in while at most 3/4 months pregnant. Then you wouldn't have had to declare childcare or maternity leave to the mortgage company.

On the other hand, you'd save about £2500 by moving before end September as you won't owe stamp duty on the first £250k you spend. It depends whether that potential saving -which you'll miss if it's not all completed by September - is worth joining the baying crowds at this point, or waiting.

If you're public sector, you can look to reduce childcare costs by working compressed hours (each working over 4 days so only needing 3 days childcare), tax free childcare scheme through work, part time 30 hours each with opposite days off, career break etc.