If you were a FTB

[OnTheHuntForAHome]

Would you

A- get a small/cheap first house just to get on the ladder

Or

B- Max our budget for a nice for expensive long term house?

We've been looking for a while, a house has come up but it's top end of the budget but we wouldn't need to move again for 10+ years if we bought it. Higher monthly payments too which would be tight etc

It depends on how stable your job is/ whether you’re likely to get payrises etc.

My preference - in a Stable job - would be the second option otherwise you will have two sets of solicitor fees, stamp duty, estate agent fees, moving costs and you’ll inevitably buy curtains / furniture / maybe white goods for the first house that don’t necessarily fit the second.

We did A because we wanted the extra spare money (due to cheaper mortgage) to have a go at decorating/renovating how we wanted, having always lived in rentals. It's a 5-10 year place for us so not really long term but fine for now, and has increased a lot in value so if we were to sell up and move, we now have a bigger budget after 2 years than we did when we considered your option B (if that makes sense!)

B. As pp said, the savings in stamp duty and paying fees again in a few years would wipe out any savings from buying cheap now.

Exactly what @stealthninjamum said. As long as your jobs are reasonably safe or you can get another one easily.

I’d rather compromise on furniture, fixture and fittings if necessary until I had the money to upgrade. Which explains why I’m sitting here with a 1980s pink and marooon bathroom XX years after we moved in .

Not a first time buyer but we did consider this. We decided to keep our minds open. We actually ended up falling in love with something under budget (by £150k) and decided to go with it.

We are so glad we did....we took a smaller mortgage so its very manageable and have plenty of savings in the bank which means we feel secure. Small things that needed repairing all came out to more than we though and buying furniture etc we are glad we don't have to watch every penny.

My Dsis did the opposite. she's got a gorgeous home and is happy with having to watch her money more carefully.

It's a personal choice at the end of the day

We did A. In hindsight I wish I’d done B. We bought our 1st home a month before the 2007 crash so property prices in our area stagnated for years, we sold it at the same price as we paid but had the stress, legal fees, stamp duty, moving fees and cost of decorating to our taste 6 years later when we should have stretched ourselves at the beginning. I didn’t feel ready for a family home though at 23.

A and then stay at A , we are on track my overpaying to pay our morgage within 8 years. We have no plans to move or extend. Rather have an extra £14k a year disposable income.

We did B. It wasn't the maximum the bank would lend us, but it was the maximum monthly payment I was willing to accept (it's a high interest rate thanks to a 5% deposit).

We could stay in this house forever, it could be a bit tight with two teenagers stomping around but our DD is only 2 so plenty of time to either stay or go!

Are the areas similar? I think that makes a big difference - if A is in a nice area and B not so much, I'd go with A. If all is equal, I'd go with B.

Moving is expensive and if you go with A you might put off making it your 'home' as you'll always have in the back of your mind that you will be moving again relatively soon.

I bought a small flat in a nice area because I didn't need more room, rather than a small house in a not so nice area and I'm glad I did but if all had been equal I would have bought a house the first time around.

If you can afford it, B, because selling and buying is expensive!

Estate Agents fees, legal fees for each transaction, selling and buying, you would be stamp duty-free as FTB, so might as well use up as much value in that as you can - and as second home buyers you bill could be steep.

Buy - only if you can actually afford it, have stable incomes that stand a reasonable chance of rising over the next 5-10 years, and, if relevant, the schools are good.

If you bought A, why would you need to move again?

We recently had the same dilemma, we ended up going for B as we do not plan on moving for 10-15 years (to move further out of London), saving on stamp duty, EA fees etc and won't outgrow the space - we are in the process of buying a 3 bed house (currently no children) and the house has loads of potential to either extend further out the back or into the loft if we did end up having more than one child
It was pretty close to our maximum which we could borrow but still very affordable, we have stable jobs and weighed up that it's more beneficial to us location wise (closer to work, friends & family) than if we had to chose areas which were in cheaper price ranges
I feel like we have made the right decision - I take comfort in knowing that we won't have to move short-term unless we really want too!

Max the house knowing you can rent out a room if things get tight.

I lost that argument with DH and I still regret the gorgeous house we could have now if he'd just be prepared to have some short term inconvenience.

@MyDcAreMarvel

A and then stay at A , we are on track my overpaying to pay our morgage within 8 years. We have no plans to move or extend. Rather have an extra £14k a year disposable income.

This and life is so I love our home because we are very comfortable with lovely neighbourhood.

I did A, but I was single and paying the mortgage alone so I needed the security of extra disposable income rather than it be tied up in mortgage payments.

As it happened, A turned into our forever home. The house increased in value over the 7 years I've been here, to the point that we had 50% equity. We released equity 6 months ago and built a double-storey extension, making it a 4-bed semi-detached which means we never have the need the move, and our mortgage payments only increased by £100 a month.

If A has potential for future extensions etc., I'd consider it, but in your shoes if there's two of you and you could afford it, I'd probably go with B to save the hassle of moving and stamp duty in the future.