would you move?

[geminiflanagan]

Hello, I’d be interested to pick some brains on a topic that we are going round and round on!

We’ve been in our house for 10 years, now with our 8 year old son – it is our first home, a small 2 bed. Nice enough area although on the edge of one of the rougher areas of the town with some serious crime and drug issues which worries me as our son grows up. Nice outlook onto fields, but communal parking, no driveway etc. I am desperate for another bedroom for family from overseas to stay, another loo and also some space for me to wfh. We have quite simply outgrown the house, despite my best efforts to keep on top of it. It is a good little house though - good neighbours too!

We only have 60k left on the mortgage – with some serious effort, we could be mortgage free in about 3-4 years. The house is worth c.£160k now, and we paid £100k for it. That is the ceiling price for the area, so it is very unlikely to go above that without us spending on an extension. If we did that, I’m not sure we would recoup the money either tbh.

Our mortgage is small (c.£390 pcm), and gives us spare cash to afford a nice lifestyle. We have also paid off a lot of debt. I am very thankful for this and the lack of stress that we have in worrying about affordability in the current climate.
The idea of being mortgage free at 43 is very tempting!! But it would be somewhere that is too small for us, where we know we can't add much more value to it - so it doesn't feel like an investment for the future.

When I browse for houses, I’m not finding anything worth moving for that is under about £320k. Anything else either the same size, but divided differently, or backing onto other houses, or in areas that we wouldn’t be happy to move to. So if we do move, it would be a significant increase on the mortgage, going up to c£1400 a month based on 4%. We would have about £300 a month leftover each month after food/bills/small amount of savings, so a lot less than we currently have – I appreciate though there has been an element of lifestyle creep as my salary has increased and we do need to rein it in a bit!

Would you stick in the small house that is squished and squeezy, but would be mortgage free in 4 years. Or, would you stretch up to a house that offers everything, in a better area – but commits you to a mortgage that is 3 times higher for the next 20 years and adds a layer of worry onto life in terms of interest rates, cost of living etc, but knowing that you are investing in house that offers all the space needed and where you could also add value.

We’re going round and round on this, making a decision one day and then changing our minds the next so could really do with some external perspective. I appreciate this is a privileged position to be in, so apologies for any insensitivity. Thanks.

I wouldn't do it if we'd only have £300 spare a month after bills, that feels too tight.

I would stay put for the time being, the market is a strange one at the moment, and with the recession worsening, it could be a bit volatile. £300 buffer really isn't much in today's economic climate.

I would try to think creatively about how you use your space. E.g. could you get a study bed to create a WFH space?

Or a garden room/office?

How often do your family come to stay?

I'd stay, at least for now whilst everything is a bit volatile. I'd focus on making your current house as nice as it can be if it needs any redecorating or updating etc I might do that instead.

How are secondary schools in your current area? Or I'm any potential new area? I might move for a better secondary school but not in a great hurry.

I wouldn't upsize based on those calculations. Can you do a loft conversion/ extend at back or create a garden room?

If you extended, would you see yourself staying there a long time? Because if so, it doesn't really matter that you wouldn't 'get your money back', as you'd have the benefit of enjoying the house yourself and not having to move. It sounds like extending would get you the extra loo, office space, and place for relatives to stay, and then everything else is sorted except for the parking, which isn't that bad. As you're so close to being mortgage-free, and so could cover the cost of an extension be remortgaging (for much less than the house move), I'd go with that. Then you could stay put at least till DS leaves and then have other options, plus plenty of mortgage free years to have saved up.

In short, it's a bastard of a time to be moving/ramping up your outgoings, and with all the things right about your house, no, I wouldn't move.

I stretched to a bigger house. It has been a godsend during Covid, wfh, home schooling etc and as ds gets bigger - he's now14, he and some of his friends are six footers. He takes up quite a lot of space.

Some years my house has earned more than I have so it has been a good investment as well as a comfortable place to live. I'm late 50s now and will downsize when ds heads off to uni.

I can realise £200k when I sell, and go part time or retire early.

That's a big jump in mortgage payments, I would look into the feasibility of extending it to get what you want and staying there.

Was going to say pretty much this! I get what you’re saying that you would be spending money and then not able to sell it on for a huge profit, but first and foremost it’s your home, secondly an asset. If you extend and create your forever home, with everything except parking, and still a low mortgage to enjoy life, from which you won’t have to move…does it really matter what you sell it on for? Use the extra money you’re not wasting on mortgage interest to invest in another way if you like…a house doesn’t have to be your main way of securing a future for your child, if that’s your concern.

Stay put.

Use your extra money to send DS to a private school if there's one he could get into. Or increase his participation in sports and other activities to keep him away from the rough element.

The UK is currently in a recession or about to enter one. House prices are about to stall or fall. Prices have already started to fall in the US. If I were trying to sell now I would be worried.

I'd wait and see what happens with the housing market and keep plugging away at the mortgage. While you are waiting you can save up some extra cash to help with the move as it always costs more than you expect so buffers come in very handy.

Not a chance with 300 a month left.

Can you get a garden room with a toilet and use it as an office, or extend in some other way? Assuming your overseas family only visit once or twice a year, I don't see that as a reason to move. We're selling at the moment, it's been tough!

A couple of things, what are the secondary schools like in the area? Worth staying for or not?

Could you build an office/garden room?

Could you extend to give you more space?

Stop thinking about whether you would recoup your costs, this is about enjoying the space you have day to day and whether it is worth the effort.

When you are looking at other houses it is within a certain area to enable job commuting? Or are you just thinking about the current school situation? We moved for a secondary school into a much cheaper area but I was able to drive the DC to the primary school for several years for continuity. The reason it was cheap was because the 2 local primary schools weren't great. Fast forward and they are now both outstanding so the house prices have rocketed. The secondary was always amazing but most were looking to move for a primary school.

I was going to say move but then saw you would only have £300 left at the end of the month. It’s expensive to move, agents commission, stamp duty, etc.

Thank you, this is helpful - and pretty much the exact conversation we've been having! I think the £300 a month is too tight; DH says that is after all bills, food, etc and savings - he doesn't think we should be factoring savings in, and that in reality we would have £600. But I think we need to top-slice our savings and they should not be counted as the disposable.

In terms of extending, there are definitely things we could do here - a downstairs loo, a small extension at the back and a loft extension would all be feasible; I guess I am just wary of spending out £50k and feeling like we have no option but to stay. I don't think we would make that money back at all, I do completely agree about it being our home and not an investment but I would at least want to cover those costs but the ceiling price in this area is probably only £10k higher than our current price, realistically.

In terms of other areas, there are some grammar schools around here that we are intending on putting DS through the 11+; the specific house we have seen which would be a stretch would still be ok in terms of commuting to work, school run etc and then easy bus ride for him at secondary school when the time comes. Its a relatively small city that we are in really, with good enough transport links.

I think staying is probably the sensible move at the moment - I guess we have just been having this conversation for such a long time, I am bored with the lack of us actually making the decision, and I dream of moving to a forever home with more space. This one still feels like a temporary starter home really, rather than one we will stay in.

But I really appreciate the lack of stress that comes with the small mortgage - I am the main breadwinner, DH generally works on a series of temp contracts at low wage, so I am conscious of the pressure that a much bigger mortgage would have on me. I think that ties in slightly with me having a bit of a midlife career crisis though ha.

Thanks all for the comments, really appreciate it

I would move. Maybe not right now, wait for better interest rates. It if move

your don isn’t even a teen yet. Just you wait for another full sized adult, full sized adults visiting - AND all those full
sized shoes! It had been years since my son left home but I well remember having his rugby mates over and not being able to get in the front door just from their gigantic shoes!

we have moved 3 times in being married 30 years. Each time a bit larger of a house. All within the same town. We could not add on more in our last house and really needed more space plus extra bathroom and desperate for laundry space. We made money on each house and will be mortgage free in 3 years. I’ll be late 50s. BUT our current house, in a more mixed neighbourhood (lots of different types of houses) of various price ranges, our house as more than doubled in value. For this reason too I say move. It move wisely to a house and neighbourhood that has potential to increase in value

look to play the long game

Having seen that your DH is on temporary contracts especially, would you even pass affordability checks for a house in the £300k range?

I don't think we would make that money back at all, I do completely agree about it being our home and not an investment but I would at least want to cover those costs

But that's the point - it's not about covering the costs and making the money back. It's paying for those things that you need and want to use for years to make your life better. Invest in your day to day life. Whatever happens with the housing market is beyond your control. Having a £50k mortgage to pay off to get almost everything on your wishlist is a no-brainer compared to getting a massive mortgage plus moving costs, being stressed about cost of living increases and not being able to enjoy your lifestyle. Your call obviously, but think you need to let go of the idea that you're doing your house up to get the money back from a sale. That's a very different situation.

I'd do your improvements op and not move. See where you are when everything calms down with the energy etc etc.

It's a tricky one. I'm in a similar situation, and am choosing to move rather than be mortgage free, but the mortgage I'm taking on is lower (so an extra £500 a month which feels more doable).

I'd completely discount the space for family to stay -you are paying a huge premium for this if you're buying a bigger house for this. Think how many nights in a hotel would be paid for with £160k!

No one should be taking out a large mortgage to accommodate guests, that’s madness, it’s not your financial responsibility to house family for holidays, however If you genuinely need more space for your family’s day to day lives then I can see why you would want to move, it doesn’t sound like an extension would make you feel happy with your house as you will have not achieved your ambition of moving up from a starter home to a family house. If I was you I would move but you should scale your ambitions back a bit, for example most houses back onto other houses, that is normal in your price bracket I don’t see why you would exclude suitable family homes that are not backing onto rolling countryside, that is a luxury you can’t afford. My advice is to move but open your mind a bit to less expensive but still bigger houses.

A drop in house prices would benefit you. Eg 10% off your house price is less than 10% off the more expensive house you'd want to move to. Stamp duty is reduced too.

However, in your situation I'd wait and see what happens with house prices and energy bills. That £300pm could get partly wiped out if the energy cap is changed in future. I think it's important that you still have the ability to save too.

Thanks all, this is all very helpful food for thought. I agree on the space for family members not really being a good reason to take on thr higher mortgage, I think perhaps I was using that as a bit of an excuse to justify my want to move!

And I do understand what a previous poster that we should be more flexible in terms of the outlook - we aren't totally discounting, but it is hard to contemplate taking on a much higher mortgage and swapping to somewhere with a small courtyard garden and being overlooked from all angles. But I guess that is the compromise we may need to make.

Thanks again :)