When to move? Now or in a couple of years?

[Downtonbabby]

At the moment are people still moving or holding out a bit longer to see how the market goes? If so how much longer will you wait?

We currently live in a lovely but small ish 3 bedroom detached house that we are growing out of. We love it where we are, but I’d like to be able to give my boys (13.5 & almost 12) a bedroom each (they currently share and due to the size / layout of the room the only option is bunk beds).

We don’t have a huge budget for next house and could only realistically borrow around £80k-£100k extra as we want to still be able to pay for music lessons and clubs for the children. We are also keen to stay in our current area for schooling and catchments for DD (8) in a few years time for secondary (as she won’t be able to go to the same school as her brothers).

Just can’t decide if we should bite the bullet and look to move soon as we can just about afford a basic needs a little work 4 bed house, or wait another year or two, or possibly until September 2025 for secondary applications, as our current address would be well in catchment for DD.

We could continue to overpay our mortgage in that time and hopefully the market may be better. However I wonder if it would make much difference as we will also need to sell for less too, plus at 41 the years we can borrow for will continue to decline! I’m also aware as the boys continue to get older they will want their own space and it may be useful to have their own room as we head towards GCSEs in the next couple of years.

I now totally regret not moving 5 years ago when it was more affordable and we could have got more for our money! So I’m
keen not to move soon and then regret that decision if we could end up affording a bigger (so my work from home husband could get a study) / more finished house if we wait a bit longer!

Any advice?

Personally I would stay because:

If prices fall moving upwards will be cheaper,
If the Government have got it wrong and rates go higher than expected you haven't increased your borrowing
If you have spare money now, you can save to cushion you further on the move, and
The other advantages you mention

But I'm risk adverse and feel better the devil.you know when it's turbulent times.

Don’t worry about your lending capacity, providing you’ve got pension provision they will lend to you until you drop in to the grave. I know with people who had to borrow hundreds of thousands in their late 60s, and because they had good pensions, it was not an issue.

For me 2 teenage boys in two separate bedrooms will preserve your sanity and mental health and that’s priceless

I definitely know what you mean about 2 teenage boys, I must admit I’d originally suggested waiting a couple of years to my husband, but they are really starting to wind each other up more as my younger sons hormones are starting to kick in, which makes me more keen to move!

My husband is also risk adverse (which is why we didn’t move 5 years ago when I was keen to then!), so he would much prefer the wait option!

The trouble with husbands and it usually is men risk averse to spending money to improve quality of their families life, in the situations like it’s probably not him That’s gonna have to deal with the two hormonal teenagers killing each other on a nightly basis it’ll be all down to you.
start hunting around and see what you can afford.

Do the maths in the background and then I intend to present would you like to do X or would you like to do Y. Doing nothing is not an option.

Stay put. Trigger warning: watch the Moving Home with Charlie videos. Overpay like Billy-Ho. The value of your place may fall but should fall relatively less than the place you want to buy.

For others: If you're downsizing to capture your equity gains then get out quick.

You could put your property on the market on a test the water basis and see if you get an offer and what the feedback is.

It was what I did and I'm glad I did it this way. First time round it didn't sell. Second time on the market and when I really needed to sell, I got the offer I wanted.

I agree with this and @XVGN
I would stay put for now, on balance.

You really do not want to still be paying off a mortgage as pensioners. Bad idea unless absolutely no way around it.

Thanks for your replies, it’s really good to hear other opinions.

I think I kind of know, waiting is a better decision as it seems like a risky time at the moment with falling house prices. I was just hoping we might have been able to have moved by the time our current 5 year fix comes to an end next spring. I guess at least if we stay here though we can risk the variable rate a while to see if interest rates reduce a little as we have wriggle room and are already over paying in anticipation of the rise. If we moved we would definitely need to lock in a fixed rate as we would need the certainty for a few years with the extra we would be borrowing and couldn’t risk higher payments in the hope of possible lower ones.

I guess it is just having been a teenager who hated sharing a room and moved out at 18 for my own space, I am keen to give my kids their own space asap. This maybe more my issue than theirs currently though! 🤣

Maybe we will reassess in a year and go from there as now definitely seems a bit rocky to go for it!

House prices are generally falling at the moment, but not at the dramatic rate some sections of the media would have you believe.
Nevertheless, as you have a fixed rate until Spring 2024 @Downtonbabby I would wait until early 2024 to put your house on the market. I would aim to move house in 2024 not leave it to 2025 or later, because at some point the housing market will slowly start to pick up again and once confidence returns, there will be pent up demand that will drive up prices.

The majority of Economists now believe that the Bank of England base rate will have peaked by the end of the year (at 5.5-5.75%) and by 2024 be very slowly starting to come down. By the end of 2024, the base rate is forecast to be lower than it is now, but not much lower, somewhere in the region of 4-5%. You don't want to take out another fixed rate mortgage at the peak, so by waiting until 2024 you will be avoiding this and making the most of your current low fixed rate deal.

https://www.which.co.uk/news/article/whats-happening-to-house-prices-aVCwI8I22pBe

Financially it makes better sense to wait if you are up sizing. Let the prices settle and you will be getting your bigger house for less. How much less is guess work but it could be quite a lot, now that interest rates are at more normal levels. You say you live in a lovely house and love where you are - I would be concentrating on overpaying the mortgage as much as possible and building your savings.
The shared bedroom isn't ideal but it sounds like they are doing ok with it. No need to join the "I regret overpaying" club imo

The majority of economists didn't predict the current inflation. Heck, even the BoE thought it would be transient. The majority of economists aren't old enough to remember the house price correction in the early 90's. The majority of economists still think they are scientists! I wouldn't give much credence to what economists think.

I'm sure that Economists are able to analyse historic data even if they "aren't old enough to remember the house price correction in the early 90s". I know that you prefer to listen to YouTubers than Economists but I am suggesting that @Downtonbabby considers the majority view suggested by reputable & well established organisations.

I am old enough to remember when house prices fell in the early 90s and what I remember most is the way house prices shot up again afterwards. The house we bought close to the bottom of the market doubled in value in a few years, but all we knew at the time was that we were buying in a depressed market.

Hence my advice to Downton not to leave it too long to buy a bigger property. 2024 is a reasonable compromise given their personal circumstances and if they leave it until it is obvious that house prices are rising again, they will have left it too long to get a great deal.

Try This Money

"According to the index archives of both Halifax and Nationwide, the property decline was more drawn out than many of us may remember."

I guess it depends on the absolute numbers.
I'd move, because teens sharing, during GCSE's sounds like a recipie for disaster.
BUT, we live in an area where a 4 bed detached sells for 250k. So mortgage repayments aren't as horrific as buying a 4 bed in a more typically priced part of England.

If you wait til 2025, then take 6-9 months before you move, your oldest will be 16 - how much benifit will they get from the move at that late stage?

"The average house price peaked at £70,246 in May 1989 (a 28.8% increase on the year before), according to Halifax. It then fell very slowly, losing just 2.1% by the following May and another 0.4% in the next year (to May 1991).
Declines then gathered pace with the worst monthly fall coming in September 1992 when values tumbled 3%.
After false dawns in 1993 and 1994, the market finally bottomed out in July 2005 at £60,965. That marked a 13.2% decrease over six years."

Clearly 2005 is 16 years after the start of the crash so I think that they mean 1995.

This data is more useful than a sample of one anecdote.

Savills: a brief history of the UK housing market 1952-2022

• DURING THIS PERIOD WE HAVE SEEN….a post war boom in local authority housebuilding that is now a distant memory….
• the Barber Boom give way to the oil crisis of the early 1970s…..
• a prolonged upswing in prices through the 1980’s brought to an end by the double digit interest rates of the early 1990s as we left the ERM…..
• an unprecedented period of price growth from the middle of the 1990s until the credit crunch of 2007, which fundamentally changed our relationship with housing….
• a subsequent period tension between government ambitions to restore home ownership and the regulators desire to ensure responsible lending and….
• a wholesale reassessment of what we want from a home reignite a housing market in the wake of a pandemic that means prices have finally returned to where they were in 2007 on an inflation adjusted basis.

https://www.savills.co.uk/landing-pages/a-brief-history-of-the-uk-housing-market-1952-2022.aspx

Move now or not at all. What's the point of moving when your boy is 16, in the middle of exams and off to university in a couple of years?

Could you extend? You say it's a detached house so is there any scope to extend and create an extra bedroom?

I know it's not what you asked and building work comes with many issues of it's own but I agree it's probably not a great time to buy but if you leave it much longer your eldest won't get any benefit and you'll be refereeing the fights!

I agree with this. A lot of the posts are saying very sensible things about house prices, but are ignoring the fact that there's a limited amount of time for the boys to reap the benefit of separate rooms before they may well move out.

If you chase the market down, it'll probably be 9 ish months before you start to look, and another 9 for the actual moving. Then your oldest is 15 at a minimum (possibly older depending on how the market goes), and has spent a good chunk of his teen years sharing - he'll have done half his GCSE years without a private study space.

There's nothing wrong with kids sharing a bedroom, but if you think a bigger house will significantly improve your children's quality of life and childhood it makes sense to move now - the property market is uncertain, but your children getting older is certain.

So, do we agree that it took 6 years for houses to bottom (on average) - and not 2 or 3 years?

Is there anything you can do to your current house to get the boys a bedroom each? Extension, loft conversion, use dining room as a bedroom...

If not I would say move now or not at all, given the age of your eldest.

Who mentioned 2 or 3 years?

You did!

"I would wait until early 2024 to put your house on the market. I would aim to move house in 2024 not leave it to 2025 or later, because at some point the housing market will slowly start to pick up again and once confidence returns, there will be pent up demand that will drive up prices."

...and

"I am old enough to remember when house prices fell in the early 90s and what I remember most is the way house prices shot up again afterwards. The house we bought close to the bottom of the market doubled in value in a few years, but all we knew at the time was that we were buying in a depressed market.

Hence my advice to Downton not to leave it too long to buy a bigger property. 2024 is a reasonable compromise given their personal circumstances and if they leave it until it is obvious that house prices are rising again, they will have left it too long to get a great deal."