Property advice needed

[Mazza92]

Hi all,

We are looking to buy a new property (currently in a flat so need more space) but can’t decide between stretching to a potential forever home but at £1m/£1.1m or sticking to a smaller but more affordable but still high 800/900k house (London prices unfortunately)

We would like to avoid doing multiple house moves but the current high interest rates mean that for the higher house price, we would have a lot less disposable income.

We also have 2 young dc who are both in childcare so childcare costs are high

What would you do? What is everyone else doing? Stretching or working with lower budgets if you need to move?

Thanks in advance

8/900 house that you can extend/add value to gradually and turn into a forever home? So one that would do you for now but you could do a loft conversion in a few years etc?

Is the difference in price did you size or location?
I live in a London terrace and prices range from £900-1.3m depending if loft has been converted and standard. So I'd buy a cheaper house in a good area and extend as financing allows. I bought for £920k two years ago, already extended but very tired, spent £120k on it and it's worth about 1.2m now.
Or, not too far away the houses are about £100k cheaper as they are just a bit further from the tube and shops.

When you've run the numbers through the mortgage calculator, have you included the cost of childcare in that? Because we could borrow £150,000 less due to childcare.
The other advice is think really hard about what you want your monthly payments to actually look like. We're going for a lower mortgage this time around to ride out the interest rates with a view to overpaying the mortgage and building equity then making a better move once we don't have childcare to think about.

Thanks both for the prompt replies.

Same location so the difference is primarily size/finish. So 2000sqft property would be £1m whereas 1500-1700sqft would be 800/900k. I’m thinking that a loft extension and single storey extension would cost the same as buying a house that already has at least one of these?

Renovating is much more costly these days, especially in London, so it might actually work out cheaper to go for the bigger house. Plus you'd avoid all the stresses and strains of finding good builders / living on a building site.

I guess it really depends on your finances and lifestyle/family's needs. If I were choosing between a big mortgage and no future work, or an affordable fine house that can have value added in the future (not immediately because of labour/material crisis at the moment), I'd be tempted to do the latter, but it's so individual! If I had a really well paid job and could afford the house with no work needed and still enjoy life, maybe I'd do that- but I can't imagine being in that position! I'm buying somewhere lower in my budget range with a view to doing work in 5-10 years time :)

At the moment I wouldn’t be stretching, until interest rates and cost of living are more stable, unless I had a lot of disposable income even after the stretch. Just in case. I’d go for the slightly smaller option that you can grow into as hopefully the economic situation eases a bit in time.

Thanks all for the responses . It’s looking like 2k disposable after all the bills. It sounds ok but still needs to cover travel to work and lunches at work and some saving It probably wouldn’t stretch far in London. Sigh such a hard decision.

My DH thinks we should stretch for a few years to avoid builders etc

If you know your jobs are secure and you are healthy who knows the future! Go for the finished house.You can cut costs ie take lunch to work instead of buying out.Small things whilst you have childcare.Building work is very expensive,living with work going on and with children is not pleasant.Look at you budget and compromise until your children are in school.Goodluck.