Should we up sticks to reduce our expenditure? (bit long)

[princessosyth]

We have an income of around £40k and a mortgage of £170k dh also spends £500 commuting as you can imagine there is very little money left over.

We live in a very expensive area in a very small house. With household bills rising and all the gloom and doom surrounding the economy I am getting very nervous.

I am thinking that dh should look for a new job in a completely different area and we find an area with modest house prices. I have looked at Swindon (I know the area is not great but I have known worse) and with the equity in our house we could probably buy a modest 3 bed house (twice the size of what we have now) and have a mortgage of around £110k. Dh is not keen as he likes the area we live in and feels that ds would be disadvantaged if we moved. I am worried that we will not be able to keep a roof over our head soon and think we need to take drastic action.

What would you do in our situation?

TIA

Sorry if I don't reply straight away but I need to cook. Will log on later.

It depends how much you like the area you live in currently. I don't think moving simply to cut your mortgage is a great idea (although I might to cut a commute - £500 pm must mean he has some travelling to do). I don't know why you have plucked Swindon out of the hat, I think if you do decide to move then there should be bigger influences at play than property values in new area so, I suppose I am siding with your dh.

And remember it costs a bomb to move: 4% stamp duty, 1.5% sale commission, conveyancing fees on both transactions, moving company, getting everything plumbed in etc.

Could you not maybe temporarily go on interest only, until your income increases (don't know how old your los are, but are you planning to go back to work? It may just take the strain out for a while till things improve.

I don't think now is the time for your DH to leave a job for no good reason. Is there no way he can keep his job and you just move somewhere closer to work?

Or cut your commuting costs - if he currently gets the train, think of something else - car share etc. My DH often takes his motorbike to work - £7 petrol a day rather than £20 train fare. Time to think laterally!

is there anywhere you already have connections?
we're planning on relocating from London to the North West, for the reasons you describe - in fact we're in an almost identical financial position. we're only looking at the north-west as we both used to live there, and still have friends and family in the area.

we thought about the east midlands for a bit, a s my dream job was advertised in a really cheap area, but decided that knowing no-one at all was far too scary . but i guess most people are braver than us!

Princess, we have played through a similar scenario many many times...

The only thing that will reduce significantly is your mortgage. Council tax may drop slightly. But running a car, food bills, phone, tv, electric, gas, broadband, hobbies, activities, clothing all remains the same.
When you then take the reduction in wages into account(areas where housing is cheaper usually have lower wages too) and you are left with a similar situation to the one you have just left.

So I agree with whoever recommended 'thinking laterally'. Now is NOT a good time to change jobs. Stay put, but make changes to your day to day expenditure.

Hmm.. Tbh I am quite glad that none of the response are saying go for it which I suppose means that I don't really want to move. We do have family in Swindon. I really want to stay where we are but I can't see how we can afford to when dh spends so much on commuting. We can't really move closer to where he works because it is just as expensive as where we are at the moment. I think the solution is for dh to work more from home to reduce the commuting costs.

I am planning to start my own business shortly but won't really be earning much for the next few years. I have been looking for part time work but it is non existent although I have had a few offers of full time jobs n I am considering the freelance route which I can hopefully expand on when children are at school.

Thanks for the replies.

Hmm.. Tbh I am quite glad that none of the response are saying go for it which I suppose means that I don't really want to move. We do have family in Swindon. I really want to stay where we are but I can't see how we can afford to when dh spends so much on commuting. We can't really move closer to where he works because it is just as expensive as where we are at the moment. I think the solution is for dh to work more from home to reduce the commuting costs.

I am planning to start my own business shortly but won't really be earning much for the next few years. I have been looking for part time work but it is non existent although I have had a few offers of full time jobs n I am considering the freelance route which I can hopefully expand on when children are at school.

Thanks for the replies.

What about selling up where you are and renting 170k is a huge mortgage on a 40k salary considering the commuting costs.Then you could wait until you see how things pan out and buy again when property prices stabilise Or could you downsize?If you only have one child you could live in a smaller property in the good area

Unfortunately renting is really expensive, nothing under £1k per month. We also can't really downsize, we are in a 2 bed terrace which is worth about £280k and all the apartments around here are designed for commuter types and tend to go for around £400k. We are on an interest only mortgage we switched when I was on maternity leave and haven'nt been able to switch back. Reading that back I sound so negative don't I?

If dh could work from home a couple of days a week it would reduce his commuting costs by £200 a month. I think I am going to have to give up the idea of another baby, that way I can concentrate on getting back to work full time. It is a shame because ds would love a sibling and my feeling of wanting another child is very much there but I suppose it is just plain stupidity to even consider it isn't it?

Interest only is like renting though unless you are hoping for huge capital gains and have a really good savings plan in place to pay the equity off.Could you move a bit closer to his work?

My sympathies to you if you think you will have to stop dreaming of another child - it seems really harsh to even have to consider that at this stage - your finances may be a pile of poo now, but that won't last whereas not having another child is a permanant life-altering decision.

Is there no way you can earn some more money yourself? Can you work evenings locally if DH gets home on time? Or weekends? It may not be ideal at all, but 2 or 3 evening's work a week could make all the difference to your finances.

I'm going to go against the flow and say why not consider it, you don't have to make any definite decisions, but look into it.

Looking at your figures, you seem to have potential equity in your house of about £110,000. In Swindon or North Wiltshire (since that's the area you mentioned and you have family in that area), you could get a 3-bed terraced or semi-detached house in a decent area (not rough part of town or anything) for anything from £150-180k, depending on what exactly you went for. That's a huge saving in terms of mortgage.

Factor in a potential saving if your husband could get a local job, and that's a lot of money you wouldn't be spending.

So what I would do is start semi-seriously looking for jobs for your husband. Swindon and the surrounding area has massive potential for jobs in most business areas, and salary levels should allow him to get a similar wage to his current one.

At the same time, explore the potential for him to work from home more where you currently live, to cut commuting costs.

That way you're still keeping all options open. If a good job comes up, you'll be in a position to make an informed decision. If not, you've still tried and hopefully you might have cut your commuting costs where you are at the moment and that might just make life that bit easier and more manageable.

Looking at moving isn't committing you to doing so, it's only one option and why not consider it?

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