Would you move in this climate if you didn’t strictly have to?

[Movingdilemma6]

Long term poster but NCd in case outing. Sorry it’s long!

We are in the process of selling our comfortably affordable house and moving to more of a “stretch” forever home. However, we started the process before the US-Israel war on Iran when interest rates were looking much more favourable. The issue is that we’re fixed in our current mortgage until September, and can’t lock in a new rate until June, which is now also looking like our probable moving date. We therefore won’t know what our monthly payments will be on the new house until the point of moving, and they’ve already increased by £300 a month since when we reserved our house, which takes us to 36% of take home pay. (We are porting our current mortgage and have a top up product arranged for the rest until Sept- this is all ok and not the concern - it’s about the potential mortgage interest rate from September onwards).

The main reason for moving is having had a second DC, who needs to move into what is currently our office ASAP. DP and I will be working in the room DC needs to sleep in regularly (either daytime naps or overnight as DP works shifts). There’s no way to add another room (house already extended and garden too narrow for garden office) and we can’t work elsewhere due to kit and confidentiality. DCs can’t share long-term due to big age gap and different genders. There are other considerations for moving which would be resolved by new house (eg more bathrooms, parking, better secondary catchment) but the bedroom/office is the main challenge.

So, we don’t TECHNICALLY have to move. It would be awkward and annoying not to have the extra space and at least one member of the family would have disrupted sleep, but it could be juggled for a couple of years if absolutely necessary.

Our jobs are very secure and we have an emergency fund, but that will dwindle rapidly now we’re onto the unpaid period of parental leave, which adds to the anxiety of the situation.

Basically, it’s just terrible timing! Our current house sold immediately, so the process was much quicker than we expected (we thought it’d take a bit longer and then we’d have been closer to our fix being up). If we could have locked in an interest rate when we offered we’d have been fine. But now what felt like a bit of a stretch feels like a bit of a risk, especially with all other costs looking likely to increase too.

So, WWYD? Option A, pull out now and know that you’d be comfortable to weather any potential financial storms for the foreseeable? Downsides: losing sunk costs of solicitors, surveys etc and frustration of living in a house that you’ve outgrown.

Or: option B, continue with the move for now, in the hope that by June you can lock in a rate with a monthly payment you can afford and have the space that you need as a family long-term? I guess the back up plan would be to pull out just before exchange if the rates shoot up further. I would obviously feel awful for our buyers in that scenario and that would accrue further costs for us, but would ultimately save us from overstretching and ending up with a house we actually can’t afford.

Or is there an option C I’ve missed?! DP and I are going round in circles so would appreciate any thoughts!

Should add the ERC is paybable until June and is £7k, so not an option either.

I suppose it slightly depends on what that extra couple of years in the less convenient house is worth to you. I find it quite useful to try and put pricetags on things and work out if it is worth it to me! Two years of not great sleeping arrangements would have quite a big pricetag for me, for example. It would def be worth a few thousand to avoid that, but you can do your own calculations.
The only time I haven't sold and moved it's not been worth it in hindsight, because although I saved a bit, the extra couple of years in the wrong house, with the move ahead was not worth it really. Two years in your kids'' childhood is a big chunk of their childhood, so that would factor in too.
Plus who the hell knows what the next few years are going to bring? We may have spent a bit more than made sense, but it's worth it to be settled in a house we love.

In your shoes, I'd sell and rent whilst things pan out. I suspect property prices are only likely to go down in the next couple of years. IMO, it's the start of the long overdue market correction.

I agree with @flipfloplaugh. I'm currently working mum with a 1 yo and he goes through stages of poor sleep with a fair amount of crying and soothing needed. Trying to manage that in someone's work environment, while they are actively working, doesn't sound tenable.

We’re in a similar situation and have decided to move. The mortgage rate we’ve been offered is quite high, but ultimately the quality of life improvement will be significant.

Thanks @flipfloplaugh thats a good perspective and not one I’d really considered. I’d pay a lot for a good night’s sleep right now!!

@TheyGrewUp yes we could do that, but rentals in our town (and I suspect everywhere) have gone insane. A 3 bed semi to rent is currently the same payment per month as the 4 bed to buy….so I guess that strengthens the argument to keep buying it! Plus, the new build we’re buying has been heavily reduced as it’s one of the last to sell on the site. Didn’t want to make my OP too long but basically if we don’t buy this one now, we’re unlikely to get a 4 bed again.

@PyjamasForever thanks - good to know we’re not the only ones despite the market uncertainty! All the best for your move!