Downsizing Dilemma

jetman_2

I am currently living in a 1 bedroomed city centre apartment which I managed to buy just before house prices went crazy. Living in a city centre means that every facility imaginable is within 5-10 mins walk, including work.

The only problem is that I am in a low paid job and have overstretched myself financially. Not trying to give a sob story, but basically I have no life :-)

I have just seen a very small studio flat for sale in a quiet suburb. With the profit I have made from my current larger flat, I would have to get a mortgage of only £21,000 to buy the studio flat.

If I went for the studio flat I would certainly have an easy life, plenty of cash, and could possibly even by the flat outright in as little as 10 years.

Is the idea of 'downsizing' unwise from a longterm term financial viewpoint? I am 33 yrs old. Maybe I should stop being so lazy and get a better job?

Cheers

mando_2

Very much depends on what you want from life and your house.

When we bought this house, we thought we wanted to have money and be near to facilities as we did at the time live 40 mins away from the town and it was a hike to go out, so we bought a house in the town near to facilities. But I now hate the house and area. We have a good transport system, shops, pubs etc, but we make no use of them as we have realised we prefer to have a quiet life and stay in most of the time.

Now we are thinking of overstretching ourselves so that we can get the house of our dreams, somewhere further out of town.

You need to weigh up all the cons and pros of each house. Do you like being able to only walk 5 mins to walk? Will you miss having everthing on your doorstep - even if you don't make use of all of them? If you move will you need to spend more on transport/car? If you have more money after moving, are there places around the new area you could go, or would you need to travel?

Sit down and really think about both options and work out the costs. Your mortgage may have a tie in period, which you will have to pay to get out of. Look at what mortgages are for the new property so you can compare monthly costs including council tax, mortgage, insurance.

Once last thing, have you thought of just re-mortgaging? You may be able to get a better deal than you are currently on, which may save you money each month and saves all the hassle of moving.

Hope this helps.

frugal_dougal_3

This is a slightly different take on your problem, but having read your signature regarding a little one on the way, a studio flat might add to your stress levels even further.
Babies are only tiny but they have so much equipment to house, and your present flat might be a bit bigger even if it only has one bedroom.

Apologies if I am just pointing out the obvious but it is so easy to swap one set of problems for another without solving anything. Maybe the way to go for the time being is to try and save or earn some extra cash.

zzzLazyDaisy

Have you considered buying a small terraced house? They can sometimes be quite competetive in the suburbs, compared to city centre apartments, and it would give you room. Also, depending on your circumstances, if you have a spare bedroom you might be able to take a lodger to help with the mortgage?

m00nie

some of the signatures were all mixed up on the swap of the forums, alot of people havent even noticed them so maybe they havent a baby on the way else i guess they would have commented on that in the original post

jetman_2

Eh, just noticed the 'baby on the way' thing - first time I knew about it (never noticed the signature before)!? Thanks all the ideas, will probably end up going for a remortgage of my current property, as I am sure I will soon grow sick of living in a shoebox.

frugal_dougal_3

jetman wrote:

Eh, just noticed the 'baby on the way' thing - first time I knew about it (never noticed the signature before)!? Thanks all the ideas, will probably end up going for a remortgage of my current property, as I am sure I will soon grow sick of living in a shoebox.

Apologies !!!!!


I hope I didn't cause you to break out into a cold sweat !

Poppy9

Jetman

I see from another of your posts that your mortgage repayment are a little over £300. If you are unsure about moving have you considered renting out your flat for 6 months and you renting in another area. This would give you a chance to see if you like living out of town. I would have thought you could get more than £300 per month rent for your city flat. Have a look and see what the going rate is for renting in the City Centre. If house prices have gone silly you might get double your mortgage back in rent.

Also if you do get a better paid job and want to move up the property ladder I would have thought your city centre flat would increase/hold its value better.

Spendless

I take it your single?

What if you were to acquire a partner and baby over the next few years?

What if the market went back to how it was before, where FTB leapfrogged over the first rung of the ladder to buy a bigger property, leaving the bottom end of the market flooded, unable to sell and in some cases in negative equity.

I speak from experience. I bought a small 2 bed MTH as a single person (first step of ladder round here). Within a year i was in negative equity. A few years later i met my husband and had a baby and the place was too small and we couldn't sell.

In my case it had a happy ending we rented my place out, bought a bigger house in husbands name cheap (cos before property boom) and when tenants moved out property boom had happened so we sold my old house for a profit.

I was very lucky.

jetman_2

Thanks for all the ideas - I have decided to stay put and continue with the frugal lifestyle for the time being. I think the studio flat would sort my financial problems only for a temporary period only. These properties don't keep up with the rest of the housing market, mainly because they are located in a very quiet suburb with limited facilities and substanital commuting times. My main concern is I could become stuck there!