buying tiny place with small mortgage

SmashedAvacado

In a rising property market, which until the last 12 months, we have seen for the last 20 years, then buying the most expensive place possible has been the smartest move to long term financial freedom. In 2001, if you had 40k to put down on a property, you would use it as a 5% deposit (or perhaps 0% deposit which was possible back then) on a place worth 800k. In the next 10 years, the place would be worth 1.6m and you woudl have made 800k and have your 40k back. That would have given you plenty of freedom.

Extreme example, and one which doesnt stand scrutiny - but for many is more or less that they did - but certainly doesnt follow the hypothesis that spending the least is the way to financial freedom.

Those conditions probably dont exist at the moment, but being as conservative as possible might not be the way to achieve your aim.

Finchy2018

It you really wanted small space living and less financial commitment you could look at buying a boat. We lived on a 45ft narrowboat for 2 years, my husband myself and our cat. It was cramped. but our neighbours had a longer boat and they lived with their 2 children. theirs had 2 bedrooms.

We probably paid about half in terms of bills over an average year including our mooring fee compared to what we pay renting a 1 bed.

Crashy_Time

SmashedAvacado wrote: »

In a rising property market, which until the last 12 months, we have seen for the last 20 years, then buying the most expensive place possible has been the smartest move to long term financial freedom. In 2001, if you had 40k to put down on a property, you would use it as a 5% deposit (or perhaps 0% deposit which was possible back then) on a place worth 800k. In the next 10 years, the place would be worth 1.6m and you woudl have made 800k and have your 40k back. That would have given you plenty of freedom.

Extreme example, and one which doesnt stand scrutiny - but for many is more or less that they did - but certainly doesnt follow the hypothesis that spending the least is the way to financial freedom.

Those conditions probably dont exist at the moment, but being as conservative as possible might not be the way to achieve your aim.

Depends when you try to sell, paper wealth means nothing without a buyer, and there are parts of the UK where prices are still where they were in 2007/8. Very few of the people buying in the years you mention were making an informed choice IMO, they were just following the herd, and no one really could have predicted the extent of the central banks attempts to get us out of the debt mess with money printing after 2008 :eek: This may have prevented total collapse, but long term has caused even more problems (political and social) However with the US Fed being very clear that they want to continue raising rates, and the political/economic problems associated with Brexit and the EU in general becoming more pronounced being anything but conservative now could be the worst decision you ever make.

SmashedAvacado

Crashy_Time wrote: »

Depends when you try to sell, paper wealth means nothing without a buyer, and there are parts of the UK where prices are still where they were in 2007/8. Very few of the people buying in the years you mention were making an informed choice IMO, they were just following the herd, and no one really could have predicted the extent of the central banks attempts to get us out of the debt mess with money printing after 2008 :eek: This may have prevented total collapse, but long term has caused even more problems (political and social) However with the US Fed being very clear that they want to continue raising rates, and the political/economic problems associated with Brexit and the EU in general becoming more pronounced being anything but conservative now could be the worst decision you ever make.

all i was saying is that the conservative approach doesnt necessarily put you in the best position. if you read my post, you'll see that i acknowledged that there was an element of generalisation. Reality is though that many people made buckets of money and typically those with greater leverage made more

cherryblossomzel

I disagree with many and actually don't subscribe to the view of buying the biggest you can afford. The space you live in is personal to you, and only you can really know what you need/want. I choose to live in a smaller flat even though I could quite comfortably afford something bigger, that's just what I like.

That said, if I had a child I wouldn't consider anything smaller than a 2 bed. Consider renting a one bed for a while and see how you get on before buying.

korvin

DanielleJH wrote: »

You should watch the documentary on Minimalism on Netflix, or read the numerous books available on the subject OP. It changes your way of thinking about it all. We're currently looking at buying our first home and aren't looking to go too big (family of 5) as I think people tend to fill whatever space they have. If we don't have the space, we can't buy all the !!!!.

I would still definitely only have a minimum of 2 beds in your situation though!!

that is exactly my thoughts....I watched that documentary and thought how I already live like that. I don't want extra space to buy stuff. I don't want to buy stuff. I want to have more money for holidays and experiences. Just wanted to ask a question on this forum and see if there are any likeminded people. but the reactions really surprised me.
Thank you all who suggested 2-bed, it did make me think in that direction.

Niv

korvin wrote: »

that is exactly my thoughts....I watched that documentary and thought how I already live like that. I don't want extra space to buy stuff. I don't want to buy stuff. I want to have more money for holidays and experiences. Just wanted to ask a question on this forum and see if there are any likeminded people. but the reactions really surprised me.
Thank you all who suggested 2-bed, it did make me think in that direction.

I think if you started out suggesting a 2 bed you would not of had the reaction you did.

korvin

cherryblossomzel wrote: »

I disagree with many and actually don't subscribe to the view of buying the biggest you can afford. The space you live in is personal to you, and only you can really know what you need/want. I choose to live in a smaller flat even though I could quite comfortably afford something bigger, that's just what I like.

That said, if I had a child I wouldn't consider anything smaller than a 2 bed. Consider renting a one bed for a while and see how you get on before buying.

Thank you. We lived in a really tiny place when unil our kid was 2, now we are renting a 2-bed house. yes, it would be hard to go back to a 1-bed, but we want to move closer to my husband's work and that area is more pricy.
We can afford bigger mortgage and a house of £250k, but I just don't feel right about it.

[Deleted User]

korvin wrote: »

that is exactly my thoughts....I watched that documentary and thought how I already live like that. I don't want extra space to buy stuff. I don't want to buy stuff. I want to have more money for holidays and experiences. Just wanted to ask a question on this forum and see if there are any likeminded people. but the reactions really surprised me.
Thank you all who suggested 2-bed, it did make me think in that direction.

You are going against the grain of what most people want (i.e. big houses) and so most people will not understand your thinking (for example the person who thought your post was a wind-up). Think about lottery winners. The first thing most people do is to buy a massive new house.

We think the same as you. We are currently in a small two-bed, but are looking to downsize to a small one bed. We own very little stuff and would rather spend money on experiences and meals out with friends than furniture and heating bills and cleaning extra rooms just to store 'stuff'. Many people want the biggest house they can afford, but not everyone. When we tell people we are down-sizing they think we are mad and cannot understand why we want to move to a smaller place.

For inspiration look at 'Living Big In A Tiny House' on YouTube. You can also internet search for living in small apartments to find out examples of how other people live. To find like-minded people look for other minimalism, small living and frugality forums.

cherryblossomzel

korvin wrote: »

t Just wanted to ask a question on this forum and see if there are any likeminded people.

There are a few of us, but I think people who don't have that mindset (and just before anyone jumps on me: I am definitely not criticising those who think differently to me, just stating that we don't all want the same things), won't even understand the question you're asking.

I think some on the old style thread might get it.