Planning to start family, should we stay in current home (small) or move before kids arrive?

Rosestar123

Hello,
Long time lurker, do be easy on me! I feel I am overthinking this (!)

My partner and I (27 & 28) currently live in Walderslade, Medway. We were FTBs in May 2018. At the moment, we have a low mortgage £560pm at 2.19%.
We bought the house under our max budget, we were keen not to outstretch ourselves and wanted somewhere could add equity too. Due to the low mortgage, we are able to save £1.5k a month currently (after bills, fun things, etc paid). Bought for £170k - houses on street with the same layout have sold between £185-197K over the last 2 years. 

It is an end of terrace, 2 allocated parking spaces to the side of the house, big garden, 2 bedrooms but a very small living space. Our downstairs is one open plan rectangle, which is our kitchen, dining, living and my home office (homeworker due to COVID). So I am feeling very squished! Which hasn't helped from working from home the last year and being in the same room. And its only me, my OH and dog living here. 

We are planning on getting married in August 21 (fingers crossed) and then plans to start a family shortly after. 
For context, we are both public sector workers, and no large pay increases on the horizon! I am the main earner, which will have an impact on our take-home pay when I do go on mat leave.
We are paying for the wedding ourselves and currently paying off all our credit cards so come August we will be married and have no wedding or credit card debt! We will then begin the house saving in earnest. 

The question we have been toying with, should we stay where we are and have kids here and move in 2/3 years.
Or move next year to somewhere bigger prior to kids.

OH feels it's better to stay where we are, save as much as we can (due to low mortgage v. income), and says move after we have 1st child. That way we can move to forever home and I not turn around a few years later and want to move again to somewhere bigger (which he has a fair point). He thinks that a lower mortgage means when I go on mat leave I can be off for longer as we'd have smaller overheads etc.

However, I feel the space is too small for a family, worried that we will feel on top of each other and that if we spend the next 2 years saving, by the time we do move we will have been outpriced to what we want. Is it worth to have ££ sitting in the bank when it could be best put to use invested in property? If we were going to move, the mortgage advisor says that we'd roughly be lent a max £335,000. We'd need to add a deposit on top which we'd get from equity and savings. But that's looking at mortgage payments circa £1,200. 
Ideally would like a 4-bed detached house, garden, and family living space. So I'm worried that getting what I wanted for our current budget is pushing it and if house prices rise even more we will have to go for somewhere smaller. 

Thank you! Appreciate any thoughts. 

Picture below of floorplan of the current house.

MFWannabe

Personally I would say stay where you are; overpay on your current mortgage to get your ltv down and therefore build more equity. Also build up your savings 

If you move now you’re doubling your mortgage and then you’re going to go on maternity leave; would you still be able to comfortably pay the mortgage? Plus when you go back to work you’ll have childcare fees to pay? 

Currently you could use the spare room as home office if you wished instead of feeling you’re stuck in one room 

tacpot12

I think your husband is right that with your current mortgage you could be off work longer than with a mortgage that is double the size, but do you need to be off longer? Or can you afford to be off work long enough with the higher mortgage, even after you have put down your savings as deposit? I think you need to do some calculations to see much money you need to save to be off for the length of your maternity pay (plus any extra time you both agree is needed), and overpay the mortgage once you have saved enough money. If you can overpay the mortgage by £600/month, you know you can afford a mortgage of £1200/month. 

I do sympathise with the dilemma you have: you need money in the bank so you can stop working, but you also need to be able to put down more of a deposit on any new property. It's not easy unless both of you are earning well. You will save money by only moving the once, if you are able to do so; so you should be looking to buy a property that will be big enough for the family you want. It is not worth you having money in the bank whilst also paying a mortgage, except that you need some money to cover for your maternity leave.

I think your husband needs reassuring that you can take enough time off when your first baby arrives. He may be nervous about the changes that having a new baby will cause, and wants to know that you won't have to go back to work before he is ready to cope! It might make sense to discuss how you will manage your responsibilities as parents when you need to return to work, so that he can see that it will be do-able. He might need a bit of pushing to accept a fair division of responsibilities,  but it would be wise to get him onboard with the realities of parenthood sooner rather than later. Ideally parenthood should be a shared choice, taken in the knowledge that the commitment is irrevocable. It is reasonable for you to be nervous about it too, so try to discuss the topic in a way that let's him know that it is ok to be concerned. It's also reasonable for you to want to discuss it, so that you can come to a joint decision, so you can form a plan.

I don't think that you are overthinking it, but you might be wanting to move quicker than your husband can at the moment. A little time spent understanding his concerns, whether they be valid or not, will not hurt and might help a lot. 

Best wishes, I'm sure you'll get where you want to be. 

HampshireH

Having bought a small 2 bed a few years ago as FTB and then started a family and coupled with the wfh scenario. 

We are those people who need more space. Baby came along and due to lockdown mum and baby have effectively been stuck in one room so working from home can take place in the lounge with the dog (who also needs floor space)

We are adding a single storey extension to be a dining/work space/play area as we have found the lack of space downstairs with the baby hard and will only get worse.

We bought with the same idea and it would have been fine if working from home didn't appear to be the new norm for both of us.

Moving isn't the most affordable option for us for a few years.

With this in the mix I would suggest moving to the bigger space. A baby is noisy and the other person will no be able to work from the same room and concentrate  when it happens.

Emmia

Feasibly, by the time you've married and got pregnant (are you planning to start trying immediately after the wedding?) It will be mid 2022 at the earliest before you're on mat leave - as you're public sector workers are you going to be going back into the office / work from this summer - I'm a civil servant, and my dept. is clear we will be going back June/July and we will be expected to attend the office at least some of the time. No one will be able to wfh 100% (frankly I can't wait, as I hate wfh).  As that might help with the space pressure you feel now.

I think you really need to look at the longer term costs - childcare is expensive which will affect the long term affordability of the bigger mortgage if you move. 

Would you both be working full time once your mat leave is over, Or would one of you go part time to look after the little one some of the week? - that too will affect your income and mortgage affordability. 

kasqueak

We were in a similar ‘dilemma’ to you a few years ago. We lived in a 2 bed flat and would have liked to have moved to a house before having a family but house prices where I live are so high we made the decision to stay put initially as the flat mortgage was affordable. Especially as I didn’t return to work after maternity leave as I plan to be a stay at home mum until my little one goes to school. 

So you do need to consider affordability and what your plans are re returning to work after mat leave. 

We did end up moving when my little one was 3years old. Main reason being my flat didn’t have a garden and we longed
for outside space. I still live in a small house and would love more space but we just couldn’t afford any bigger so plan to stay here for probably 5-10 years and extend it. 

Working from home has made a lot of us realise we don’t have space. It’s the same at my place as OH works from home in the bedroom. Most people would love a home office but I think for most people we have to ‘make do’ as possibly all this WFH is only temporary. 

If I were you I would stay where you are for now. Over pay the mortgage to bring down your loan to value amount. This will put you in a stronger position to buy in the future when hopefully all is cleared. Good luck!

sammyjammy

Another vote for stay where you are, can you extend your current house at all?  Don't forget it doesn't matter how long you wait from a house prices point of view as if house prices go up yours will too.  Once you've paid for wedding and paid your debt off I would use 50% to squirrel some Mat leave savings and throw the rest at overpaying the mortgage if you're able.

FreeBear

MFWannabe said: Currently you could use the spare room as home office if you wished instead of feeling you’re stuck in one room 

With a large garden, the alternative is to build an office (shed). Well insulated, it would help to separate work from home life.

GDB2222

FreeBear said:

MFWannabe said: Currently you could use the spare room as home office if you wished instead of feeling you’re stuck in one room 

With a large garden, the alternative is to build an office (shed). Well insulated, it would help to separate work from home life.

You could even free up space indoors by building a kennel for the dog.

youth_leader

Do cost in childcare costs if you are planning to have more than one child.  In 1998 we had to find £900 per month for a six month period as the two year gap with our children meant both childminder and nursery fees.   We hadn't budgeted properly for it.  We got behind with the mortgage for two months and had to sell my jewellery at a loss to get some instant cash.

Rosestar123

Hi thank you for your thoughts. I do need to factor in potential childcare costs (which seem crippling!). Perhaps as mentioned an in-between house 3 bed with room to extend. But in the meantime start to over pay mortgage!