Should we downsize to bet against Cost of Living?

SavingPennies_2

CMB93 said:

Thanks @lookstraightahead. 

To answer a couple of your points to see if they change any of your suggested talking points.

The extra money would go on value of life spending, i.e. being able to do have a good social life, paying for extra classes for the kids in a couple of years. Might not be deemed essential to everyone but will indeed make life happier. 

Yes - both houses could be for long term, although current house perhaps more so with more options to extend if needed. 

We have taken cost of selling and buying into consideration, and if both go for what we expect we'd expected to be able to pay off the £108k sub-account of the mortgage after all fees and still have a small chunk of cash. 

Current house really is in the most desirable street in the town we're in - but one of the smaller houses. It's not a new build estate that will go through a desirable period, it's all old period properties that rarely become available. It's right next to the main park, no overlooking houses front or back, no chance of development front or back etc. I am confident it will stay as the most desirable street in the town for a long time to come. We've had people express interest in buying without the house being on market. 

Is it not likely the time/ desire and therefore spending on a "good social life" will go down for the next few years when the baby arrives? It sounds like you already have a great house where you are. Personally I would stay put: the hassle, expense of moving, and potential downgrade of a house/ location would not be worth having extra disposable income for, and that should increase anyway in the future if you earn more which presumably you will. I certainly wouldn't be making such a drastic change just based on the current economy.

comeandgo

A lot of your social life now will revolve around your house, people coming for drinks or barbecue as you will realise going out when you have baby or small children is a mammoth task.

housebuyer143

As someone who just upsized after having a child, you will regret not having the space. 
I personally choose a bigger house and less disposal income. You will be surprised how much you value the space when you have more people in the property.

Give it two or three years and see if you feel the same about downsizing after your child is grown and maybe you have another 

[Deleted User]

housebuyer143 said:

As someone who just upsized after having a child, you will regret not having the space. 
I personally choose a bigger house and less disposal income. You will be surprised how much you value the space when you have more people in the property.

Give it two or three years and see if you feel the same about downsizing after your child is grown and maybe you have another 

I would agree with this. We've moved a few times since having children and really debated our upsize that we made last year and whether it was necessary or if we should have lower outgoings etc.

Only in hindsight I can now see how many things were a lot harder in a smaller property with 4 people in it. More so as those little people get larger! I've found things like 'moving around' space is something I really underestimated. I was looking at amount of bedrooms etc etc but things like good hallway space and a decent sized landing makes life (and school runs!) so much easier its untrue. I often found these cramped busy spaces were the places we'd end up having little arguments and the stress levels would be going up because everyone was tripping over each other. And storage space in a bigger property is invaluable.

When they were smaller my priority was a lot more on downstairs space, somewhere I could see them playing whilst I was cooking dinner or a little space to act as a make shift playroom. As mine are now teens I'm realising that bedroom space is actually important. That's where they spend most of their time and less with us downstairs (sadly!). And also having enough toilets in the house! Hugely makes family life easier.

We could absolutely have a smaller house and less bills and long term once the kids have left home I'm sure we will do, but at this point in their lives I can honestly say our quality of life is a lot better in the house we are in. We can all have our own space and also have brilliant communal space that works for us.

It's hard to know exactly what you need until your family is there and I've done the same exercise as you in theory thinking 'this would make so much sense' but it can be different to that in real life.

movilogo

House purchase is a long term proposition. There will be ups & downs in economy - you can't just swap houses every time. 

lookstraightahead

Sounds to me that you just want some money to spend, so it's not essential but for extras. So, if that were me, I would stay put, and find other ways of increasing your income/having more to spend, or cheaper ways of doing almost the same thing (was thinking kids classes - I remember paying for private gymnastics lessons for DD until I couldn't afford it and she went to a local club instead and made life long friends for a few pence a week).

michelle09

Also, at this point you say your house is worth X but does that mean you'll get someone offering? I have a family member trying to sell, their buyer pulled out due to increasing mortgages and their estate agents have said that they had 5 viewings booked in last Saturday. Across all their properties. Three cancelled.

This won't apply everywhere but I wouldn't bank on a house being worth any amount unless you have a cash buyer desperate for it.

RM_2013

Your current house sounds like somewhere you can stay for a long time, plus youve said it’s a good area and scope for improvement.  Honestly if you’re downsizing for a purely money saving exercise I think you might regret it in the future.
as long as you can comfortably afford the house you’re in now then I’d be tempted to stay put 

london21

CMB93 said:

Just looking for your thoughts on our current predicament! 

My husband and I have a house worth around £370k, with £238k mortgaged. 

We've seen a property that we love, same amount of living space and number of bedrooms, but the bedrooms are smaller, for £250k in the next village over. 

Would you think it sensible to downsize in the current market, with our first child on the way, to be able to reduce our mortgage borrowing by £108k, have a LTV of 52% and able to port our 1.59% mortgage deal for the next three years. 

If we stay where we are and the mortgage products stay the same as they are just now, we'd be able to pay our mortgage and bills when our fixed rate is up, but with much less disposable income (i.e. an extra £800 p/m) with less money left for life. If we move to the smaller property, we'd be able to ride out the interest rates better (and it's much more energy efficient). However, current home is in a very high demand area, so any value increase over time will be much more here than the new house. 

I know there's no right answer - but I can see so many pros and cons to both arguments I'm just wondering what people with an outside perspective might think?

Do not rush into anything.

is there a reason why it is a lot cheaper, sometimes properties are listed lower to gain interest does not necessarily mean will go for that amount.

Also the disruption of moving, the stress and costs as well.

Woolsery

The economy will do what it will do and it seems few ordinary people's lives will be 'comfortable' in the near future. If you can afford your superior house stay put, unless and until your fortune changes for the worse. It's very likely the price differential between your house and other properties in less desirable places will still be there if you really  need to call upon it.