I am a single male in my mid twenties, based in the UK and looking to buy my first home. I see this home as a 'stepping stone' home and intend to live in it for 5-15 years until I get a partner and plan on having children and then upgrading to a better house.
I have a budget of around £180k for a house based on my deposit and what the bank would lend me as a mortgage. I feel now is a good time to buy due to a volatile housing market as well as low interest rates on mortgages.
I have seen some houses in a great area for around the £180k mark and I believe due to the area these would rise in value. I have also seen a slightly better specification house in a worse area for around £130k - which is significantly under my budget. This would mean I could buy the house and still have a lot of additional deposit left over as well as the monthly repayments being lower. With the surplus money I would consider 'overpaying the mortgage' in order to reduced the mortgage term and therefore build up more equity in the house. I am aware overpaying the mortgage sometimes comes with penalties and / or restrictions.
So my question is - is it worth going for the much cheaper house in order to build up more equity or should I go for the more expensive house in the hope that I would still build up equity and the house value would also increase more than the cheaper house? Or am I overlooking some major details?