Cost of housing a second child is £60,000
New research from HSBC reveals additional the additional cost of housing a second child in the UK is £59,500, with the average 3 bedroom property costing 38% more than a home with 2 bedrooms. The additional cost of a third bedroom represents 1.6 times annual household income in the country.
HSBC surveyed 1,000 parents with two children or more to find out the changes they made to their lifestyles after having children. Sixty per cent of parents have moved house as a result of having their first or second child, with 35% moving from a 2 to a 3 bedroom property, 11% from a 1 to a 2 bed and 13% from a 3 to a 4 bed.
Bruno Genovese, Head of Savings at HSBC comments "There are certainly many considerations to take when planning for your first child; however the second child seems to be catalyst for many families moving to a larger home which is often the largest financial outlay they will ever undertake. This research highlights the importance of saving to ensure you are able to cope financially with the cost implications of having a family."
Not surprisingly, the research reveals that London is the most expensive place to house a second child; the average cost of a third bedroom in the Capital is £163,270 or 3.6 times gross annual household income. This is five times the cost in Yorkshire which is the most affordable place to have a second child; the additional price of a third bedroom (£31,467) is almost equal to household income in the region (£32,500). In terms of the percentage increase in property price, the East Midlands is the most expensive region in which to upsize, with the average 3 bedroom property costing 42% more than a 2 bedroom home.
London and other Southern counties including Hertfordshire, Berkshire and Surrey are the most expensive places to house a second child with the cost of a third bedroom topping £100,000 in each of these places. In comparison Scottish and Welsh counties dominate the most affordable places to move up a bedroom - with the cost of a third bedroom in Swansea just £8,000.
Other costly measures taken by parents with two children or more include buying a larger car, more than half (51%) of parents did this, potentially costing them an additional £17,150. The difference in price for a new Ford Fiesta compared to the more family friendly Ford Focus is £6,000 or up to the even larger Ford Galaxy is £17,150. One in ten (10%) added an extension to their home, costing an average £21,256 and six per cent undertook a loft conversion, with an average cost of £17,500.