Money News

Cost of a third bedroom is £60,000 (£163,270 in London)

Friday 11 November, 2011

By Martin Fagan

Couples contemplating a second child will have to fork out and average of £60,000 for a third bedroom, says HSBC.

The additional cost of housing a second child is £59,500, according to new research from HSBC.

This additional cost is based on the average three-bedroom property costing 38% more than a home with two bedrooms. The additional cost of a third bedroom represents 1.6 times the annual household income in the country.

HSBC surveyed 1,000 parents with two or more children to find out the changes they made to their lifestyles after becoming parents.

It found 60% of parents have moved house as a result of having their first or second child, with 35% moving from a two to a three- bedroom property, 11% from a one to a two- bed and 13% from a three to a four-bed.

The research reveals London as being the most expensive place to accommodate a second child in their own bedroom - the average cost of a third bedroom in the capital is £163,270, or 3.6 times the 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 there (£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 three-bedroom property costing 42% more than a two-bedroom home.

"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,” said Bruno Genovese, head of savings at HSBC.

“This research highlights the importance of saving to ensure you are able to cope financially with the cost implications of having a family."

Other costly measures taken by parents with two or more children include buying a larger car, while one in ten added an extension to their home, costing an average £21,256, and 6% undertook a loft conversion, with an average cost of £17,500.