HSBC

HSBC

November 11, 2011 07:46 ET

Cost of Housing a Second Child is GBP 60,000

- Cost of a third bedroom is 1.6 times income in UK

- London is least affordable place to have baby number two

- Yorkshire is most affordable - costing 5 times less than the Capital

LONDON, UNITED KINGDOM--(Marketwire - Nov. 11, 2011) - New research from HSBC reveals 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.

Table 1: Cost of 3rd bedroom vs. income by region
Cost
of 3rd
bedroom
Gross
household
income
Cost vs. income
London £163,270 £45,864 3.6
South East £75,048 £42,484 1.8
East Midlands £47,812 £31,096 1.5
North East £43,529 £29,380 1.5
East £53,848 £37,544 1.4
North West £42,643 £31,148 1.4
West Midlands £46,346 £32,552 1.4
Scotland £45,357 £33,436 1.4
Wales £45,481 £31,772 1.4
Yorkshire £31,467 £32,500 1.0
Great Britain £59,480 £36,556 1.6
Table 2:% increase in house price for a 3rd bedroom by region
2 bedroom 3 bedroom £ bedroom % difference
East Midlands £114,524 £162,336 £47,812 41.7%
North East £105,344 £148,873 £43,529 41.3%
Scotland £112,495 £157,852 £45,357 40.3%
London £405,782 £569,052 £163,270 40.2%
East £138,595 £192,443 £53,848 38.9%
South East £199,610 £274,658 £75,048 37.6%
Wales £124,937 £170,417 £45,481 36.4%
West Midlands £129,044 £175,390 £46,346 35.9%
North West £125,699 £168,342 £42,643 33.9%
Yorkshire £113,886 £145,353 £31,467 27.6%
Great Britain £156,992 £216,472 £59,480 37.9%
Table 3: Top 10 most expensive counties for a third bedroom
2 bedroom 3 bedroom £ bedroom
London £405,782 £569,052 £163,270
Hertfordshire £224,330 £335,101 £110,771
Windsor & Maidenhead £298,676 £401,071 £102,395
Surrey £250,832 £352,806 £101,974
Rutland £124,844 £223,701 £98,857
Edinburgh £173,086 £262,685 £89,599
Dorset £188,648 £277,551 £88,903
Berkshire £241,334 £327,003 £85,669
Hampshire £183,621 £267,459 £83,838
Herefordshire £149,429 £230,099 £80,670
Table 4: Top 10 least expensive counties for a third bedroom
2 bedroom 3 bedroom £ bedroom
Swansea £155,252 £163,399 £8,147
Orkney £140,600 £152,500 £11,900
North East Lincolnshire £114,410 £130,165 £15,755
Rhondda Cynon Taff £88,967 £105,185 £16,218
Bridgend £134,155 £155,212 £21,057
Neath Port Talbot £92,355 £114,171 £21,816
Western Isles £98,900 £121,227 £22,327
Aberdeenshire £199,841 £226,888 £27,047
Merseyside £112,968 £141,205 £28,237
Pembrokeshire £165,051 £193,752 £28,701

A copy of this release can be found at www.hsbc.co.uk/newsroom

Notes to editors:

Consumer research based on survey carried out by Opinion Matters on behalf of HSBC among a sample of 1,000 parents with at least 2 children in October
House prices taken from Zoopla.co.uk on 24th October 2011
Household income taken from ONS

Loft conversion - £17,500 http://www.loftshop.co.uk/help.asp

Home extension - £21,246 http://www.whatprice.co.uk/building/home-extension.html

Car (http://www.ford.co.uk/Cars)

HSBC Bank plc: HSBC serves 16.1 million customers in the UK and employs approximately 52,000 people. In the UK, HSBC offers a complete range of personal, premier and private banking services including bank accounts and mortgages. It also provides commercial banking for small to media businesses and corporate and institutional banking services. HSBC Bank plc is a wholly owned subsidiary of HSBC Holdings plc.

The HSBC Group: HSBC Holdings plc, the parent company of the HSBC Group, is headquartered in London. The Group serves customers worldwide from around 7,500 offices in 87 countries and territories in Europe, the Asia-Pacific region, the Americas, the Middle East and Africa. With assets of US$2,455bn at 31 December 2010.

This press release is only being issued in digital form. Please save paper and think before you print.

Contact Information