Cost of having children ignored by homebuyers

Couples are failing to take into account a drop in income following the birth of a child, when buying a new home, a mortgage lender warned today.

According to The Woolwich, many people trade up the property ladder in preparation for starting a family, and are often looking for a home with extra bedrooms and a garden for children to play in.

But the research carried out for the group found that two fifths of homebuyers fail to consider a potential drop in their income once they have had children, when working out how much they can afford to borrow.

It revealed that 24% of people do not think about their long-term family plans when taking out a mortgage, while 18% said they do think about it, but are unlikely to take it into account.

This is despite the fact that around one woman in five gives up work when having children.

Andy Gray, head of mortgages at The Woolwich, said: "It is essential that people consider their long-term plans when taking out a mortgage.

"There is no doubt that children place additional financial pressures on couples, and struggling to pay the mortgage will only add to those worries.

"Many people buy a larger property in preparation for having children but ignore the crucial question of how they will pay for it if the household income is reduced."

People living in the north-east are the least likely to think about how raising children will have an impact on their income, with 34% saying it wouldn't cross their mind, and 20% saying they would think about it but wouldn't take it into account.

Those in the West Midlands are most likely to think about the financial consequences of having children, with just 15% of those questioned saying it wouldn't occur to them.