Extra bedroom 'costs £115,000'

People in England and Wales looking to trade up from a two-bedroom terraced house to a three-bedroom semi-detached home can expect to pay an average of £34,000 more than their current home is worth, according to Yorkshire Bank.

But the figure varies hugely across the country, with people in Manchester only having to find an extra £7,000 to get more space, while those in London can expect to need to increase their mortgage by just under £115,000.

But despite the huge costs involved, only one in four people said they would let current house prices put them off buying somewhere bigger to make room for a growing family.

At the same time, only 14% of homeowners expressed concern that they might struggle financially if their mortgage repayments increased by around £40 to £50 a month.

Just 3% of those questioned said they would let the extra expense of a child or the potential drop to one salary put them off starting a family or having another child altogether.

Gary Lumby, Yorkshire Bank's head of retail, said: "If people are thinking of starting or growing their family, it could mean a drop to one income, so considering a discounted rate mortgage or one that allows payment holidays could be a sensible option.

"It's crucial not to over-stretch yourself financially and the step up to a bigger home can be a big jump in price depending on where you live."

The research also found that 78% of homeowners expect interest rates to continue to increase, although only 3% think house prices will fall during the coming 12 months.

:: BMRB questioned 2,000 people during June.