The OP is now a single income household, and is £400 in the red every month. Also they have just had a kid (big cash drain), so I can't imagine there will be much socialising in the near future. Think they may need to "move to the 'burbs"
If you move further out then expect to pay as much as 5000£ per year to commute.
Umm, that's pretty cheap for a commuting train pass in London! It's usually way more. Double that at least.