When your salary hits a certain level it is easy to think “well I’m the sort of person whose lifestyle should now look a certain way, and that should include x, y, z”.
In your case OP that includes living in Islington, which is horrifically expensive (which you can see in your mortgage and even more so in your childcare costs).
I expect it creeps in in other ways too - lots of lovely tempting restaurants and shops nearby. Also, you are surrounded by people (friends?) who are even wealthier than you, so you will see people taking advantage of those shops and restaurants, you will see all the houses worth multiples of your own, you will hear about the people who went skiing at half term and who popped over to the Caribbean in the Easter hols, and probably wonder how the hell it can be that £175k still isn’t enough to enjoy a lifestyle that you see all around you everyday.
The reality though is that you can afford bits of the lifestyle, but not all of it. You’ve gone for the expensive location but in consequence that isn’t leaving you much for the other stuff.
That might improve if/when childcare costs go down, but if you’re thinking that you’re also the sort of people whose children should go to a fee paying school, then I’m afraid you are going to feel stretched for a long time!
Just as a comparison, our household income is about £10k a month. We live in a part of East London we really like, but it is much, much cheaper and less fashionable than Islington is (and so the mortgage on our 4 bed is currently less than £2k p/m).
Our kids go to local state schools, and a fair bit of our income goes into pensions and doing up our house.
That leaves a healthy budget for holidays, and other fun stuff for the kids, but If we chose to live somewhere like Islington, or if we decided to spend money on school fees I think all that would quickly change.