Hi,
I sympathise with your situation, and finding a way forward would be for you and your husband to work out, but I just wanted to add a couple of points.
TOCs usually require new employees to live within 45 or 60 minutes commute of depot, and this is complained about by many potential applicants on these forums. But TOCs require it for a reason. Commuting is tiring, especially when you drive all day. My commute to work is an hour, and I would not want my commute to be any longer than that. The longer your commute, the higher your fatigue index (ie, the sooner during your shift you are likely to get fatigued). Fatigue is a huge issue on the railway, and a huge proportion of incidents are caused by fatigue (driving is very repetetive!). Sometimes we only have 12 hours between booking off of one shift and booking on for our next shift. When you consider the commute, eating dinner and breakfast, preparing for bed and preparing for work, there's very little time there for sleeping! Some people do have long commutes and they appear to manage their fatigue. Personally, I find 1 hour in each direction more than enough for me, and I would certainly not be moving further away from work.
Another thing which I have picked up on as a possibility, which hasn't been mentioned, is your husband's safety record. Reading between the lines, I'm wondering if your husband has had a few incidents as it seems like he is extremely concerned about having one. Certainly, if he has several incidents on his record (and can't afford (m)any more), I can see why he is so keen to protect his record, and therefore his job.
I agree with your husband that commuting by car sounds unworkable. Bearing in mind the night trains, commuting by train it doesn't sound ideal, but if it means he can spend more time with family, could be worth talking through. I understand him not wanting to transfer to Reading if he's got a few incidents on his record. If the reason he doesn't want to transfer to Reading is harder (but not riskier) work, then I would think living with family and saving money on a second home might possibly balance it out.
I do sympathise with your situation, but I just got the feeling that you didn't understand the effect fatigue can have, so I hope that this is helpful.