FIF,
I'm not sure anyone does it as a hobby. Firstly, the investment to get into it is very high (need a fair bit of PPL instructing experience first, then have to have 70 hours P1 on MEPs which will frequently be self-funded, just for starters). Secondly, students invest very large amounts of money into the course, and are probably going to look for full-time commitment from an instructor so they can get best value for money.
For me, I knew I wanted to instruct, and got into full-time PPL instructing before I even had an IR. A year later I had an IR, and I was an unrestricted PPL/Night/IMC instructor. Then I decided to make the commitment to stay with instructing, and cashed in the last of my savings (actually the ISA which was supposed to pay off my interest-only mortgage, so it was quite a serious commitment) to start building up MEP hours until I had the experience to become an MEI.
I'm sure that's not the only way. As Erik says, you might try to get into one of the bigger schools right from the beginning and work your way up within a school, for example, but I can only relate my own experiences.
As for money, Erik is probably about right. I'd say you're looking at somewhere between £20k-£40k, with the big money found in the big integrated schools.
Hope that helps,
FFF
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