Compared to much of the rest of the world, living in the UK can be expensive. Many of your regular monthly costs (rent, food, entertainment) will generally go up if you live in a big city. The cost of living in London represents the biggest price tag of all. HomeViews collects reviews from verified residents in new developments across London and the UK – cost is always a big factor when they rate and review their homes.
In this simple guide, we explore the different elements that make up the cost of living in the UK capital. We’ll also show you how it ranks against some of the world’s other leading cities, and look at some reviews where London residents talk about their costs.
February 2023 UPDATE: London’s Affordability Crisis BitesWe originally wrote this guide in late 2021, a time when the pandemic was easing off and things started to look a little brighter for the UK economy. Just over a year later, in early 2023, we’re in the midst of a prolonged cost of living crisis that’s even more grave for many people than the worst months of the pandemic.
With the ongoing war in Ukraine, a resultant energy price crisis, Brexit’s constant economic fallout and a government in chaos, this all adds up to a very bleak economic outlook for Britain. This is particularly the case in terms of affordability in major cities, with London perhaps the worst affected.
According to an August 2022 report commissioned by the London boroughs, average rents in June 2022 were 15.8% higher than the previous year, while the supply of rental properties dropped by 35%. This placed around 125,000 low-income London households at risk of homelessness.
As well as rent, London is just as badly affected by surging energy prices. With the energy price cap set to rise again in April 2023 and the government’s universal support for energy bills set to end at the same time, the strain on people’s finances isn’t likely to get much better anytime soon.
Add these factors together with UK inflation rising to 10.1% in January 2023 (raising the price of food and all consumer goods), living costs are ramping up across the country. London, with its already high living costs, is set to be hit worse than many other places.
What is the average living cost in UK?In early 2023, the average monthly living cost for a single person in the UK is estimated to be around £2,200 with rent included. For a family of four, this figure goes up to £3,965. Of course, everyone’s living costs are different depending on our tastes, choices and circumstances, but this is still a helpful yardstick.
What is the annual average cost of living in London?In 2023, for a single person, the average cost of living in London now clocks in at over £3,200 per month. This is around £1,000 more to find per month than the UK average.
This means that the annual average cost of living in London for a single person is over £38,000. For a family of four, the monthly cost rises to £5,285, or more than £63,000 annually. This makes London the most expensive city in the UK for living costs by far. It’s also the second most expensive city in all of Western Europe!
As you can see, compared to the national average cost of living, London is an expensive place to hang your hat. Some of the main cost types that make London much more expensive than the rest of the country include (figures from numbeo.com):
Rent for 1-bedroom apartment in the city centre: £2,036 per monthPublic transport monthly ticket: £157.50Taxi fare for 1 hour a business day: £28.80Dinner for two in a mid-range restaurant: £70Gym membership: £42.40 per month1 pint or 500ml of beer: £6Bear in mind that while the citywide rental average for London is almost twice that of the rest of the country, this figure is slightly skewed. Due to rampant property speculation and the development of mega-luxury rental properties throughout central London, the sky-high rental rates for these properties drag the city’s average upwards.
So don’t be disheartened! There are plenty of affordable rental properties in London, in practically all of the sought-after boroughs.
Does the area you live in influence the cost of living in London?The area you live in plays a big role in influencing the cost of living in London. While many costs will remain largely the same, things like entertainment, eating out and, crucially, rent will be affected significantly. Take a look at the difference in average rental rates for central and outside areas in London (figures from numbeo.com):
Monthly rent for 1-bedroom apartment outside the centre: £1,448Monthly rent for the same accommodation type in a central area: £2,036The same effect holds true for larger accommodation types too:
Monthly rent for a 3-bedroom apartment outside the centre: £2,457Monthly rent for the same accommodation type in a central area: £3,642What salary do I need to live in London comfortably?Londoners themselves think you need to earn around £65,000 to live comfortably in the capital, according to a recent survey by recruitment firm Reed. However, like every question on average living costs, this depends entirely on your situation. Your tastes in food, clothes and entertainment, your commute, whether you have children or not – all these things influence the equation.
To put things in perspective, the most recent stats in early 2022 suggest that the UK median average for annual earnings was £33,000 for people in full-time work. Given that the average cost of living in London is objectively much more expensive than in other cities, the Londoners’ suggestion of needing £65,000 to live comfortably doesn’t seem so far-fetched.
Still, bear in mind that living comfortably is all a matter of personal priority, so a smaller salary can work too. Additionally, the same report cited the London annual salary median as just £41,866. Clearly, it is possible to live on less than £65,000 in London.
Can you live in London on £30k?While you can manage on a £30k annual salary in London, you may find it difficult to cover your costs. In 2023, this is £8,000 below the expected average expenditure for a single person. Clearly, you will need to economise carefully and flat-sharing will be a near certainty to make rent manageable. Also, after paying bills, taxes and general expenses, it’s likely that your monthly savings will be minimal or even zero.
Earning at least the national average wage is a useful minimum threshold for handling the cost of living in London.
Can you live in London on 20k?Some people claim to be able to live on an annual salary of £20k in London. However, this will definitely require a lot of economising to make ends meet. In early 2023, it seems borderline impossible.
The most important consideration, again, is rent. If you are earning £20k, then it’s almost a foregone conclusion that you will need to share your accommodation to cover the monthly rental cost. Splitting the rent two, three or more ways may leave you with enough to cover basic expenditures like food, transportation and utility bills.
How can you reduce the cost of living in London?It’s not easy to cut the cost of living in London, but there are some areas where you can make savings. TfL (Transport for London) operates excellent public transport networks that can really reduce the cost of commuting. Depending on where you live, the Underground, train, bus and even ferry routes can be a much cheaper alternative to running a vehicle of your own.
Of course, the cheapest transport option is to walk or cycle everywhere you can. Much of London is experiencing upgrade works for its cycle paths and public walkways, so this may be more feasible than it first seems.
Another major saving is the abundance of free cultural and entertainment venues London supports. No other major capital city can boast such a variety and quality of attractions with completely free access.
What is the average price of a house in London?In February 2023, the average property price for London is around £750,729, according to Zoopla. If you’re looking to buy rather than rent in London, even the price drops of the early pandemic are now being reversed. House prices have been rising steadily for more than 40 years, making much of the city out of reach for first-time buyers.
Cost of living vs. other major cities: How does London measure up?London is one of the most expensive cities in the world to live in. This is due largely to the rapid rise in rental costs in recent years. Comparatively expensive prices for most restaurants, clubs, bars, cinemas, theatres, taxis and the London Underground are important factors too.
Below is a brief roundup of headline statistical comparisons between the average cost of living in London and that of other leading global cities in 2022.
London vs. New York cost of livingFigures from February 2023 suggest that New York is noticeably more expensive to live in compared to London. While the average cost of living in London stands at £5,300 per month, the Big Apple’s is £7,564.
Again, rent is a crucial factor, with average rental rents being an incredible 52% higher in New York. Restaurants are another source of higher costs, averaging 18.7% higher than London. While New York offers significantly cheaper basic utilities (gas, heating, water) at almost 44% less than London, its internet rates are a whopping 101% higher.
While childcare costs aren’t a concern for everyone, they are also much steeper in New York. These are on average 21.7% higher in N.Y.C. than in London for preschool services and 91.9% higher for international primary school fees.
London vs. Milan cost of livingThe beautiful and stylish Italian city of Milan is still expensive by European standards, but has an average living cost of around £4,300 per month – almost exactly £1,000 cheaper than London. Even though the GBP/Euro exchange rate is still not favourable for the pound, it still goes further in Milan. Restaurants are around the same price as London, but monthly transportation passes are a massive 78% less.
However, it is Milan’s cheaper rents that really make a difference. On average, rent is 40% cheaper than London, city to city. There’s an even bigger difference for smaller accommodation, as one-bed apartments are 44% cheaper in Milan’s city centre.
London vs. Singapore cost of livingSingapore is generally more expensive to live in than London. The city’s near guarantee of an extremely clean, modern, hi-tech, safe and comfortable lifestyle comes with a price attached.
Rent is 40% higher on average in Singapore. While restaurant prices are around 20% lower overall, you pay noticeably more for alcohol. Groceries are also 37% more expensive than in London, due to Singapore’s reliance on imports.
Public transport is one area that’s reliably cheaper in Singapore across the board. Its excellent metro system offers prices 53% lower for single tickets and 50% lower for monthly passes than the London equivalents. Taxis in Singapore are around two-thirds cheaper than in London too.
London vs. Dubai cost of livingEven though Dubai is known as a shining city of giant skyscrapers, supercars and all the other trappings oil money, it’s still a cheaper place to live than London. All the key factors for monthly average costs are around a quarter cheaper in Dubai. This includes restaurants, groceries, consumer prices and basic utilities.
Rental rates are about 25% cheaper in Dubai too. Another interesting comparison is that buying property in Dubai is significantly cheaper than in London. The ‘per square metre’ price in Dubai is a whole 72% lower on average.
London vs. Luxembourg cost of livingYou might think that Luxembourg is an unattainably expensive place to live, thanks to its reputation as a banking hotspot. However, the reality is that it’s a fair bit cheaper to live here than in London.
Rent is the biggest difference here, as Luxembourg offers average rental rates that are nearly 28% lower than London. That’s impressive, given the high quality of Luxembourg accommodation, especially in the city centre. There are small benefits in terms of consumer goods prices too, but this is the main saving you’ll see when looking at the cost of living in Luxembourg compared to London.
On the downside, you pay a lot more for restaurants and food shopping in Luxembourg – 8% and a whopping 22% respectively.
London vs. Melbourne cost of livingMelbourne is now well established as one of the coolest and most desirable places to live in Australia. But has that translated into a higher cost of living? Well, even though some key costs are on the rise, Melbourne is still a significantly cheaper prospect than London.
When it comes to average rental rates, Melbourne property is 40% cheaper than in London. This is a huge consideration, given that rent is by far the biggest monthly expense for Londoners.
Other plus points for the cost of living in Melbourne compared to London include restaurant bills (2% cheaper) and consumer good prices (14% cheaper).
London vs. Glasgow cost of livingSimilar to Melbourne, Glasgow has won itself a reputation as a new hub of property development, opportunity and cultural coolness. The cost of living in Glasgow compared to London is still favourable, almost across the board.
Starting with the best news, renting a property in Glasgow is around 60% cheaper on average than in London. This makes renting comparatively inexpensive here. This represents a huge saving for those moving up from the capital.
Other costs are largely comparable since food and consumer goods prices are not that different across the UK’s major cities. Still, these expenses are lower on average in Glasgow, with restaurants being around 9% cheaper.
London vs. Geneva cost of livingWe’ll end on a high note, for London residents at least! The cost of living in Geneva compared to London goes almost entirely in London’s favour. This includes consumer goods (20% cheaper), restaurant bills (32% lower) and groceries (47% cheaper). Even the taxis are cheaper in London, by almost 40%!
The only major area that ‘s comparable between London and Geneva is renting, with London still coming out slightly cheaper (2%).
Highest-rated new development for value in London:
Anthology’s Hoxton Press development has the highest rating for ‘value’ of all new London developments on HomeViews (with min. 20 reviews). This scheme is a selection of Studio, 1, 2, and 3 bedroom homes designed by world renowned Architects Karakusevic Carson Architects and David Chipperfield Architects. It comprises two landmark buildings, Mono and Duo, as well as a community café and landscaped gardens. Located in the regeneration area of the Colville Estate, nestled between Shoreditch Park and the Regents Canal, Hoxton Press will celebrate the heritage left by the sites former occupiers, The Mullord Brothers Printing Press, who created intricate Victorian paper between 1860 and 1920.
Read reviews and details of Hoxton Press, N1
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