A Guide to the Cost of Living in London

So you’re considering moving to the nation’s capital, home of the West End, superb international shopping, unbeatable entertainment, fabulous eating out, some of the nation’s best bars and oodles of world-class attractions. It’s a thrilling prospect. But are you sure you can afford to live in the UK’s most expensive city? And if you can afford to rent or buy, how about everything else? It’s time to carry out a common sense cost of living comparison.

This article explores the average cost of living in UK compared to London. The figures come from a variety of reliable sources including the Numbeo cost of living website and the cost of living index. Read on to discover the real average cost of living in London set against the average cost of living elsewhere.

Average Cost of Living in the UK

Let’s kick off our cost of living comparison with a vital question, which gives us a sensible benchmark: What is the average cost of living in the UK? The answer at the moment, thanks to covid and various economic factors, is ‘it’s going up’. Inflation in the UK has soared. The cost of living increase, UK wide, is quite dramatic right now.

In December 2021 the average cost of living in UK was 5.4% higher in Dec. 2021 than it was 12 months earlier, a sign the long, steady period of miniscule interest rate and other rises is finally over, at least for the foreseeable future.

We’ve seen parallel increases in the consumer price index or CPI. Their 16th February data reveals the CPI, including owner occupiers’ housing costs, shot up by 4.9% in the 12 months to January 2022, up from 4.8% in the 12 months to December 2021. The biggest increases were in housing and household services and transport.

Between December 2021 and January 2022 the most dramatic increases were seen in clothing and footwear, housing and household services, furniture and household goods. And the CPI rose by 5.5% in the 12 months to January 2022, up from 5.4% in December 2021.

Other sources reveal much the same thing. Expatism’s cost of living figures for the UK reveal these estimated costs of living:

  •         Family of four estimated monthly costs: £3,591
  •         Single person estimated monthly costs: £2,044
  •         The cost of living in the UK is higher than 61% of countries in Western Europe
  •         The cost of living in the UK is also more expensive than in 79% of the world’s nations

 

What does Numbeo cost of living say? Their figures are lower than those provided above, revealing: 

  •         The estimated average cost of living for a family of 4 in the UK is £2,272.97 before rent
  •         A single person’s estimated monthly costs are £653.29

 

One thing is clear. All online resources reflect the fact that the cost of living in the UK is more expensive than most other countries in the world.

Cost of Living in London

The closer you get to the capital, the more living costs. It’s a thing, and it happens in every country. It’s no surprise London ranks as the highest cost of living location in the UK whatever metrics you look at. What’s the average cost of living in London?

  •         As revealed by Numbeo, the income needed to keep a family of four going in the capital, before rent, is a whopping £3,037.91 a month
  •         Wise indicates a 4 person family, per month, will need £3,041 to keep going, before paying the rent or mortgage

 

How does London’s cost of living compare to Liverpool, for example? In London one City Centre 3 bed apartment rent costs £3429 per month. Another 3 bed flat, away from the city centre, rents for £2125 a month. Let’s take a look at the cost of living UK cities data for Liverpool:

  •         Liverpool – 3 bed apartment in city centre: £1100
  •         Liverpool – 3 bed apartment outside city centre: £709.
  •         Consumer Prices in London are 21.26% higher than in Liverpool, before rent
  •         Consumer Prices Including Rent in London are 62.84% higher than in Liverpool
  •         Rent Prices in London are 189.84% higher than in Liverpool
  •         Restaurant Prices in London are 8.60% higher than in Liverpool
  •         Groceries Prices in London are 12.41% higher than in Liverpool
  •         Local Purchasing Power in London is 0.43% lower than in Liverpool

 

It’s also interesting to compare the cost of living in London to other UK cities. Here are the most expensive from the top down:  

  •         Milton Keynes comes second
  •         Bath has the third most expensive cost of living 
  •         Reading is fourth
  •         Aberdeen is fifth
  •         Cambridge is sixth
  •         Followed by Oxford, Portsmouth, Edinburgh, York, Manchester, Bristol, and Brighton

 

At the other end of the scale the 10 best cost of living cities, offering the lowest costs, are:

  •         Nottingham
  •         Leicester
  •         Exeter
  •         Birmingham
  •         Southampton
  •         Sheffield
  •         Liverpool
  •         Cardiff
  •         Newcastle
  •         Belfast
  •         Derby

 

Average House Prices in London

London house prices remain the most expensive in the UK, and unless something extraordinary happens they will probably stay that way.

 

  •         The overall average price of property in London is £672,173
  •         London flats sold for an average of £528,621
  •         London terraced properties sold for an average price of £742,938
  •         Semi-detached properties fetched an average of £725,384

 

Let’s compare these overall London prices with example figures from central London:

 

  •         The overall average price of London property for sale is £1,548,953
  •         Flats sold for an average of £1,281,865
  •         Terraced properties in London had an average sold price of £3,620,800
  •         Detached properties in London averaged £1,989,500

 

Cost of Living in Various Areas of London

Does the area impact the cost of living in London? Yes, it does, and the variations between districts can be startling. The cost of living actually varies enormously across London regions, as illustrated by the average property prices in London overall compared to smart, highly desirable districts in Central London. The rental costs vary just as much for the same reasons.

 

Here’s an eye-opening example. We used the Numbeo tool to compare overall London prices with the Newham area of the city, and the contrasts turned out to be quite remarkable:

 

  •         Consumer Prices in London are 76.36% higher than in Newham before rent
  •         Consumer Prices Including Rent in London are 83.24% higher than in Newham
  •         Rent Prices in London are 92.86% higher than in Newham
  •         Restaurant Prices in London are 247.50% higher than in Newham
  •         Groceries Prices in London are 19.44% higher than in Newham
  •         Local Purchasing Power in London is 37.76% lower than in Newham

 

If you can move to a lower cost area of London you can save an absolute fortune. The top ten cheapest places to live in London? Take your pick from Havering, Bexley, Sutton, Croydon, Barking and Dagenham, Redbridge, Hillingdon, Bromley, Enfield, and Waltham Forest.

Salary Required to Live Comfortably in London

Now for the most important question of all. What salary do I need to live comfortably in London? It depends on the district or region of London. In a Time Out survey, Londoners said a salary of around £53K a year is about right. But when you dial down your expectations about the district you choose, you can save  a fortune and your salary will go a lot further. Ironically, thanks to their affordability, many of the cheapest areas of London are either already ‘up and coming’ or will eventually head in that direction.

Can you afford to live in London?

Now you have a clear picture of the actual cost of living, plus the ins and outs of the cost of living in London versus some of the city’s different districts. Pick an area you can afford, with a cost of living that’s more reasonable, and you’ll find life in the capital much more financially viable. We know all about property in London. How can we help you?