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.
Cost of living: May 2024 update
We originally wrote this guide in late 2021. Since then it’s been a bumpy ride for cost of living in the UK, largely driven by increases in rent, energy prices and rising inflation.
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%. Energy prices have also placed a significant strain on people’s wallets in the past year, though the government’s energy price guarantee has helped to stabilise the rising energy prices.
Add these factors together with UK inflation hitting 10.3% in March 2023, living costs are ramping up across the country, and particularly across London. As we entered late 2023, things hadn’t got any better on this front. Despite inflation dropping, real prices of essentials remained stubbornly high.
Additionally, rising interest rates throughout 2023 pushed many potential house buyers out of the market, which increased demand for rental properties, pushing up average rental rates. This was felt most keenly in London. In its UK private rental rates report, the ONS said that London had the highest annual percentage change in private rental prices in the 12 months to October 2023 at 6.8%. This was a sharp rise in an already expensive sector, bringing the London median rental average up to £1,500 per calendar month.
Then, in the latest ONS rental rates report in January 2024, London’s overall 12-month level of rental increase had risen to 6.9%, still the highest in the country. Currently, renters in London spend around a third of all they earn monthly on rent, their biggest monthly outgoing by far.
Overall, it’s a tough time to make living in London affordable. This is all the more reason to be prepared, understand the realities and make savings wherever you can. So read on, and find out what the cost of living in London is like in mid-2024.
FAQs
What is the average living cost in UK?
In mid-2024, the average monthly living cost for a single person in the UK is estimated to be around £2,550 with rent included. For a family of four, this figure goes up to £4,400. 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 mid-2024, for a single person, the average cost of living in London now clocks in at over £4,200 per month. This is around £1,650 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 £50,400. For a family of four, the monthly cost rises to £6,350, or more than £76,200 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: £2,178 per month
- Public transport monthly ticket: £182.50
- Taxi fare for 1 hour a business day: £34
- Dinner for two in a mid-range restaurant: £81.50
- Gym membership: £58.66 per month
- 1 pint or 500ml of beer: £6.50
Bear 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, including in almost all the most 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: £1,611
- Monthly rent for the same accommodation type in a central area: £2,178
The same effect holds true for larger accommodation types too:
- Monthly rent for a 3-bedroom apartment outside the centre: £2,856
- Monthly rent for the same accommodation type in a central area: £4,422
What 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 mid-2024 suggest that the UK median average for annual earnings was just under £35,000 for people in full-time work. Given that the average cost of living in London is objectively much pricier 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 £44,370. Clearly then, 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 mid-2024, this is nearly £14,000 below the expected average expenditure for a single person living in London. 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 require a lot of economising to make ends meet. In mid-2024, 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 even four 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. While paid attractions in London are usually pricey, given its touristic appeal, there’s no shortage of things to do for free.
What is the average price of a house in London?
In May 2024, the average property price for London is just over £700,000, according to Rightmove. Prices have recently levelled off and even dropped slightly after hitting previous post-pandemic highs at the start of 2023. Consistently high interest rates are making mortgages unaffordable for many, reducing the buyer population and forcing motivated sellers to drop their prices.
Cost of living vs. other major cities: How does London measure up?
Today, London is one of the most expensive cities in the world to live in. As discussed, rental rates are sky high, and the cost of living crisis is making utilities and essentials pricier too. Comparatively expensive 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 2024.
London vs. New York cost of living
Figures from May 2024 suggest that New York is noticeably more expensive to live in compared to London.
Rent is a crucial factor, with average rental rents being an incredible 39.9% higher in New York. Restaurants are another source of higher costs, averaging 16.4% higher than London. While New York offers significantly cheaper basic utilities (gas, heating, water) at almost 56.9% less than London, its internet rates are a whopping 73% higher.
While childcare costs aren’t a concern for everyone, they are also much steeper in New York. These are on average 16.3% higher in N.Y.C. than in London for preschool services and 71.2% higher for international primary school fees.
London vs. Milan cost of living
The beautiful and stylish Italian city of Milan is still expensive by European standards, but has an average living cost that’s around £1,000 cheaper per month 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 81.5% less.
However, it is Milan’s cheaper rents that really make a difference. On average, rent is 43.3% cheaper than London, city to city. There’s an even bigger difference for smaller accommodation, as one-bed apartments are 46.3% cheaper in Milan’s city centre.
London vs. Singapore cost of living
Singapore 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 13.5% higher on average in Singapore. While restaurant prices are around 30% lower overall, you pay noticeably more for alcohol. Groceries are also 18.3% 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 60% lower for single tickets and 58% 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 living
Even 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 24.6% 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 80% lower on average.
London vs. Luxembourg cost of living
You 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 37% 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 roughly 10% more for food shopping in Luxembourg than you will in London.
London vs. Melbourne cost of living
Melbourne 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, which are around 12% cheaper than London.
London vs. Glasgow cost of living
Similar 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, even in 2023 when Scottish rents are on the rise. 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 20% cheaper.
London vs. Geneva cost of living
We’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 (23% cheaper), restaurant bills (25% lower) and groceries (39% cheaper). Even the taxis are cheaper in London, by about a third!
The only major area that’s comparable between London and Geneva is renting, with averages coming out about the same for the two cities.
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