What is the Cost of Living in London?

Living in London can be incredibly expensive, but with careful budgeting and money management techniques, you can still make it work. To give you an idea of what to expect from the cost of living in London, this guide will take a look at essential household expenses, housing costs, transportation prices, and other monthly expenditures to help you get prepared.

Household expenses and essentials

London is renowned for its expensive lifestyle, but there are still ways to save money when it comes to basic living expenses. The average cost of a single person’s grocery shopping basket in London is £54.86 – higher than the national average of £50.23 – and prices range from £40-£70 depending on where you shop and your selection of items. When it comes to utilities such as gas, electricity, and water, monthly bills depend on the size of your property, but usually cost between £80 and £200 per month.

Taking care of your health

Healthcare in London is mostly provided by the National Health Service (NHS), meaning that all long-term residents are eligible for free treatment from comprehensive medical care. Costs vary for dental care and short-term visitors, however, and private medical insurance premiums range from about £13 to £150 per month. Pharmacy costs such as over-the-counter medication are generally quite reasonable and average around £5-£10 per visit.

Housing costs in London

The cost of renting a property in London depends on the location, size and condition of the property you’re looking for. Prices for apartments can range from around £450-£700 per week for a basic one-bed apartment in the outer suburbs to over £1000 per week in the city centre. Sharing a property is a popular choice to keep housing costs down, often yet still quite unaffordable – studio and one-bed apartments in shared properties start from around £780 per month in good areas such as Hammersmith and Fulham. Sharing a three-bed apartment with two people will typically cost around £850 per month per person plus bills, while renting a four-bed property with three people could possibly drop to around £600 a month each plus bills.

Buying property

If you have the capital to invest in buying a property in London, that doesn’t necessarily mean that it will be cheaper than renting. Average prices for properties in London are much higher than in most other parts of the UK, making it a difficult area for first-time buyers to get their foot on the ladder. Buying costs such as contracts, mortgage fees, stamp duties and other legal fees add up to around £14,000 and one-bed properties can cost anywhere from£250,000 to well over a million in central areas such as Primrose Hill. Houses start from around £400,000 or even more.

Transportation

Most people travel around London by either public transport or taxi, although walking is an option for short distances. The Tube – London’s interconnected underground rail network – is popular for short and long distance journeys; tickets for single trips vary from around £2.40 (Zone 1) to around £5.60 for longer journeys (Zone 9). Monthly season tickets for regular commuters can involve higher costs – an Oyster card for Zone 1 costs approximately £146 per month. Taxi fares are also steep but vary depending on the journey, roughly ranging from £5-£25 within central areas. Ride sharing apps such as Uber can be a slightly cheaper choice if you’re looking for a convenient way to get around.

Average cost of living in London

Gathering all these costs together give us an idea of a typical monthly budget while living in London. Average monthly outgoings on things like groceries and household bills come to around £400-£600, while rent will most likely take up the bulk of your budget at £600-1000. Expenditure on transportation (depending on individual lifestyles) can range from £80-£300 per month; healthcare will be free via the NHS with small costs for medications and prescriptions; leisure activities such as nights out in bars and cafes could set you back £100-£150, depending on your level of indulgence. Overall, it’s clear that life in London isn’t cheap! However, whilst the cost of living is high, it does have some advantages. There is plenty of employment opportunities for those living in the Capital; it offers access to world-class education, culture and entertainment; and London remains one of the most cosmopolitan cities in the world where people of all sorts of nationalities can live happily and peacefully. If you’re willing to steer clear of temptations such as designer clothes shops, expensive restaurants and other luxury goods, budget carefully, shop wisely, and learn about all the deals available for transportation and entertainment – living in London can be an incredibly rewarding experience that doesn’t have to be as expensive as you’d think. For more information about what’s available to help you save money in London, take a look at Money Advice Service’s guide.