London forms part of the top ten most expensive cities to live in for expats. However, the cost of living varies from one individual to another and from one family to another, depending on their situation and lifestyle. We believe that by earning a decent salary, and with the correct planning and budgeting strategies, you can enjoy your expat life in London, one of the world's most influential cities, and a diverse hub for people from all walks of life.
Rental
According to Eurostat, London and Geneva are the only European cities with rent to have an average rental fee higher than £1,700 per month. It costs 35% more to rent in London than the rest of the UK.
But why are rents so high in London? The most profound explanation is that the demand is higher than the supply due to skyrocketing land prices and planning restrictions. Other factors, such as the financial district, nightlife, and architecture, also contribute to the increase in demand.
In 2023, the average rental costs in London hit £2,000 a month. You can expect to pay an average of £886 weekly in South West London. Croydon is known to be one of the cheapest areas, with rent being around £1,200, followed by Sutton and Newham. Kensington and Chelsea are the most expensive areas, with rent as high as £2,716 per month. Generally, if you are a single-income household, you should expect to spend about 41% of your income on housing costs.
One widespread practice among tenants in London to reduce living costs is to share accommodation. For example, if you rent a property in North London along with three other tenants, you will pay about £700 each per month. In Croydon, the same type of four-bedroom estate will cost you around £550 each per month. If you wish to live centrally but cannot afford to pay the price of a one-bedroom apartment, you can find three more tenants in a similar position to yours and share the cost of a four-bedroom property.
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Utilities
The cost of utilities depends on several factors, such as weather conditions, suppliers, types of appliances, house size, and position. When viewing properties to rent, you should also try to answer the following questions: Where is the sun at different times of the day and when is each room lightened or shaded? Where do you spend most of your time, and when? For example, the living room should be the space that gets the most sun in the afternoon, so it's warm and cosy when you return from work and want to relax on your sofa. Also, utility costs depend on the overall amount of time you spend at home, and how much of a cook you are - freelancers and people who work from home tend to pay higher utility bills.
London's incumbent suppliers (the default gas and electricity providers in each neighbourhood) are British Gas for gas and EDF for electricity. It is worth knowing that the average unit price under the July 2023 price cap is as follows: 30.11p per kWh for electricity and 7.51p per kWh for gas. However, previous tenants may have changed the incumbent suppliers, or you may wish to start switching to a different supplier offering a better deal.
Six big suppliers compete, and many more small and medium-sized suppliers compete. With houses becoming more energy efficient, people are turning towards suppliers such as Octopus Energy. The company is known for its 100% green electricity approach.
TV and internet packages start at around £30 per month on average. To avoid disappointments, note that parts of inner-city London, such as the boroughs of Enfield, Barnet, Barnett, Lewisham, and Westminster, have slower broadband than the national average. There are areas in London that barely reach speeds above 10.11 Mbit/s, as in the past years, priority regarding broadband coverage has been given to rural areas.
Finally, there are two methods for paying your water bills. You can either install a water metre and pay only for the water you use, or you can be on a fixed tariff, which means that regardless of how much water you use per month, you pay the same amount. Water UK estimates that the average monthly water bill is £34.
Tip:
Use more than one comparison site, as not all suppliers are featured on every site.
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Council tax
When budgeting for the cost of living in London, you should not overlook the council tax renters pay ten months a year to fund local services, such as policing and rubbish collection. The cost of council tax differs depending on the borough of London you live in and your circumstances, and it starts from £763 to £2291 a year. It may be a good idea to discuss the cost of council tax with your property agent or landlord before you book your new home in London, or you can check council tax rates in the boroughs of London you are most interested in.
If you are two or more adults living in the house, you pay a total council tax bill; if you are a couple, you share the bill between you. If you live alone or with children under 18, full-time students, a diplomat, or someone with a mental impairment, you get 25% off your council tax bill. Full-time students at the University can be exempted from council tax.
Good to know:
Register with the to view your council tax account details online.
Attention:
Beware of council tax scammers. The City of London doesn't contact council taxpayers over the phone and doesn't request bank details.
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Public transport
Looking at the London Underground map for the first time may cause you anxiety and confusion - it's understandable, as it is one of the largest underground railway networks in the world and the oldest (155 years old!). The London Underground (or the Tube) has 11 lines, covers 402 km, and serves 272 stations. Are you ready to tap into your journey to the five million passenger journeys made today?
London fare zones
The Tube, DLR, London Overground, and National Rail are organised in nine zones. The further away you travel, the more you pay. For example, moving from zone 1 to zone 4 is more expensive than from zone 1 to zone 2. Fare zone 1 includes central London (e.g., Piccadilly, Charing Cross), where most tourist attractions are, and zones 2 to 6 form concentric circles around zone 1. Buckinghamshire, Essex, Hertfordshire, and Surrey counties are in zones 4 or beyond.
Good to know:
Heathrow airport is in zone 6.
There are three ways to pay for your London journeys: via (i) Oyster card, (ii) contactless debit or credit card, and (iii) Travelcard.
The Oyster card is a pay-as-you-go system; you add credit to your reusable card either at stations' ticket machines or designated shops with the Oyster sign on the window, and every time you tap in and out a journey onto the yellow reader, the system calculates the cost and takes away money from your card. To obtain the Oyster card, you pay a five-pound refundable deposit, and when you are about to move out of London, you can reclaim your deposit at any ticket machine, as well as an up to £10 cash balance left on your Oyster card.
The good news is that there's a daily price cap, which means that no matter how many rides you make within a day, the total cost of your journeys doesn't exceed the price cap. Traveling in zones 1 and 2 will never pay more than £8.10 per day, regardless of the number of trips. For zones 1 to 3, the price cap is £9.6; for zones 1 to 4, it's £11.70; for zones 1 to 5, it's £13.90; and for zones 1 to 6, £14.90.
Good to know:
The majority of travellers use an Oyster card to travel. However, post the COVID-19 pandemic, more travellers are migrating towards contactless payment.
Attention:
Even when the barriers are open, you must tap in and out your Oyster card to prevent extra charges.
The contactless debit or credit card payment was introduced to London travellers in 2014, and it is similar to the Oyster card, with a few differences. So, if you have a debit or credit card that supports contactless technology, you can tap it in and out, exactly as you would do with your Oyster card, to pay for your journey. You may find contactless payment more convenient because you don't have to add credit in advance, as you would do with your Oyster; also, when using your debit or credit card, the total cost of all the journeys you have made in one day is charged at the end of the day.
Attention:
Exchange charges may apply if your debit or credit card is from a foreign bank.
Important:
If you use one card at the beginning of your journey and a different one at the end, both cards will be charged the maximum fare for that journey.
Good to know for tourists:
The Travelcard is an upfront ticket for unlimited rides for one day, seven consecutive days, one month, or one year. The Travelcard is activated after your first journey and valid for calendar days, not 24 hours after the first use. The Travelcard gives you unlimited journeys at a flat rate; however, the cost of your Travelcard depends on the fare zones you travel in. The more fare zones you want access to, the more expensive the Travelcard. A seven-day Travelcard for zones 1 and 2 costs £40.70, whereas a seven-day Travelcard for zones 1 to 6 costs £74.70. Also, a monthly Travelcard for zones 1 to 4 costs £224.70, and an annual Travelcard for zones 1 to 6 costs £2,976. The Travelcard is valid only for the zones you have bought it for, so you must be careful when switching from one zone to another.
You can load a Travelcard on your Oyster card to pay the best possible value for your journeys. For example, if you spend most of your time in zones 1 and 2, with occasional travels to the other zones, you can purchase an Oyster and load a Travelcard for zones 1 and 2 onto it. The two cards will work seamlessly together, and the Oyster card will kick in automatically to cover the section of your journeys in zones outside zones 1 and 2.
Important:
The one-day Travelcard comes in two types: peak and off-peak Travelcard, with the latter being cheaper. The peak time in London is between 4.30 am and 9.29 am from Monday to Friday.
Good to know:
The Travelcard gives you 30% off on most River Bus services.
Good to know:
Some stations, such as Turnham Green, are spread over two zones.
London buses and trams
Around 6.5 million people use London's buses every day. Buses in London are cash-free, meaning you must have an Oyster card, a contactless debit or credit card, a Travelcard, a bus and tram pass, or a Freedom Pass (for disabled or passengers aged 60 or over).
Buses and trams don't operate in zones, so Bus and Tram passes are valid on all services, including some outside Greater London, as long as you spot the red roundel symbol on a bus. You can purchase a one-day Bus and Tram Pass for £6, a seven-day pass for £24.70, a monthly pass for £94.90, or an annual pass for £988.
If you use your Oyster card, contactless debit, or credit card to pay as you go for your bus and tram journeys, you will pay £1.75 for each ride, with the daily price cap being £5.25.
Important:
You don't have to tap out your Oyster card when you get off the bus or tram.
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Groceries
In London, you will find grocery shops and supermarkets for all budgets. If you are looking for affordable produce, then Lidl and Aldi are excellent options for your weekly shopping. Asda, Tesco, Sainsbury's, and Morrisons are more expensive chains but offer more options and are more frequently located around the city. Waitrose, Co-op, Whole Foods, and Marks & Spencer are on the higher end regarding their prices and are better known for their organic and healthy produce. Online delivery from Ocado and other grocery shops is a convenient way to save time and find the best deals.
The average cost of groceries for a family of four is £725. Indicatively, here are some products and their prices, which may give you an idea of what to expect to spend on groceries. A litre of milk costs £1.37; 1 kg of rice costs £2; 12 eggs cost £3.06; 1 kg of cheddar cheese costs £8.33; 1 kg of chicken breasts costs £7.92; 1 kg of tomatoes costs £2.64; 1 kg of potatoes costs £1.16; a bottle of mid-range wine costs £10.24.
If you are looking to get affordable, fresh, and in-season fruits and vegetables, then do your research on London farmers' markets, as it's very likely there's a market near you. Popular farmers' markets in London are the Saturday market in Balham and South Kensington and the Sunday market in Islington and Walthamstow. Farmers' markets aren't merely dedicated to fruit and veg; you can also buy dairy products, meat, fish, pastries, honey, flowers, and cooked local foods.
Tip:
To lower your monthly groceries costs, look for the deals on offer, usually in big supermarkets. Also, if you know that you will be shopping mainly from a particular store, obtain the store's loyalty card for discounts and points.
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Eating out and entertainment
From restaurants, bars, music, and events to museums, theatre, and art galleries, London's vibrant entertainment scene will never cease to amaze you. Whether you want to spend the day in the library, go to the opera, or do a yoga class to reconnect with your body and soul, London has your back. Understandably, some activities cost more than others, but one thing is sure - regardless of your budget, you will never run out of things to do and see in London.
Eating out costs more in London than in other European cities, which is partly due to the high rents that businesses have to pay. The only way to cover those expenses is by charging customers more. The main course for an average restaurant meal is between £10 and £30. Typical fast food meals at McDonalds and Burger King cost around £7, while coffee lovers expect to pay an average of £3.40 for a cappuccino.
Good to know:
In London, you are expected to tip in restaurants between 10% and 15% for a decent service if it's not automatically added to your bill. However, you can refuse to tip if you are unhappy with the service. Black cab drivers in London expect to receive an additional 10% of the fare.
A cinema ticket in London ranges between £10.95 and £13.95; the monthly fee for a fitness club is around £50; a musical show is, on average, around £40, and a cocktail costs about £12. However, if you want to enjoy your drink on a hotel's rooftop bar in the heart of Mayfair, for example, the price can be £18.
What we like about London is that there's plenty of free entertainment for all ages and tastes. For example, some of the world's most prominent museums, such as the Museum of London and the Natural History Museum, are free. If you are an outdoorsy expat, there are many beautiful parks in London, such as the 350-acre Hyde Park, the Kensington Gardens, or the Wimbledon Common, where you can walk, jog, cycle, or enjoy a picnic. Also, there are many free festivals in London, especially during the summer; the Notting Hill Carnival is London's biggest street party every year on the last weekend of August.
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