How much money do you need to live in London? You may need more than you think. London is the largest city in England with a population of close to nine million people. It is an overcrowded city with a high demand for housing, which tends to drive up the cost of everything. However, the average cost of living in London City depends on a variety of factors.
You need to consider the number of people in the household, which impacts food costs. The location also matters. Some areas of London may bring higher utility costs or require longer commutes to work.
In Summary, the average cost of living in London for a family of four is over £4000 per month for rent, food, and other expenses. The average cost of living in London for a single person is about £2000 per month. And the estimated cost of living in London for an international student is about £16,734 per year.
Compared to other major cities around the world, London is one of the most expensive places to live. For example, Los Angeles is 5.48% less expensive compared to London. New York is one of the exceptions, with an average cost of living 41.73% higher than London.
How Much Does it Cost to Live in London?
To get a good estimate for the average cost of living in London, you need to examine the following list:
1. Average Cost of Living in London Based on Household Size
The cost of living in London as a family, single person, or international student will vary due to different accommodations, food budgets, and other expenses.
1.1 Average Cost of Living in London for a Family
If you are moving to London with your family, you may need something larger than a one-bedroom flat. The average price of a three-bedroom apartment is £1285 to £13,700 per month.
The most expensive part of London for a family is Mayfair. It is an affluent area found in the West End of London near Hyde Park. This area includes many upscale homes, restaurants, and commercial districts.
The least expensive part of the city for a family is Abbey Wood. It is in South East London in the boroughs of Bexley and Greenwich.
The monthly rent for a three-bedroom apartment is only a portion of your living expenses. A family of four can expect to spend about £2919 for food, entertainment, transport, and other expenses.
Read more: Why Does Everyone Want to Live in London?
1.2 Cost of Living in London for Single Person
If you plan to move to London on your own, your costs will be much lower compared to a family. Instead of a three-bedroom apartment, you can find affordable one-bedroom flats:
- £1200 per month in the center of the city
- £900 per month outside of the center
Your total budget for food, entertainment, and transport may come to about £871 per month. Depending on where you choose to live, your total cost of living with rent may equal close to £2000 per month.
1.3 Living Cost in London for International Students
As the home of several prominent universities, London is a popular destination for international students.
While student housing is often less expensive compared to other accommodations, students typically need to pay a deposit up front. The average student can live a modest lifestyle with a budget of about £16,734 per year.
The estimated cost of living for an international student in London includes rent, utilities, transportation, food, and other basic expenses.
2. Average Cost of Housing in London Based on Location
After considering the size of your household, you should focus on the location. The City of London is separated into several informal areas including East, West, North, and South London. The cost of housing depends heavily on where you choose to live.
For example, a one-bedroom flat tends to cost less in South London compared to West London. Overall, the average cost of a two-bedroom apartment is:
- £2500: Median monthly rent across London
- £2630: Average monthly rent in an expensive part of the city
- £1898: Average monthly rent in a normal part of the city
- £1748: Average monthly rent for a furnished studio apartment
Here is a closer look at the average costs for each major part of London, along with the cost of living in Outer London.
2.1 East London
East London is traditionally one of the less expensive places to live in London. However, the housing prices for East London continue to rise, increasing 8.83% over the previous year.
The average price of a house is £500,100. Luckily, you can still find reasonably priced rentals of £900 to £1000 per month for a one-bedroom flat.
2.2 West London
West London is considered the posh part of the city. It is the home of the rich and famous. You will also find many cultural attractions and high-end shopping destinations.
Terraced properties in West London sell for an average of £1,740,206. If a house is out of your price range, the flats are a little more affordable at £850 to £960 per month for a one-bedroom flat.
2.3 North London
North London is known for King’s Cross and Abbey Road along with the bustling markets found in Camden Town. It is a family-friendly part of the city. The average house sells for about £741,689.
As with other parts of the city, the flats are much less expensive at £750 to £900 per month for a one-bedroom flat.
2.4 South London
South London is an area of hip atmosphere. It has a younger population compared to some of the other areas and reasonable housing prices.
The average house in South London sells for about £588,955 and you can expect to pay £720 to £840 per month for a one-bedroom flat.
2.5 What Is the Cost of Living in Outer London?
In some of the areas away from the city center, you may find prices as low as £1400 per month. The most expensive areas are found around the center of London, also called the City of London.
The outer parts of London get less expensive the further you travel. Outer London consists of a group of London boroughs that form a ring around the city.
Here are some of the least expensive boroughs based on the average asking rent for a one-bedroom flat:
- Bexley: £823
- Havering: £863
- Croydon: £917
- Bromley: £917
- Sutton: £926
Keep in mind that these prices are for flat shares. When you rent a flat, you receive a private bedroom but need to share several common areas. Typically, the living room, bathrooms, and kitchen are communal areas, which limits your privacy.
However, flats are less expensive and easier to find compared to property rentals.
3. Average Utility Costs in London
Unless utilities are included in the cost of your housing rental, you need to include utilities in your cost estimate. Heating, cooling, electricity, water, and garbage are not free.
As with other living expenses, the costs depend on the size of the housing and the number of occupants. Utilities can cost between £100 and £303.
The average cost of utilities for a 915-square-foot apartment is £173.91 per month in utilities.
Along with regular utilities, you may have additional expenses for services, such as:
- Internet with unlimited data: £32 per month
- One minute of prepaid mobile phone plans: £0.13
Prepaid mobile plans provide the most affordable option for phone usage. You can pay simply for the minutes that you use instead of paying a flat monthly fee.
If you bring a phone from home, you may also need to buy a new SIM card and ask your current phone provider to unlock your phone.
4. Budgeting Food Costs in London
The next area of concern is food. The amount that you spend on food will likely depend on your eating preferences and the number of people in your household.
For two people buying basic food, toiletry, and laundry items, you can expect to pay £80 to £100 per week.
If you choose to rent a flat with a communal kitchen area, you may find yourself eating out more often compared to preparing home-cooked meals.
Eating out in London is a pricey activity. Here are some of the average prices for food and drink in London:
- £10 to £30 for a meal at an inexpensive restaurant
- £45 to £100 for a two-person meal at a mid-range restaurant
- £5 for a pint of domestic beer on draught
- £5 for a bottle of imported beer
- £3 for a cappuccino
- £1.15 for a bottle of water
How does this compare to other cities? Restaurants in London are about 36.14% more expensive compared to Toronto and 15.63% more expensive compared to Paris. However, restaurants in New York are 8.58% more expensive.
Surprisingly, groceries are less expensive in London compared to most major cities. You can save 40.96% on groceries if you choose to live in London instead of New York. Groceries are also 21.26% less expensive than in Paris.
Based on these statistics, eating in is the best way to save money on your food budget when living in London.
5. Average Cost of Personal Items and Expenses in London
It is easy to overlook some of the other items that you may need to purchase when living in London. As you cannot expect your clothing to last forever, you may find yourself spending money on the following:
- £40 to £95: One pair of jeans
- £45 to £100: One pair of running shoes
- £50 to £150: One pair of leather business shoes
- £20 to £50: One summer dress from a chain store
Other personal expenses may include fitness clubs and trips to the cinema. You can expect to pay about £42 per month to join a fitness club and £13 for a ticket to the cinema.
6. Average Cost of Accommodation in London
When you first arrive in London, you may need to find temporary accommodations while you compare flats. The city has a wide range of hostels and hotels to suit any budget.
However, a hostel may not be the best option if you arrive with a lot of luggage. Hotels are more likely to offer room safes and storage options.
- £172: Average hotel room rate in London
- £13: Average price for a hostel for one night
7. Average Transportation Costs in London
When choosing a place to live, you also need to consider the distance to your place of work and preferred shopping or entertainment destinations. If you need to travel further, you may spend more on transportation.
The fares for public transportation in London are steeper compared to other parts of the world. Commuter trains, busses, trams, and cable cars are also confusing for new arrivals.
The fares also tend to change. However, here are some of the standard fares for public transport in London:
- £4.90 to £5.90: London Underground (single journey ticket for an adult)
- £2.40: London Underground (Oyster card)
- £1.50: London busses (maximum of £4.50 for the day)
- £231.20: Monthly travel card
The busses and trams do not accept cash. You need to purchase an Oyster card or a contactless card. Some of the other public transport options also allow you to use Oyster cards or contactless cards, which tend to result in lower fares.
Along with public transport, some residents choose to drive their own cars. However, only 54% of Londoners own a vehicle and the percentage continues to decrease each year.
There are several fees and costs associated with owning a car, including:
- £1.15 per liter of petrol (about a quarter-gallon of gas)
- £55 one-time vehicle registration fee
- £54.85 for the MOT testing fee
- £11.50 per day for congestion charge when driving to central London
- £10 per day for vehicles that do not meet minimum emission standards
The next option for transportation in London is to take a taxi. The fares vary depending on the distance:
- One-mile trip: £6.20 to £9.60
- Two-mile trip: £9.80 to £15
- Four-mile trip: £18 to £24
- Six-mile trip: £31 to £34
The most cost-effective option is to rely on public transport. The fares for London busses and trams are more expensive compared to other parts of the world. But they are still more affordable compared to owning a vehicle or taking a taxi to every destination.
8. Cost of Hiring a Bike/Bicycle in London
An alternative to taking a taxi or hiring a car is to hire (rent) a bike. Santander Cycles is a public bicycle hire scheme available throughout London:
- £2 to rent the bike for 24 hours
There are 11,500 bicycles found at more than 750 docking stations. Each bike has an adjustable seat, lights, and a basket for storing purchases.
You should have no problem finding a docking station near your housing or temporary accommodations, making it one of the most convenient transport options in London.
The cost is only £2 for 24 hours of access to the bike. You pay an additional £2 for additional periods up to 30 minutes. However, the first 30 minutes are free.
So, if you return the bike to a docking station every 30 minutes, you can ride throughout the day for just £2.
You can use a bank card to pay for the bike at the docking station. You are then automatically billed based on the duration of your journey.
If you want to avoid using your bank card publicly, you can download the Santander Cycles mobile app.
If you would rather own a bike, the average cost of a new adult bicycle is about £200 in London.
9. Average Cost of Childcare in London
If you are a working parent with small children, you may need to pay for childcare. Luckily, you have several options to suit almost any budget:
- Registered childminder: £160 to £200 per week
- Day nursery: £175 to £280 per week
- Nanny: £250 to £450 per week
- Au pair: £75 to £85 per week
These costs are related to daytime childcare. Depending on your work arrangements, you may also need after school care. The average cost of an after-school club is about £59 per week.
Read more: Taxi in London – Getting Around in London
9.1 Registered Childminder
Childminders are registered childcare workers that offer childcare services at their own homes. They are often parents themselves, allowing your child to interact with other children.
This is one of the more affordable choices, with childminders charging between £160 to £200 per week.
9.2 Day Nursery
Taking your child to a day nursery is a common choice for working parents. You receive the peace of mind in knowing that your child is at a professional childcare facility with registered childcare workers.
However, it can cost more compared to hiring a childminder, with an average cost of £175 to £280 per week.
Part-time nannies tend to charge between £250 and £450 per week for daytime childcare. They come to stay at your house during the day, caring for your child and aiding with their development.
Nannies receive formal training and are usually the most expensive option. Due to the high demand for nannies, you may need to include additional benefits, such as covering their transportation costs.
9.4 Au Pair
Hiring an Au Pair is the most affordable childcare option. However, Au Pairs are not required to have formal childcare training, they may not be a suitable option for children under the age of two.
Keep in mind that Au Pairs are live-in childcare workers. This means that you need to provide room and board. On top of the £75 to £85 per week compensation, you will spend extra money on food, electricity, heating, and other expenses.
10. Average Cost of Council Tax in London
Council tax is an annual tax charged by the local council to cover local services, such as rubbish collection, sewage, and libraries. It is a combination of a property tax and a personal tax based on the value of the property.
Properties are assigned one of eight bands (A through H), which determines a fixed amount for the council tax. If you live in an expensive property, you pay a higher council tax.
A property valued at up to £40,000 belongs in the “A” band and pays 67% of council tax. The average property (valued £68,001 and £88,000) belongs to the “D” band, which pays a 100% ratio.
Along with the value of the property, the cost of council tax depends on the borough where you live. For example, Westminster has extremely low council tax rates compared to the surrounding areas.
Here is the average cost of council tax for the average “D band” property in some of the major boroughs in Central London and Outer London:
- City of London: £1,007
- Camden: £1,623
- Kensington and Chelsea: £1,236
- Islington: £1,547
- Lambeth: £1,496
- Southwark: £1,440
- Westminster: £780
- Bexley: £1,744
- Newham: £1,383
- Ealing: £1,571
- Brent: £1,644
- Harrow: £1,854
- Bromley: £1,596
- Croydon: £1,784
- Sutton: £1,760
- Barnet: £1,605
- Enfield: £1,695
- Haringey: £1,704
10.1 Council Tax Exemptions
There are exemptions to the council tax that apply to specific types of properties based on the type of occupants.
For example, a hall of residence that is predominantly used as housing for students does not need to pay council tax.
This also applies to a dwelling that is only occupied by students. Full-time students are also exempt.
Additional exemptions apply to housing for members of the armed forces and dwellings where all occupants are under the age of 18.
Some dwellings may qualify for the Single Person Discount, which provides a 25% discount on the council tax for housing with a single resident.
So, how much is the average cost of living in London? A family of four may need over £4000 ($5017 US dollars) per month for rent, food, and other expenses. A single person living in London can expect to spend about £2000 ($2508) per month.
You also need to think about the location, with monthly rent ranging between £1748 and £2630 per month. West London is one of the more expensive places to live while East London and North London often offer relatively affordable housing options.
In the end, London is not an inexpensive city. Out of 486 major cities in the world, London ranks 53rd when ranking the cost of living. However, you can find options to suit your budget if you take the time to compare housing, transportation, groceries, and other expenses.