How much does it Cost to live in London?

There are many activities to do and people to meet in London. In fact, London is a super diverse city which attracts people from all over the world. However, the large growing population and cost of living are some drawbacks for living in the capital.

After living in London for almost 10 years and I keep being amazed by how expensive London is. I have had friends asking me how it is to work and live here which pushed me to make this blog. This blog is a factual guide that will cover how much money you will need to live in London based on personal observations and research. The topics covered include:

1. London Facts
2. Accomodations (buying and renting)
3. Bills, Tax and Utilities (e.g. council tax, NI, WiFi, gas and electricity, etc.)
4. Food
5. Transport
6. Other Expenses

If you have any other tips or facts to share don't forget to leave them in the comments at the end of the blog =).

1. London Facts

• The population in London in 2022 is over 8.8 million based on the ONS Census for 2021.
• Around 13% of the population in the UK live in London.
• London is the 4th most expensive city in the world for foreigners to live in 2022 (Bloomberg, 2022).
• The national minimum wage in 2022 is £9.50 per hour (Gov UK, 2022).
• It rains 11-15 times a month every month.
• A city with more than 270 nationalities (London gov, 2015).
• London is the most densely populated region in the UK (5,598 residents per square kilometer, ONS).
• Tower Hamlets, Islington and Hackney make it to the top and most densed areas within London.

2. How much do accommodations cost in London?

There are over 8.8 million people living in London and population keeps increasing every year. For this reason, the cost of living in the capital continues to increase as the demand grows.

Buying

According to Rightmove, the average price for a flat in London is £533,891, with terraced and semi-detached properties being around £800,000. It is very unlikely to find properties in a good condition for less than half a million...

Renting

The amount of rent to pay for an accomodation in London mainly depends on:

1. London zone (zone 1 being the city center)
2. Number of tenants (if sharing) that live in the property
3. Number of rooms (if not sharing) of the propoerty

A realistic summary of the average rents in London:

• A quick search on SpareRoom will list single rooms ranging from £600-£800pm usually with bills not included.
• A studio in Zones 1-2 will cost between £850-£1,100pm.
• A two-bed flat will start from £1,400 (no bills included) usually in Zone 3 or outwards.

Bills usually include water, electricity, gas, council tax, WiFi, TV licensing and landline if any. More are covered below in this blog. You should expect to spend at least £160pm on bills.

3. How much are Bills, Tax and Utilities in London?

Bills & Taxes

Council Tax:

Council Tax usually varies depending on the London borough and property band. It is managed by the London Councils and the easiest way to find out is probably by asking your landlord how much you will have to contribute (I would personally expect £90-120pm if you are by yourself).

The Council Tax bands range A to H and is based on the property size, location, layaout, market value and other attributes. For example, you can pay around £915 anully for a Band D property in the City of London or £2,409pa for a Band E property in Havering.

Income Tax:

Income Tax is how much tax you pay from your salary. If you earn less than £12,571 you pay 0%, and if you earn between £12,571 and £50,270 you will pay 20% of whatever amount you earn above £12,571. You can check more income taxes in the gov.uk web.

National Insurance:

National Insurance (NI) is another tax on earnings that you will have to pay if you earn over £242 per week (£1,048pm). You will have to pay 13.2% of the amount you earn over the £242. You can check how much you pay in the gov.uk web.

Utilities

• TV License is sometimes paid by the landlord, if not you will have to pay £157.50 anually to legally watch TV...
• Electricity is usually more expensive than gas and could cost around £45 per month with the current energy crisis.
• Gas is usually £30 per month (and slightly more during winter).
• Water is sometimes paid as part of you rent. If the bill is on your name you will have to pay around £30 per month.
• WiFi depends on your provider, speed and whether or not you have a landline, but it could cost around £35 per month for a good speed suitable for remote working.

4. How much does food cost in London?

This really depends on your diet, dietary requirements and how many people you plan to share food with. The cost of groceries is the same everywhere in the UK for established supermarket brands (e.g. Tesco, Asda, Sainsbury's, etc.).

I personally spend around £60 every two weeks for two people in Lidl for large grocery shopping + any essentials in the local Tesco (£10-15 per week) if I run out. So in general, an expected estimate for the cost of groceries in London could be around £80-100 per month per person.

When eating out, you can find meals for £7.50-£11 per person on single £ restaurants (e.g. food markets, fast food restaurants), or £14-20 per person on bigger (££) restaurants.

5. How much does public transport cost in London?

London underground (aka 'tube') stations are well connected so cars are not really necessary unless you need it for work. You can also pay with a contactless card or Oyster card.

Here is a summary of the cost of public transport:

• A single bus fare will cost you £1.65 per journey (unlimited journeys within an hour)
• A single train fare will cost you £1.65 per journey if on the same Zone
• A single train fare will cost you £3.60 if travelling to central London during peak hour (7am-10am and 4pm-7pm on weekdays)
• A weekly travelcard for Zones 1 to 2 cost around £38.40 per week or £147.50 per month (costs varies depending on Zones you plan to commute in)
• A Santander bike (usually located in Zones 1-3) cost £2 for unlimited 30 min journeys during a day

Walking and cycling are free, so if you can walk or cycle to commute you will save a lot of money per month.

If you do not use public transport everyday, you can use pay as you go with your normal Oyster card or contactless card and spend around £10-15 per week for 6-9 journeys. As a rule of thumb, expect to spend MINIMUM £50 per month on transport.

6. Other Expenses Costs in London

Here is a list of the usual cost of memberships, activities and other good and services in London:

• Gym memberships depends on where the gym is located and other benefits offered by it but a low cost gym could cost you around £22-30.
• Single meal with drinks can cost as little as £7.50 or as much as £24 for £ and ££ restaurants price scale from Google Maps.
• Pint of beer usually cost £4.50-£6 (similar for a glass of wine) while cocktails vary between £8-12.
• Paid local activities like trampolining, cinema, comedy clubs, minigolf, escape rooms and similar can range from £15-40 depending on the activity.
• Parks, museums, markets, and shopping malls are free to visit (luckily!).

Summary and Tips of Costs in London

Didn't you add up your costs of living in London? That's fine, here is a summary of the monthly cost of living in this big city for an individual person with examples at the end:

Renting a Property (bills not included)

• Room: £400-600pm
• Studio in Zones 1-2: £850-1,100pm
• Two-bed flat in Zones 2-3 and outwards: £1,400+pm

Bills, Taxes & Utilities (check your tenancy agreement)

• TV License : £13.20pm
• Electricity: £45pm
• Gas: £30pm (higher in winter)
• Water: £30pm
• WiFi: £35pm (speed suitable for remote working)
• Council Tax: £90-120pm

Food & Transport

• Groceries bulk: £80-100pm
• Transport: £50pm (MINIMUM) or £160-£200pm (commuting everyday)

Other Expenses

• Gym: £20-30pm
• Eating out: £7.50-£11 per meal (£ restaurants) OR £15-24 per meal (££ restaurants)
• Drinking: £4-6 per pint of beer or £8-12 per cocktail
• Netflix, Disney Plus, Amazon Prime, Spotify: ~£30pm
• Paid local activities: £15-40

Examples

Alan is a blogger who lives in London. He shares a property in Zones 2 with 3 other people and the bill does not include water and TV license cost. Alan goes out twice a week with friends and has multiple enternaining accounts:

Minimum cost of living in London for Alan
= Rent + Bills + Food + Transport + Others
= £400 + (£11+£8+£9+£30) + £80 + £50 + (£15x2x4 + 30)
= £738pm

Jerry and Kate are a couple who recently move to London. Jerry works as a chef in the city center and Kate is a self-employed consultant. They have a one-room flat borderline Zone 2-3 and go out for dates (food and drinks) twice a month. Kate likes to go gym when she is free. They both share enternaining platforms.

Minimum cost of living in London for Jerry and Kate
= Rent + Bills + Food + Transport + Others
= £1,200 + £240 + £160 + (£160+£50) + (£20+£15x2x2+£12x2x2+£20+£30)
= £1,988pm (or ~£1,000pm each)

Tips to save money in London

London life is expensive and it is hard to enjoy if you are constantly worried about money. Here are a few tips and things to consider if you plan to move here:

1. The further away you move from the city center the bigger the accomodation and the less you pay.
2. Transport is a significant expense for Londoners usually costing as much as £200pm if you commute almost everyday. Check my other blog on Tips for Public Transport in London and consider working from home or hybrid-working if you can.
3. Check your tenancy agreement or ask your landlord what bills you will have to pay. You could save yourself from paying water, the TV license and possibly other bills.
4. The examples above are very optimistic for the minimum cost of living in London. If you want to try a life in London, make sure that you have enough savings to survive at lest for 3-6 months.
5. Salaries were not stated in the examples above, but make sure you exclude any applicable Income Tax and National Insurance contribution from your gross pay to know how much money you will have at the end of every month.

Last tip!

Since everyone is and behaves differently, I recommend doing this calculation with your own salary or expected salary and decide whether or not living in London is suitable for you:

Let's say that you earn the minimum national wage of £9.50ph and have a full-time (40h) job. That means that your yearly salary is £18,240 before taxes (around £16,360 after taxes). If you spend £1,000pm based on the examples above, you will end up spending £12,000 per year. This will leave you £4,360 in a year to save, invest, spend on holidays, more goods or other things. Will this be enough for you?

I hope this blog helps you with any upcoming decision or knowing more about life in London. If you have any other tip or fact to share feel free to leave them in the comments =).

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