As you probably already know, the average cost of living in London is HIGH. So high, that it ranks as the most expensive city in the UK, and one of the most expensive cities in the world.
Before moving to London (or even if you’re already living here!) it’s good idea to get a feel for how much it costs to live here. Once you know how much it’s costing other people to live in London, you can benchmark this against your own cost of living.
You can often find yourself wondering… “How is Person X able to afford brunch every Sunday AND fly to Australia for a holiday?!”
Without getting a glimpse into other people’s bank accounts it’s difficult to know exactly how much everyone is spending on their rent, how much they are saving, or how much debt they might be in to keep up their current lifestyle.
The cost of living in London will be different for everyone- and people who earn more, are likely to spend more. The more money that people earn, the more likely they are to have a higher cost of living than someone whose salary is at the lower end of the scale.
To give as balanced a view as possible, as well as providing you with facts from other sources about the average cost of living in London, I will also provide a few examples of the rent and bills that I have paid whilst living in London over the past few years.
I hope the real life examples will help show you what someone with an average London salary (with thrifty tendencies!) spends on their living costs in London.
What Is The Average Cost Of Living In London?
According to website Numbeo, the average cost of living for a single person (excluding rent) in London is £826.47 per month. For a family of four, this increases to £2,936.08 (also excluding rent).
The average cost of living in London will be different for everyone- even house mates who live in the same property will have a different cost of living depending on their commuting costs and overall lifestyle.
It’s also important to point out, that if you find these figures are too high- it is possible to live in London on less. You can find out how to live in London on a budget, and find the best deals on accommodation and bills to ensure that your cost of living does not exceed your income.
You can certainly live in London on a salary that is below the London average, by making your spending lower than the London average. Thousands of people in London are doing so!
Living Costs In London- Rentals & Flat Sharing
Your biggest living cost in London is going to be the cost of your rent (or mortgage if you’re lucky enough to own your own home!) London has long had the reputation of having some of the most expensive housing costs in the world, and it doesn’t show any signs of slowing down.
The average cost of rent for Londoners is £748, with more than a quarter of Londoners spending over half of their salary on their rent! This is staggering compared with the rest of the UK where you would expect to pay around a third of your salary towards your rent or mortgage.
With that said, there are plenty of ways to find an affordable, cheap flat in London- you can read my complete guide on how to find an affordable apartment in London, which details all the tricks and tips you may need to find an affordable home yourself.
I have personally never paid over £635 per month for any rental over the time I’ve lived in London since 2016. I paid £625 for a double room in a house share, £425 for a double room in a flat share (room was shared with my partner), and currently pay £635 for a one bedroom flat in zone 3 (shared with my partner).
It’s certainly possible to find cheaper lets, for less than £748, in London.
Here are my top tips for finding cheaper rentals in London:
- Consider flat shares and house shares- if you are able to share a room with your partner, you are likely to reduce the amount of rent you pay considerably.
- Expand your search area- if you look at a tube map, zones 1-3 are likely to be the most expensive. Look to boroughs which are further afield, and perhaps even consider areas which are not served by a tube line, but have express trains straight to central London.
- Remember that you will pay a premium to live within 10 minutes of a tube station- if you can face an additional 10 minute walk or a short bus ride to the station, you are likely to pay less in rent.
- Negotiating the amount of rent you pay each month could see you save hundreds of pounds a year. I have previously negotiated £50 a month off my rent by agreeing to sign for the flat for two years. It’s always worth asking if they’ll accept a lower offer.
Which areas of London have the cheapest average rents?
Foxton’s released the following data showing where the cheapest areas to rent in London are, the following boroughs are the cheapest areas of London (per calendar month), on average, according to their data.
|Barking & Dagenham||£1,279|
Where and how you decide to live in London is possibly the biggest factor of your average cost of living. Remember to always consider your travel costs too- moving to zone 6 might mean that you are saving money on your rent, but your commuting costs might be extortionate!
Do your research to make sure the numbers check out, and make sure that you can’t find a better deal elsewhere before making a commitment.
It’s also important to research the area carefully to make sure that you feel safe and secure in that particular location- a deal isn’t a great deal if you feel unsafe walking home from work in the afternoon!
How Much Do Utilities Cost In London?
Your utilities and bills in London are likely to be quite similar to other areas of the UK. In some rental contracts, some of your utilities might be included in your rent. For example, our current rent also covers our heating and hot water bill as our block of flats is served by one communal boiler.
In flat shares you might find that your internet is covered, or maybe a cleaner.
In the UK, according to The Money Advice Service, the average gas bill (for a one bedroom flat) is £33 per month, the average electricity bill is £34 per month, and the average water bill is £34.58 per month. If you’re in a house share, the overall bills are likely to be higher, however these will be split between you and your house mates which will make it considerably cheaper.
The good news is that there are a huge number of utilities companies that serve London postcodes, so you can switch to a cheaper utilities provider if you wish to.
I would wholeheartedly recommended switching your utilities via MoneySuperMarket, you can compare the current cost of your utility bills against other providers and make yourself a saving. As of March 2020, a whopping 51% of customers that applied to switch via MoneySuperMarket could save at least £289.40 a year on their utility bills.
A crazy saving! The great thing about your bills is that you can have some element of control over how much you are paying each month- be a Thrifty Londoner and make sure you switch to save that chunk of money.
Phone Bills And Broadband Cost In London
In London you are often tied to the broadband provider that serves your area- and believe it or not, there are even some areas of London where you can’t get broadband! I know. I lived in one. We moved in, and then when we tried to get internet? No one would sell it to us because the area wasn’t served by the necessary cables. Nightmare!
Lesson learned. At flat viewings I now always ask whether you are able to get WiFi at the address- I’ve had some funny looks but it’s such an important service to have in your home.
Broadband will usually cost you £30+ a month in London depending on which package you go for and the internet speed that you require.
Mobile phone bills can again vary greatly between providers and will depend if you already have a handset or not. With Giff Gaff for example, you can get a sim only monthly deal for just £10.
Another great way to reduce your phone bill is to sign up to Airtime Rewards where you earn cashback that you can put towards your phone bill. You just link your card and phone number, and whenever you shop at Boots, Wilko, Waitrose (and tons of other stores!) you will get cashback. Use my unique code 9F333XJG to get £0.50 when you sign up.
Insuring Your Home In London
Taking out an insurance policy almost doesn’t seem necessary when you are renting- but it really, really is. A home insurance policy can cost less than £10 a month, so it’s pocket change in comparison to what you might need to pay if you needed to replace all of your possessions.
My dad bugged me for years to get contents insurance, and until I saw a flat in the next building to mine go up in smoke, I didn’t get it.
Contents insurance doesn’t have to cost the earth, and it means that if the worst happens and there is a fire in your home, you are covered. I now have complete peace of mind that I wouldn’t have to fork out thousands of pounds to replace all of my possessions in a fire.
The best way to get a great deal on any home insurance policy is again to use a price comparison site tool like MoneySuperMarket. I halved the cost of my previous contents insurance policy by using a price comparison site to get the best deal. It’s a no brainer!
Travel Costs In London
Travel costs can again vary greatly in London. As a general rule of thumb, the further you have to commute, the more expensive your travel costs will be. If you are commuting from surrey into central London (or the other way around!) you can expect to pay between £200-300 a month in commuting costs.
If you are commuting by tube, you can buy weekly or monthly tickets which helps to reduce the cost. This table below lays out some key fares (based on using an oyster card or contactless payment card) which you should be aware of:
|Zone 1 & 2||£2.90||£2.40|
Keep in mind that your oyster card will automatically cap your journeys (this cap will depend on which zones you travel through). For example, if you make multiple journeys between Zones 3-1, your oyster will cap your payments at £8.50 for that day. So no matter how many journeys you make that day between those zones, the maximum you will be charged is £8.50.
It’s also important to mention that oyster cards and using a contactless card are the same price- but it costs a lot more to buy a paper ticket (and makes your journey a lot longer too if you have to queue up to use the ticket machine!)
If you’re aged 16-30, a brilliant way to save money on travel is to buy a rail card. They cost £30 for a year, and you save 1/3 on all rail journeys in the UK. But that’s not the best bit. You can also save 1/3 on off peak tube and train travel around London if you add your rail card to your oyster card.
All you need to do is register your oyster card online, and then ask an attendant at a tube station to add your rail card to your oyster card- it’s that simple!
Grocery Costs In London
You might find a slight uplift in grocery shop prices when you move to London- and that is largely due to the number of small convenience stores like Tesco Express or Sainsbury’s Local.
It’s very easy to get into a habit of popping into a convenience store like this every day on the way home from work- they are often found near train stations and town centres.
If you live in an area where there is not a big supermarket nearby, you can combat the cost of shopping in smaller convenience stores by doing an online shop and get this delivered to your home. My preferred online grocers is Tesco, as they seem to be the most competitively priced whilst also delivering good quality fresh foods.
If you are lucky enough to live near a supermarket, you may prefer this option to save on the delivery costs of ordering your groceries online.
The lowest cost supermarkets in London are Aldi and Lidl- again, there are not that many branches of these stores in London, but if you do live nearby to one of them make sure that you take full advantage. They are much, much cheaper than other supermarkets such as Tesco, ASDA or Sainsbury’s.
Iceland is also a budget supermarket that can be found in London, so you may wish to shop at several different supermarket brands to get everything that you need.
Entertainment Costs In London
Eating, drinking and entertainment costs in London are likely to be many people’s highest level of expenditure depending on how (and how often) you socialise with your friends and colleagues.
As you probably already know, there are SO MANY things to do in London. I have broken down some average costs here for you to get an idea of how much the average cost of entertainment is in London…
|Pint of beer||£5.19|
|Glass of wine||£6.00|
|Main course dinner||£15-30|
|V&A exhibition ticket||£15|
Despite these high costs, there are ways to get around paying over the odds for entertainment in London. You can seriously decrease your spending in this area if you become savvy about where you buy tickets to events (check out my guide on how to find cheap west end tickets), and how you socialise.
You can even find out about cheap pubs in London, and suggest them to your friends!
And for all of the things that you can do in London, you can bet there are some great deals out there to seriously reduce costs. Check out Groupon, Living Social and Wowcher to get brilliant deals on food, drinks, afternoon tea, brunch and entertainment in London.
Free Things To Do In London
One of the best things you can do in London to bring down your average cost of living, is to make use of all of the free things to do in London. The parks, many points of interest and museums are completely free.
A crazy number of museums and galleries in the city are free to visit. Check out this guide to free museums in London to get some ideas.
It’s not uncommon to find free events in London throughout the year- such as Bonfire Night on Black Health, or Hyde Park’s Winter Wonderland. Seek out the free events in London (and get your friends on board!) and you can be sure that you will reduce the cost of living in London.
It is also possible to make serious savings on hair, beauty and personal care. With so many salons in London needing to train new hairdressers and technicians, you can often find a completely free hair cut in London. Check out my guide to how to get a free hair cut in London.
If you’d like to see more of the city, you could be a tourist for the day and take one of the best free walking tours in London! It’s a great way to see more of London and you could even bring your friends or date along to one of the more niche options- like a Harry Potter Tour or a London Ghost Tour!
To conclude, the average cost of living in London is thought to be around £826.47 per month, plus £748 per month in rent. A total of around £1,574.47.
However, this should be taken with a pinch of salt, because as you have read in this blog post, there are hundreds of ways to reduce that average living cost in London.
By budgeting, making sure that you live in an affordable apartment, and reducing your day-to-day spending, it is absolutely possible to live in London for less than £1,574.47. However, it’s also important to consider other expenses like holidays, debt repayments, travelling to see family, and other events that are not included in this estimated cost of living.
These extra expenses can quickly add up and make London an unaffordable place to live if you are not making enough money to cover your expenses.
The best way to calculate the affordability of living in London is to calculate your current expenses, add any additional expenses which are likely to be incurred, and deduct this from your salary.
Create a budget to ensure that you can live in London comfortably without having to worry about running out of money!
Follow @thriftylondoner on Instagram to get all the latest news on freebies, events, and managing your money in London!