The Average Cost of Living in London

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The Average Cost of Living in London

London is the capital of the United Kingdom. It is the largest city in the United Kingdom and the country’s economic, transportation, and cultural hub. London is also one of the world’s oldest great cities, with a history that dates back nearly two millennia. Have you considered moving to London? Then you’ve probably been trying to figure out how much it’ll cost to live here, and no doubt you’ve come across articles about how expensive it is to live in London.

Today, we’ll list down what does it actually costs to live in such a place.

London’s Housing Costs

In London, a large portion of your salary will be spent on rent or mortgage payments. To give you an idea of what percentage of your salary you might be devoting to rent:

  • According to a 2020 Hamptons survey, the average 21-29-year-old spent 34% of their pre-tax income on renting a room.
  • According to the Trust for London, the average one-bedroom property is worth 46.5 percent of the gross-median wage.

Rent savings in 2021 may be possible due to a drop in rental prices, particularly in central London. According to SpareRoom, the cost of renting a room in the fourth quarter of 2020 will be 8% lower than in the fourth quarter of 2019.

According to Zoopla, the average rent in London will fall by 6.9 percent in October 2020.

When starting your property search, you can use a tool like the London Mayor website heat map, which will show you the area’s median prices.

Renting an Entire Property

According to Homelet.co.uk, the average monthly rental price in London for new tenancies in 2021 is £1,572. The cost of living here is different. If it were available for rent, a two-bedroom flat in zone 3 would cost between £1,600 and £1,700 per month.

When looking for a flat to rent, you can start with Zoopla or Rightmove, as these are the sites where estate agents list their properties.

Getting Room to Rent

  • Living in shared accommodation, where you rent a room within a flat or house, is very common in London. According to the Hamptons survey, the average Londoner paid £728 for a room, a 2.8 percent increase from 2019.
  • Renting rooms usually do not include utilities, so you should check with your potential roommates about this.
  • From 2013 to 2016, charges were between £650 and £740 per month for a double room in zone 2 shared with three other people, not including utilities.
  • Spareroom will assist in providing room prices, particularly for those looking to save money and live with others.
  • Expect to pay more for a room as a couple than as a single person, but it will be less expensive when split between the two of you.

Insurance for Renters

Renter’s insurance, also known as tenant’s insurance, is intended for people who rent out their homes.

Insurance is classified into two types:

  • Tenants Liability Insurance protects you in the event of accidental damage to items in the property that belong to or are provided by your landlord. Because furnished accommodation is common in the UK, this can protect you from accidentally damaged items and deposit deductions.
  • Tenants Contents Insurance protects your belongings in the event of a fire, theft, accidental damage, or another insured risk.

You can choose to include both insurances in your policy. Your landlord will not insure your personal belongings on their property; they may have building insurance to cover the property, but if there is a fire, you will be responsible for the contents. Insurance costs as little as £10 per month, making it an affordable option for peace of mind.

Is Tenants Liability or Tenants Contents Insurance Required?

No, they are not required to rent a property in the United Kingdom. Whether or not you obtain insurance is determined by how much risk you are willing to take.

London’s Utilities

Council tax, electricity, gas, water, internet, and TV license are among the most common utilities and household bills in London. We’ll explain what each one is and how much you can expect to pay.

If you are allowed to choose your own supplier for utilities, you can use comparison tools such as Money Super Market, Go Compareor U-Switch to find the best supplier for you.

Council Tax

Council tax is an annual fee paid to the local council to fund local services such as garbage collection, police, and fire protection.

You have the option of paying in 10 or 12 monthly installments or annually. When you receive your bill, contact your local government to arrange for a payment plan. My payments are currently made in 12 monthly installments.

The amount of council tax you pay is determined by where you live and the value of your home. There are also discounts available, such as:

  • Live alone (25% discount)
  • Student
  • Low income

Gas And Electricity

You have the option of selecting your own electric and gas suppliers. E. ON, British Gas, EDF Energy, Npower, Scottish Power, and SSE are the major electricity and gas suppliers in London. Despite the fact that there are more than 20 suppliers of electricity and gas. You can narrow down your options by using websites such as Money Supermarket, Go Compare or U-Switch.

There will be two types of energy tariffs available:

  • With a fixed-rate tariff, you pay for each unit of electricity or gas used.
  • Variable-rate tariffs imply that the price will fluctuate and can increase or decrease at any time.

All of the other tariffs will be variations on the two already mentioned.

Many providers will give you a discount if you choose them as your electric and gas provider. It is critical to check the deals available at the time of purchase.

The following is an average of electricity and gas costs over the years:

                           2018 Costs         2019 Costs       2020 Costs        2021 Costs

Electricity         £ 30.74                 £38.06                £38.06                 £85.61

Gas                       £30.38                  £36.21               £36.21

You have the option of switching to a dual supplier for your energy bills. You can now join Octopus Energy on their Supergreen Octopus, which is powered by 100 percent renewable energy and is carbon-neutral.

The cost of energy has risen as a result of the fact that three of us are now working from home.

Thames Water is the primary provider of water and sewerage services to London and much of central Southern England. Regrettably, there is no way to shop around for this!

There are several ways to pay your water bill, ranging from weekly to annual payments.

2018 Costs        2019 Costs       2020 Costs          2021 Costs

   £31.21                 £32.70               £33.46                    £33.46

Internet

Broadband is a fixed cost in monthly bills, making it simple to budget for. Simply select the speed that your household requires and a provider that is available in your area. Because there is competition in this market, you will be able to negotiate the best price.

You can also get combo packages that include tv and broadband, mobile and broadband, or all three.

You can a quite high for internet, especially if you want a fast fibre connection. In recent years, getting tv and broadband bundles has actually become less expensive. We strongly advise you to bargain because you can save money.

       2018 Costs                    2019 Costs                  2020 Costs                        2021 Costs

£41.23–Fibre only        £49–Fibre only         £49–Fibre with TV            £53–Fibre TV

TV Permit (Optional)

If you want to watch Freeview TV or apps like the BBC iplayer, you’ll need a TV license.

Here is the average cost of a TV license over the years:

2018 Costs                   2019 Costs           2020 Costs                2021 Costs

£150.50 (yearly)     £150.50 (yearly)    £157.50 (yearly)   £157.50 (yearly)

Utilities in London are charged on a monthly basis.

For 2021, the total cost for the household is £327.20, which includes Council Tax, electricity, gas, water, internet, and a TV license.

2018 Costs            2019 Costs             2020 Costs                 2021 Costs

  £276.40                  £305.51                    £311.27                         £327.20

Monthly Fees for Individuals

You will have varying costs in your budget as an individual. This includes your mobile phone, groceries, personal care, healthcare, and any other monthly expenses you have.

Cellular Phone

The cost of a mobile phone will vary depending on the type of contract you intend to get or have. You get 5,000 minutes and 10GB of data for £10.

What Is the Monthly Cost of Transportation in London?

Using public transportation, either with an Oyster Card or contactless, is the most popular way to get around London. Having a travel card allows you to travel freely on multiple modes of transportation, including bus, tube, and national rail.

Depending on how you like to budget, you can go contactless or purchase an oyster card for a set period of time, such as weekly, monthly, or yearly.

Contactless will charge you per journey until you reach the daily cap, at which point it will automatically apply the weekly cap.

A weekly or monthly travel card is a popular option. This is very beneficial for budgeting because you can simply top up your oyster on payday and not have to worry about travel until your next pay.

Monthly Travelcards 2021
Zones 1–2£142.10
Zones 1–3£167.10
Zones 1–4£204.30
Zones 1–5£243.10
Zones 1–6£260.00
Zones 1–7£283.10
Zones 1–8£334.10
Zones 1–9£370.60

It’s worth noting that weekly travel cards will cost you more in administrative fees. The longer you keep a travel card, the less it costs. You can also get a yearly travel card, which comes with an Annual Gold Card and can save you £300 per year. The Gold Card entitles you to a third-off discount on certain National Rail routes.

Instead of purchasing a travel card, you can pay as you go.

Consider purchasing a Railcard, which can save you up to one-third off rail fares. This is ideal if you plan on taking weekend trips around the UK, going to the airport, and so on. Before making a purchase, make sure you read the terms and conditions.

Grocery Cost

Grocery shopping will vary depending on your preferences; you can be frugal or upscale by shopping at organic independents. Grocery stores such as Lidl, Aldi, and Iceland will be the cheapest places to shop. Tesco and Sainsbury’s are two mid-priced supermarkets. Marks & Spencer and Waitrose are the high-end stores.

You can generally shop for groceries at Tesco’s, Sainsbury’s, and Good Club, but you can try to switch to more local suppliers when possible.

The food serves three vegetarians and is prepared using household items (i.e. cleaning products and toilet paper). All of my meals included both a lunch and dinner portion, for a total of 14 meals per week.

Monthly budgeting begins at £200 for a single person and £400 for a couple. This would entail shopping at a midrange supermarket for two meals per day as well as household items.

How Much Does a Meal in London Cost?

Meals in Mayfair can range in price depending on how much you like to eat or drink and whether it is a cheap eats spot or a Michelin-starred restaurant. Eating out is typically where the most money is spent.

Here’s a general idea of what to expect:

  • Brunch will cost between £15 and £20, including coffee.
  • Bottomless Brunch will cost between £35 and £50.
  • Lunch will cost between £10 and £20 in a restaurant or café.
  • Dinner prices range from £15 to £50.

If you just need something quick for your lunch break at work, you can get a cheap Tesco meal deal for £3 or something a little fancier like Pilpel (falafel) or Barburrito for around £6.

Personal Hygiene

This cost is entirely dependent on your routine and how much money you want to spend. We’d add up your current personal care expenses and convert them to pounds so you can get an idea of how much this will cost you.

Overall, you can spend £44.32 per month on general personal care items on average.

When we talk about hair, we get to the most expensive part, if you love your hairs the most.

For example, if you want pink hair, you will have to pay a lot of extra money, which can easily amount to £200 per month.

Medical Care (Prescriptions, Dentist, etc.)

Despite the fact that we pay for the NHS with our taxes, there may be some costs associated with healthcare. Going to the dentist, for example, will incur costs for a check-up, teeth cleaning, and any other services you may require. If you do this on a regular basis (which you should), it should be factored into your budget.

  1. Make sure you register with an NHS dentist rather than a private dentist if you want to take advantage of the NHS caps.
  2. Teeth cleaning is not subsidized, so the cost ranges from £60 to £100 depending on the type of cleaning you choose.
  3. If you have any health issues, wear glasses, or anything else in this category, this would be added to your budget.
  4. For example, suppose you suffer from migraines and have a set of medications that you pay for every two months. Prescription costs are also limited; the current price for each item is £9.15. Because contraception is free in the United Kingdom, there will be no cost associated with this.
  5. We would budget £100 for dentist visits per year, plus any prescriptions, eye care, or other items you require.

Entertainment

All of the extra money can be spent on entertainment! According to a 2019 survey, people spend between £60 and £100 per week on entertainment (eating out, activities, events, etc.). Some people were wise and spent between £40 and £60.

It all depends on the week and what you’re up to. Depending on what you’re doing, you can allow yourself a weekly spending budget of £200 to £250. You may be able to save money in this area.

  • Tickets to the movies cost between £10 and £20 per person. If you enjoy watching movies, you can get monthly passes for £17.90, making it more affordable to do so.
  • Tickets for the theatre range from £20 to £100 per person. There are some good deals on theatre tickets available, especially if you don’t mind where you sit. Tickets to the Globe can be obtained for £5 if you are willing to stand for three hours.
  • Sightseeing – ranges from free to £30 per person, plus travel. Sky Gardens, for example, is free (watch this video for local tips), whereas the London Eye starts at £23. Exploring Windsor Castle would necessitate purchasing train and attraction tickets, bringing the day’s cost closer to £40 to £50 without food.

Is London Safe?

Despite the fact that the crime rate in London has been increasing, it remains a relatively safe city. In fact, the Economists Safe Cities Index ranks London as the fourteenth safest city in the world. In 2019/20, the crime rate in London was 101.48 crimes per thousand people.

Conclusion

So, this is how you need to spend on average. We hope that this article has helped you, and you can now pack your bags to move to London.

About the author

Indu has been educator since last 10 years. She can find all kind of scholarship opportunities in the USA and beyond. She also teach college courses online to help students become better. She is one of the very rare scholarship administrator and her work is amazing.