Cost of Living in London

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London is a notoriously expensive place to live – the city was ranked 17th out of 227 cities analysed in the Mercer Cost of Living Survey for 2023.

The UK capital is a city full of opportunities, but expats need to have a full understanding of the cost of living in relation to the salary they’ll be earning to ensure they budget accordingly.

Transport, although efficient, can be rather costly. Lifestyle, entertainment and shopping, however, can be tailored to accommodate various tastes and budgets, and there are plenty of ways to save money in these areas.

Cost of accommodation in London

The majority of expats living in London tend to rent property rather than purchase. The cost of rentals can be eye-watering, especially in the more sought-after areas and suburbs. Space is limited in the suburbs close to the city centre, though fortunately, London’s public transport network is excellent, making commuting easy and considerably widening accommodation prospects.

Larger properties with gardens are more readily available on the city's outskirts, and the further away from the city centre one searches, the more affordable housing becomes.

When looking for accommodation in London, prospective tenants should also budget for utilities, such as electricity, gas and water, along with council tax, as these tend to be excluded from the quoted rental price. Moreover, house hunters will need to account for a five-week rent security deposit as part of their initial costs.

Cost of transport in London

London has an extensive transport network. Public transport includes the Tube, buses, trams and taxis. But getting around can also become expensive, especially for those who live in outlying suburbs. The best option for people commuting regularly is to buy a monthly or annual travel card.

There’s little need to purchase a car in London, but those who wish to drive should factor in the high costs of parking, especially in central areas. Additionally, drivers entering central London will be subject to paying a congestion fee over and above their car’s service, insurance and maintenance costs.

Cost of education in London

Expats in the UK can send their children to a state school at no cost. There are plenty of exceptional state schools, but the standard varies, so it’s essential for parents to research the various options thoroughly. Nonetheless, it is definitely an option worth exploring, especially for those planning to settle in the UK.

Those who wish for their children to continue following the curriculum of their home country will find that London is home to the largest selection of international schools in the UK. Expats should note, though, that fees at British private schools and international schools can be exorbitant, and these institutions tend to be oversubscribed due to the excellent standard of education they offer. Wherever possible, expats moving to London should attempt to negotiate an allowance for school fees into their employment package.

Cost of entertainment and eating out in London

London plays host to excellent entertainment offerings. From world-class theatres and music venues to museums and art galleries, there is truly something to suit all tastes. Those who want to try out the most exclusive establishments in the city can expect to pay a small fortune for the privilege, but those on a tighter budget will also be catered for.

Plenty of places offer special deals and last-minute offers where one can attend some of the best events at a fraction of the usual prices. When it comes to eating out, London has countless options, from fine dining at Michelin-starred restaurants to hearty street food.

Cost of groceries in London

The cost of groceries in London largely depends on expats’ dietary preferences and where they shop. London is home to a fair few discount supermarkets such as Lidl, Aldi and Asda, where expats can get the essentials at cheaper prices than at stores such as Marks & Spencer and Waitrose. Ultimately, expats can save money on groceries by planning their meals, buying in bulk and partaking in coupon systems to get further discounts.

Cost of healthcare in London

Although the UK’s public health system does suffer staff shortages and long waiting times, expats who are residents can use the National Health Service (NHS) to access good quality healthcare in London. Depending on the type of visa an expat holds and the length of their stay in London, they may have to pay a surcharge of between GBP 470 and GBP 624 to access the NHS. Expats who will not have access to the NHS or those who would like to forego the long waiting times can also access private healthcare at a cost.

Without health insurance, this can be quite pricey, so it’s essential that these expats purchase health insurance in London. The cost of health insurance will depend on a variety of personal circumstances, such as health status and lifestyle habits, as well as the level of coverage. Generally, health insurance costs will range between GBP 85 and GBP 125.