Is London Expensive? Here is Your Cost of Living Guide!

January 8, 2020
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Is it expensive to live in London? Well, as one of the top cities in the world to live, I wanted to share with you the insights of whether or not living in London is expensive.

First, let’s talk about salaries and housing.

The average salary in London is £34,000, while the average house in London costs around £460,000 to purchase, which means it’s around 13x the average salary, given that the average cost of homes in the whole of the UK is at 7.7x, you can see by this chart how much the affordability gap has grown over the years.

Affordability gap - chart of house prices

Most lenders typically won’t lend more than 4.5x salaries so that suggests that London workers would need to come up with significant deposits to purchase a home or look to move outside the centre of London, which is what many have to to.


If you decide to rent in London, you might still be challenged as well. Average rents in London are currently at £1,665 per month, with most lettings and tenant referencing services wanting to make sure that your salary is at least 2.5x annual rent. So with a monthly rent of £1,000 you would need to make at least £30,000 per annum. As you can see once again the disconnect given that the average salaries are £34,000, which is why so many young professionals are having to share accommodations. Don’t forget the other costs associated with housing which also include utilities, broadband, TV license, council tax etc. obviously what you pay for housing will also determine what your transport costs will be, and this leads us to the next point.


Travel costs in London.

Transport costs in London are generally conceived to be high, but perhaps that’s relative. Growing up in America, I remember relying mostly on having to drive most places, and that includes fuel costs and other maintenance costs of owning a car and insurance, plus everything else that are required.

The easiest way to explain is to actually look at London as far of the London tube map. Technically, the tube system has 9 zones, but most of it is in zones 1-6. Central London is in zone 1 and is the most expensive in terms of housing, but that’s also where a lot of the employers exist. Zone 2 is the next ring route, with zone 1 and zone 3 creating rings around zone 2, and so on, so if you can’t afford to live in zone 1, you’ll definitely need to consider commuting into zone 1 if that’s where you work.

London tube map with zones 1 to 6

For me, I think London is actually very good value relative to its transport cost, but I do use the transport system quite a bit, so maybe I’m maximising the efficiently of my value of the cost. If you’re going to commute via the tube, the overground, or bus network, the most economical way to do it is to have an Oyster card or a monthly pass on your smartphone where you can tap in and tap out.


As an example, a monthly Oyster card which allows you to travel between zone 1 and 2 is £7 per day, and £134 per month, or £1,404 per annum, and that’s actually recently just gone up at the start of the year. Now, say for the sake of trying to save money on housing costs you decide to live further out to zone 4, and you need to commute to zone 1, it will cost you £10.10 per day, £194 per month, or £2,020 per annum.

If you can restrict your journey to say just buses or cycling, you’ll definitely be able to save money on your transport cost. If you want to know more about your transport options in London, I have created a video sharing all of the options to utilise in the city.


The cost of food in London.

I actually think the cost of food in London is actually pretty reasonable, and you have lots of food choices throughout the city. Obviously, if you want to go out every day, it’s going to be a cost consideration, but London is set up as such that if you’re in most zones and you’re coming out of a transport system area such as the high street, you’re going to have plenty of bodegas and grocery stores to choose from, for you to pick up your groceries on a daily basis.

If you are able to make and prepare your food at home, there are lots of options to choose from, at the top end there are grocery stores such as Waitrose, Selfridges and Harrods, which have large food halls and you can definitely be spending more at these places for your staples and the food items you need.

At the lower end you’ve got places like Lidl and Aldi, who are opening lots of stores on high streets these days.

At the medium range you have Sainsbury’s, Tesco, and M&S which will have plenty of food options for you.

One of my favourite places to pick things up is Poundland – you’d definitely be surprised at the amount of things that store offers and stocks on a regular basis!

The Bodega is definitely a place I recommend going to to pick up fresh groceries on a daily basis to get everything I need to prepare my food. Bodegas are really helpful as there are lots of flats in London which may be quite small and have small refrigerators, so not allowing you to really get things in bulk, so the bodegas or local grocery stores and shops will definitely be able to stock what you need.

local bodegas in London

For key staples:

Pint of beer – £5-£6

Cup of coffee – £2-£3

One course, mid-range meal with wine – £25-£30 per person

Three course meal, at a mid-range restaurant with wine – £50-£60.


Now that we have covered the basics, let’s talk about entertainment. 

For the average movie or cinema ticket, you’re going to be paying £13-£17 per ticket. I personally love going to museums and galleries, and one of the great things about London is that most of them are free to visit. There are regular exhibitions which you may have to pay for. There are plenty of cultural things to do, so just make sure that you’re proactive about finding what’s happening on a regular basis, or sign up to my monthly newsletter which includes features on things to do around London.


One of my favourite things to do is walking around central London or different neighbourhoods because you’d be surprised that the things you can discover that are happening on a one-off basis on any given day throughout the week! There are also activities at all different ranges and budgets.

If you are a play or theatre-goer, there’ll be the high end West End productions of the likes of Hamilton or The Lion King, but there are also so many incredible off-West End smaller theatres that have fantastic productions that are really worth checking out.


In summary, London is definitely an expensive city because of its global appeal, and being a world-class city. It’s a capital city and therefore, compared to other global cities, it definitely can be pricey to live and work here, but it has so much appeal. I work with many foreign clients looking to buy in London because of the world-class education systems, the cultural institutions, the rule of law, the ease of transport, and access to other global cities. With that that means that demand can be relatively high and locals might struggle to make ends meet, but it doesn’t mean that you can’t find ways to enjoy London on any kind of budget that there is.


I hope this has given you some options on things to consider and the different budgets, and do comment below the ways you enjoy London or the city you live in.

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