It's no secret that the average cost of living in London is one of the highest in the world. Before we moved to the US, I did a lot of research on monthly expenses in London. Knowing what to do on a budget was very helpful, especially when it came tofind a flat in londonthis would not cost 70% of our salaries!
Now that we've passed thefirst year living in London, I can also share my opinion on the various monthly (and some yearly) costs. But before we get to that, here are a few things to keep in mind:
- No two people have the same cost of living in London. If you keep your apartment warm in the winter and also work from home, your gas and electric bill will be much higher than a neighbor who spends most of the day outside and wears layers to keep out the cold.
- I will give some specific examples from my own life where they make sense. But for things like rent and transport, which vary greatly by neighborhood and workplace, I'll offer ranges and links to additional resources on cost of living in London.
- Your monthly rent will eat up a large part of your income.Always plan your housing budget after calculating the cost of your other monthly expenses.
- Now that the UK is no longer a member of the EU, we are seeing changes in the prices of rent, groceries and other imported goods. Coupled with dramatic increases in energy and food prices, it has become even more expensive to live in London than it was a few years ago.
- If you live in a house/apartment, remember to split utility costs accordingly.
With that said, here's what you can expect in terms of monthly spending in London.
This post contains affiliate links. As an Amazon Associate, I earn on qualifying purchases. For more information,Click here.
RELATED:The Ultimate Checklist for Moving to London
What is the average cost of living in London per month?
Based on my personal experience, as well as data from Numbeo and Expatisan,the average cost of living in London per month in 2023 is £933 for a single person, not including rent.
While the shift to remote work and financial sector job losses due to Brexit have pushed prices down in London's Zone 1 and 2 boroughs, prices started to recover in mid-2022. from London it ishotter than ever, with demand exceeding supply and properties coming off the market at higher than asking prices.
As I mentioned, rent is an expense that varies so much that it doesn't make sense to include it in this calculation. I'll go into more depth on that cost later.
If you're moving to London with a partner, you're not just spending £933 to cover your monthly living expenses. Why not? Because some costs do not increase (eg internet) and others only increase 30-40% (eg gas).
So what exactly is this money paying you for? I will go over each item of the budget in detail below. But first, I'll cover what will surely be your biggest monthly expense (because I know you're curious).
RELATED:Moving to England from the US: 10 Tips for Americans
Cost of living in London 2023: monthly expenses
According to HomeLet,the median rent in London was £2007 in January 2023. But depending on where you live in London, a one-bedroom apartment can cost anywhere from £1,200 to £2,000 or more per month.
When considering the average London salary in 2023it's £40,000(before taxes), it's no wonder so many city dwellers end up sharing a flat.
High rents are the main reason why the cost of living in London is so high. But it's also the expense that's most in your control.
You can pay £2,500 a month to live in a charming room in Hampstead, or pay £700 a month for a shared house in Zone 3 and use the remaining money for travel, food, future savings, etc.
And youmoved to London from the United StatesYou've probably heard the budget rule that your housing costs shouldn't exceed 33% of your income. It's a rule we've always followed when renting and buying in the states, and it's served us well.
So you can imagine our concern when we learned that the average Londoner spends almosthalf of your rental income!
Unless you come from a similar cost of living area, this might come as a surprise. But as long as the rental market remains buoyant, prices will continue to make you cry.
These are some of the factors that can increase or decrease your monthly rent:
- Housing type:From shared flats to three-bedroom houses, you'll find all kinds of accommodation in the city. Of course, it is cheaper to rent a single room in a shared house than a studio in a full-service building.
- Zone:London is organized into rings of transport zones. They radiate from central London (Zone 1) to the suburbs of Zone 9. In general, the higher the zone number you live in, the less you'll pay in rent for similar properties (but your transport costs will go up too).
- Neighborhood:Everyone wants to live in elegant Kensington or trendy Shoreditch. But your money will go a long way in places like Clapham and Islington. you can check thisLondon rental mapto find out which neighborhoods fit your budget.
- Proximity to a metro/train station:Landlords charge a premium for rentals within walking distance of a station. Taking a 15-20 minute walk to the nearest train/subway station can save you 10% or more.
- Facilities:Things like modern kitchens, garden access, and furnishings affect the rental rate. There are apartments on my street with the same floor plan as mine, but the rent is £200 less a month because they haven't been updated in 10 years.
Already feeling overwhelmed?
See my step by step guide onfind a flat in london! It covers everything from choosing the right neighborhood to negotiating rent with landlords.
Most landlords in London will require you to take out renters insurance as part of your tenancy agreement. We were required to provide proof of our insurance within 30 days of moving into our apartment.
Renter's insurance covers the value of your possessions, so you're not paying to insure the property itself. Fortunately, that makes it quite affordable.
You can expect to pay around £10/month for a rental insurance policy.The exact amount will depend on the value of your things and whether or not you have insurance for special items like expensive jewelry.
Keep in mind that your insurer may offer an annual payment plan instead of a monthly one. It's often a bit cheaper to pay for the entire year in cash, which is what we do.
an incredibledifference between living in the US and the UKit's how easy it is to compare prices on things like insurance, broadband and energy.
we use theuSwitchsite to find the best deals from service providers in our area. I suggest you do the same to get the most out of your monthly budget.
Gas and Electricity
In London, gas and electricity will normally be provided by a company. And unless your location has a modern energy meter that charges for exact usage, you'll need to submit meter readings every few months or pay a flat rate.
By submitting periodic readings, the power company will have a better idea of how much you should pay based on your usage. This will prevent you from paying too much each month and having unused money in your account, or paying too little and receiving an adjustment bill.
The fixed price comes from taking the average cost of energy over the calendar year and dividing it by 12. If you just moved into a new location, they will use as much energy as the previous tenants used.
For a 1 bedroom apartment you can expect to pay around £143/month for power from January 2023.Of course, the exact amount will vary depending on whether you're in a basement or top-floor apartment, whether your windows are double-glazed, whether you do a lot of cooking at home, etc.
There has been a lot of pessimism surrounding energy price increases as we head into winter 2022-23. While the government temporarily suspended energy price increases and issued payments through local councils to help ease the burden of costs this winter (especially for low-income households), theOfgem price limitIt is still expected to rise in April 2023.
Like many European countries, gas is much cheaper than electricity (about 3 times cheaper). Therefore, an all-electric apartment will have higher energy bills than a traditional combination of gas and electric.
For the record,we currently pay £180/month for gas and electricity in our tiny 3 bed house.
However, that could very well rise to around £250-300 once the top price is raised this year.. While we work from home and do a lot of cooking, we also travel a lot and have a good amount of natural light. And I'm somewhat frugal when it comes to heating the house in winter...
Additionally, most areas have multiple gas and electric service providers. help himSave money living in London, go online and compare prices to see which company can give you the best deal.
RELATED:The best budget app for expats.
Most of the city is served by Thames Water, so there's no shopping for that monthly expense in London. There are two different types of water bills: metered and unmetered.
If your apartment has a water meter, you'll pay for exact usage, plus a flat fee for things like sewage. If you don't have a water meter (we don't), you'll pay a certain amount based on the "billing area" (ie, neighborhood) where you live and the size of your property.
You can see a breakdown of the costs in theThames Water website, including prevailing rates for unlimited connections.
Plan to pay £20-30/month for water.If you have a limited connection and take a lot of baths and showers, you will pay more accordingly.
Thames Water has various payment plans ranging from weekly to yearly, so you won't necessarily be paying a bill every month. Our bill comes in annually, but we reserve money every month for the day we receive the annual bill.
Save me for later!
Good news: your broadband costs will be good and predictable month to month! What you pay will mainly depend on the speed you want.
One of theAdvantages of living in Londonis that most neighborhoods have multiple broadband providers. And the competition between them means you can get great download and upload speeds for a great price (at least compared to the US). There are also discounts for bundled items like TV and cell service.
Our internet bill is around £35/month.We have a medium speed package with a minimum download speed of around 50 Mbps and that's enough for two people who like to game and stream in HD.
As with housing, your monthly transport costs in London vary greatly depending on where you live. Rent may be cheaper in Zone 5 than in Zone 2, but transport fares to central London will be nearly double.
Most Londoners don't drive. Instead, we rely on public transportation to get around, be it the bus, subway, or train.
I could fill an entire blog post on how public transport works in London, so I won't do it here.
Just know that most people who need to travel between zones for work buy a monthly or annual travel card. Travel cards are like passes you add to your Oyster card that give you unlimited travel on buses, trains and tubes within certain zones.
Just as an example: a monthly travel card for Zones 1-3 costs £174/month in 2023.One ispractical flat rate calculator and travelcardto find out your personal monthly travel cost.
Driving in the city is a big hassle and one of thethings i hate about london. Most people who live and work in London don't need a car unless they have multiple children or need to travel across the country for work.
If you only need a car for a trip or the occasional IKEA vacation, it's cheaper to rent one. Zipcar is ideal for day rentals.
Competition between mobile services in the UK is so fierce that prices have been cut. Coming off US$60 cell phone bills, I was jumping for joy when I bought my UK SIM card.
I pay £15/month for 5GB of data, 1000 texts and 500 minutes of talk time.I can even use my data in several European countries without paying a fee.
Many Londoners (myself included) opt for prepaid plans over annual contracts. This gives you the freedom to switch providers whenever you want and upgrade or downgrade your services as needed.
Food expenses are one of those monthly expenses in London that depends a lot on your tastes and habits. If you visit the farmers market for organic produce every week, your grocery bill will be much higher than a thrifty shopper who buys everything at Lidl.
And if you don't like to cook (or your apartment doesn't have much of a kitchen), you can spend most of your money dining out instead of buying groceries.
Pro Tip for Expats:Figuring out where to shop in London can be tricky, especially if you didn't grow up in the UK. I wrote a detailed guide onlondon supermarketsto help with that!
Expat.com also has auseful guideto buy food in London.
Now, I realize that none of this is helpful when trying to estimate your food budget in London! So let's say you cook most of your meals at home and bring your own lunch to work most days. And let's also assume that you shop at Sainsbury's, a medium-sized grocery store.
In that case, your monthly grocery bill for one person will be around £200-220/month.We spend around £500/month for two people fitting the above description.
Again, there are many factors that can make this number higher or lower for you. I suggest being conservative with your initial budget and tracking your grocery expenses in the first few months to adjust as needed.
Go out to dinner and at home
In a city with thousands of fantastic restaurants and multiple delivery services, it's easy to spend big in this area. As foodies who enjoy trying new cuisines, dining out and delivery are some of the biggest influences on the cost of living in London.
In 2023, our average takeaway order was £35 (plus £2 tip).We don't dine out often, but when we do, it's near theAverage cost of £35 for a mid-range meal in London.
Another sneaky cost to consider is coffee. Many Londoners have a morning drink on their way to work, and this adds up quickly.A cappuccino from a local cafe will cost around £3-£4depending on the location.
Instead of offering a monthly budget amount, here's what I suggest:see what you currently spend in this area and add 20%.
While groceries are quite affordable in London, restaurant prices are quite inflated. And nowhere is this more true than in drinks.It's not uncommon to pay £6 for a pint and £12 for a cocktail.
If you're looking for delicious food that won't break the bank, check out my guide oncheap food in london.
Toilet paper, cleaning supplies, washing powder… these are things we all have to buy, but often forget to budget for!
We spend an average of £30/month on household items.I found that the prices for these types of items are comparable to those in the US.
This is one area that has no routine monthly costs. But if you're serious about budgeting, you should set aside a monthly average of your yearly personal care expenses.
My personal care expenses in 2022 averaged £50 per month, and I expect that to continue in 2023.This included haircuts, a fancy spa facial, some makeup, and various skin care products.
Before we moved to London, I made a spreadsheet of all our hair and beauty products and calculated the costs of the haircut in GBP. I even include an annual facial! And then I divided that number by 12 to get my average monthly personal care cost in London.
For my long thick hair, I spend around £55 on a haircut and style. My husband gets a standard men's haircut for around £25. Coming from a major US city, we spend around 10% more on haircuts in London.
Interestingly, I buy most of my beauty products during our return visits to the United States. But that's only because it took me years to find products that would work for my sensitive skin, and many are not sold in the uk.
From Netflix to theater tickets, this category is all about having fun. And we all have our own ways of spending our free time, so I can't presume to put a number on that monthly expense.
The vast majority of our "entertainment" spending goes toward travel. We don't spend much on anything other than the occasional video game and our streaming subscriptions.
Whatever your circumstances, be sure to budget for recurring costs.: streaming services, satellite TV, video game subscriptions, etc.
I have to say, there are plenty of cheap and free things to do in London, from visiting amazing museums to seeing a comedy show in a pub. So if you're stressed about money, know that you can find plenty of entertainment options in London that cost little to nothing.
Last but not least, you have “other expenses”. For me, that includes things like pet supplies, dry cleaning, shopping for clothes, gifts, and teeth cleaning.
I suggest examining your current spending in these various areas to inform your London budget. Coming from the US, most of these things were comparably priced.
However, clothes in the UK are around 20% more expensive than in the US. Keep this in mind if you like to buy new clothes all year long!
Summary of monthly living expenses in London in 2023
Looking for the tl;dr version of the cost of living in London? Here is a useful reference table:
|Rent (1 bed)||£ 2.007|
|Mobile phone||£ 15|
|dine out/delivery||£ 170|
|personal care||£ 50|
|total monthly cost||£ 2.914|
Remember: these costs are an average per month! Most people don't exactly spend £50/month on personal care: it could be £0 for 3 months and £100 the next.
In addition, you can drastically reduce this monthly cost if you decide to share an apartment/house, since you will be saving on rental costs and sharing utilities.
Want more travel and relocation tips?
Become a member of my Patreon group to get exclusive access to my library of resources, including:
- Printable Packing Lists for Moving and Travel
- tips to save
- Internal travel guides
- Is much more
Annual cost of living expenses in London
In addition to your monthly expenses in London, you will need to pay a few bills each year. This is what you can expect.
In the UK, tenants are also required to pay council tax, which is like property tax. Sometimes landlords pay for you and simply add the cost to your monthly rent. But typically, you'll receive an annual bill in the mail that you're responsible for paying.
The amount you pay depends on your neighborhood and the value of the property.KFHhas a handy council tax tool that shows tax ranges by district. Fortunately, students do not have to pay city taxes and individual occupants receive a 25% discount.
City tax can be very expensive, so do your research before you sign a rental agreement! We used to live in one of the cheapest council tax districts and still paid over £1000/year.
If you own a television in the UK, you must pay an annual television license fee (ie "TV Fee"). This fee helps pay for streaming TV and free services like BBC iPlayer.
In 2023 a TV license was £159/year.
This fee increases slightly each year (usually around £1.50) to compensate for inflation.
Make surepay your license feeas soon as you buy a TV or bring one from another country. There are hefty fines for not registering your TV.
Manage your money abroad
Readers often ask me how I transfer money between international bank accounts without paying high fees. Fortunately, there is an easy and inexpensive solution:
I first used Wise (formerly TransferWise) when we needed to pay our fixed deposit in London, and it was MUCH simpler and more cost-effective than doing an international wire transfer from my bank. Nowadays I regularly use Wise to send money from my UK bank account to my US accounts.
Since I get paid in multiple currencies, I opened oneWise account in multiple currencies, which allows me to send and receive money in more than 40 different currencies. It even comes with a multi-currency debit card!
Open a Wise account todayfor real exchange rates, fast transfers and ultra-low fees.
I hope this helps you calculate your monthly expenses in London!
For more help on relocation, check out my detailed guideMoving to the UK guide.