OK, so no one would ever say that the cost of living in London is cheap, but as millions of people manage to do it every year, then it’s obviously possible to do!
And whilst you can find plenty of resources online that attempt to explain the cost of living in the city, very often these are confusing and don’t seem to tell you in simple to understand terms.
So, we’re going to put that little issue right by explaining exactly what you can expect to spend out on essentials per month when moving to the UK capital.
We all need a place to call home. The two choices you have are renting a property (or room), or you want to buy.
Let’s look at purchasing first. According to the latest figures provided by Land Registry Data, the average price of purchasing a flat in Greater London is £438,634 (as of July 2015).
Of course, depending on the area of London you choose, you can find properties that vary wildly from this price. The area of Barking and Dagenham is the most affordable places to purchase a home, with the average price of flat here coming in at £274,173.
If we look at the average purchase price of property (£438,634), then a 100% mortgage over 25 years with an interest rate of 3.5% will set you back £2,193 per month (on a repayment mortgage). This lowers to £1,278 per month on an interest only mortgage.
Of course, there are ways to lower this cost – firstly by having a deposit to put down. Let’s call that a conservative 30% – if you’re looking to buy, then there’s a high possibility you’ll be selling a property to do so.
In addition, you can extend your mortgage to, say, 30 years. This would bring a repayment mortgage down to £1,343 per month and an interest only mortgage down to £872.
When it comes to renting property, the latest figures released by a data survey carried out by Homelet show that the average rental figure in London is £1,500 per month – not cheap by anyone’s standards.
If you want to lower these costs, then renting a room in a shared house or getting a flat mate is the way to go. Easy Room Mate and Spare Room are two websites that match people together, with hundreds of thousands of users looking on a daily basis.
It’s difficult to give an exact figure on how much you’ll spend on food per month. It depends on your likes, dislikes, how much you cook, and whether you rely on pre-packaged meals. In general, for a person who wants to eat well but will do a fair amount of home preparation of meals, allow between £230-£275 per month.
Utilities include such essentials as gas, electricity, council tax, broadband, water, TV, and telephone. According to data from websites Expatistan and Numbeo (who provide real time updates), for an average size flat (of 85 square metres), you can expect to pay around £137 per month for a single person. For a couple, budget for around £175.
In essence, these websites direct you to the various providers and you then shop in the usual way. Any commission that would’ve been earned by the website is instead paid to you. Shopping in this manner for utilities can see you earning back hundreds of pounds, so is definitely something to consider.
For the very reason that the wonderful transport system in London means that it’s not necessary to own a car (along with serious difficulties with parking, congestion, and charges), we’ll look at the expected monthly outgoings for commuters solely using the tubes, trains, and buses.
London’s public transport system is run by Transport for London, and that means you can travel the length and breadth of the city, either overland by bus or at subterranean level using the tube. The cost of a monthly season pass to use all of London Transport’s options (as of September 2015) will set you back £128 per month.
No matter how much you’re budgeting the funds, we all need a little bit of R ‘n’ R, that’s for sure. Of course, whether this is chilling on a blanket with a picnic in a park or living it up at a Michelin starred restaurant will depend on both personal choice and your available budget.
Looking on the lower edge of the scale (particularly applicable for students), you can allow around £40-£70 per month for basic entertainment.
This is an expense that we all need to consider, and includes such items as toilet rolls, toothpaste, over the counter medications, deodorant… You get the drift.
Once again, this will depend on your choices, as someone who wants to use higher end cosmetics will naturally spend more per month than someone who purchases from supermarkets or chain pharmacies (such as Boots).
In general, allowing around £20-£35 per month to cover such expenses should be all that you need.
With all of these average costs having dramatic swings from the highest to the lowest, it always pays to shop around in every aspect.
For example, you can determine the cheapest area of London in which to buy or rent property at London Property Watch (updated daily).
Deals on entertainment, such as restaurants, days out, and other activities can be found on websites such as Groupon and Voucher Codes. In fact, if you register with some popular chain restaurants (such as Pizza Express, Loch Fyne, or Ask Italian), you’ll receive deals on a regular basis direct to your inbox.
All of the above are London savvy ways to bring down the average cost of your monthly outgoings – and it really is possible to save a substantial amount doing so.
The amount of time it takes to search out the best deal will definitely be time well spent, and just think how much fun you can have spending the money you’ve saved on something you really desire…