Can you afford to live in London?

Photo of the Westminster Underground Station in London, with the Big Ben in the background

The incredible city of London - Who wouldn’t want to live here? We get why moving to London is a dream for many, but this decision, more often than not, comes with a hefty price tag. The city's high cost of living is the main reason why a lot of Expats decide to put their dream of moving to London aside. But, do you really have to? Can you afford to live in London?

In this post, we’ll explore the things that contribute to the high cost of living in London, and help you assess if you can afford them, to provide some insights into whether it's feasible for you to call this city your new home.

Understand your monthly costs for living in London

The first thing you’ll want to do is understand how much money you’ll need per month to live in the city. This will highly vary depending on your lifestyle habits, what you need the money for, and the type of accommodation you decide to rent.

To better understand this, let’s outline what would be the highest costs of your life in London be:

Housing Costs:
The most significant expense associated with living in London will be by far your housing. London rental’s market is at an all-time high right now, with so much demand and not enough offer, making prices extremely high. You should be prepared to allocate a substantial portion of your income to housing - The average Londoner spends over 50% of their income on rent. If this is not something you’re willing to do, maybe you should reconsider your move!

Having said that, there are ways to bring down your housing costs. House-sharing, is the easiest way to bring down your rental costs. But most importantly, the size and location of the home you choose to rent will greatly affect the price.

To put this into perspective, here’s the average cost of different house sizes in two very different areas in London

Home SizeNotthing HillWembley
Bedroom (House Share)£ 1,100£ 850
Studio£ 1,500£ 1,025
1-Bedroom Home£ 2,200£ 1,300
2-Bedroom Home£ 2,900£ 1,600
3-Bedroom + Home£ 4,300£ 2,000

On top of your rental, you’ll need to pay your house bills (gas, electricity, water, wifi, etc..) - So you’ll also need to budget for this on top of your rent!

London's has an amazing public transportation system - I can guarantee you can go wherever you want, whenever you want - but it's not cheap. The London Underground, buses, and trains are efficient, but the cost of commuting can add up quickly, especially if you’re living further from the city center.

The average commuting price in London, if you’re only using the Underground is about £5 per day, but if you’re taking trains this can easily double to £10 per day. You’ll have to keep this in mind when you’re deciding where to live, and making a budget for your move.

Cost of Leisure and having fun:
In addition to housing and transportation, the overall cost of living in London is high. Dining out, entertainment, and daily expenses are all more expensive compared to other cities in the UK and Europe. It's crucial to factor in these costs when determining if you can afford to live in London.

If grabbing your daily coffee out or clubbing every weekend are non-negotiables, you may need to compromise in other aspects to make your move to London feasible.

Check out our Cost of Living Calculator to better understand what these costs will look like for you, based on your lifestyle habits.

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Try the London Cost of Living Calculator

Understand Your Monthly Take-Home Income

For some, the decision to live in London is based on the opportunities it offers. The city is a global economic hub with a vast job market, making it an attractive destination for career advancement. High-paying jobs are abundant in sectors like finance or technology.

In order to understand if you can afford to move to London, you’ll need to of course understand what your earnings will be like. And to your surprise, they may be quite different to where you are currently living. To get a good idea of salaries in your field, start browsing for jobs in the city on corporate platforms like LinkedIn. You can also check out average salaries on websites like Glassdoor.

If you’re planning this move with a salary in mind already, make sure you’re understand of what your take-home income will be after taxes. You can Sign Up to Matutto to access our Taxes calculator.

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Try the UK Tax Calculator

Weight the Pros and Cons

At this stage you should already know your estimated monthly income and cost of living in London, which will help you answer the question of wether you can afford to live in the city.

However, it’s not all about money. When considering a move to London, it's vital to weigh the pros and cons carefully. On the positive side, London offers a wealth of opportunities in terms of career advancement, culture, and experiences. The city's rich history, diverse communities, and thriving job market can be enticing. Although it's equally important to acknowledge the downsides. The high cost of living, particularly in terms of housing and transportation, can put a strain on your finances. London's fast-paced lifestyle may not suit everyone, and the city's weather can be unpredictable.

Ultimately, the decision to move to London should be a well-informed one but is only yours to make! If you’re still concerned about the cost of living in the city, here’s some tips to reduce your spending when moving to London:

Tips to bring your London costs down:

1.Budgeting: Careful budgeting is essential. Prioritize your expenses by splitting in essentials and non-essentials. Make sure to track your spending to stay on top of where your money is going. This will be very important long-term to meet your financial goals.
2.Shared Accommodation: Consider sharing accommodation with others to split the cost of rent and utilities, especially in the early stages of your London adventure.
3.Commuting Living slightly outside of the city and commuting can help reduce housing expenses while still allowing you to enjoy the benefits of London. This is particularly useful if you don’t need to commute to the center every day!
4.Entertainment Choices: Be mindful of entertainment expenses. Enjoy free or low-cost activities. Things like going to the park, museums or signing up to council activities will give you plenty of things to do without spending a single penny!
5.Explore Income Opportunities: Make the most of the city’s opportunity by looking out for career growth opportunities from time to time. Be open minded about trying new things and believe in yourself!

Living in London is a mix of opportunities, excitement, and financial challenges. While the city's allure is undeniable, the affordability question is subjective and deeply tied to your individual circumstances.

So, what do you say… Can you afford to live in London?

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