Cost of Living in London

London is one of the most exciting cities in the world — but also one of the most expensive. Whether you’re a student, professional, family, or expat planning to move, understanding living costs is crucial. In 2025–2026, with rents, energy prices, and food costs still at high levels, budgeting wisely is more important than ever.

In this guide, we’ll break down London’s living costs in detail — from housing and transport to food, utilities, and childcare. We’ll also compare London to other global cities and share practical money-saving tips so you can enjoy life in the capital without breaking the bank.

Housing in London: Your Biggest Expense

Accommodation is by far the largest cost for anyone living in London. Whether renting or buying, expect housing to take up 30–50% of your monthly budget.

• Average rents in 2025 (Numbeo, ONS, Rightmove):

  • 1-bedroom apartment in the city centre: £2,150/month

  • 1-bedroom apartment outside centre: £1,595/month

  • 3-bedroom apartment in the city centre: £4,400+/month

  • 3-bedroom apartment outside centre: £2,850/month

Rents have cooled slightly compared to the peaks of 2022–2023, but with London’s ongoing housing shortage and population growth, they remain among the highest in Europe.

• Buying property in London (2025 averages):

  • City centre: £13,350 per sqm

  • Outside centre: £8,100 per sqm

  • Average house price: £700,000+

📌 Tip: Consider outer boroughs like Harrow, Bexley, Croydon, or Havering if you want more affordable rents while staying connected by Tube or rail.

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Utilities and Bills in London (2025–2026)

Once you’ve secured a place to live in London, the next major outgoings are your household bills. These vary depending on your property size, location, number of occupants, and lifestyle. On average, utilities for a mid-sized flat (around 85m²) cost £250–£300 per month in 2025. Here’s a breakdown:

🔌 Gas, Electricity, and Heating

• Typical monthly cost: £150–£180 for a 1–2 bedroom flat.

• Larger homes or poorly insulated properties can see bills exceed £250–£300 per month, especially in winter.

• Despite wholesale energy prices dropping slightly since the 2022–23 crisis, costs remain 20–30% higher than pre-2021.

Money-saving tips:

• Install a smart meter to track real-time usage.

• Compare suppliers on sites like uSwitch or MoneySuperMarket — many Londoners overpay by £200–£400 a year.

• Use energy-efficient bulbs and appliances; even small changes (like washing clothes at 30°C) cut bills noticeably.

💧 Water and Waste

• Average water bill: £35–£45 per month for a standard household.

• Thames Water supplies most of London, and charges depend on whether you have a meter or pay a fixed rate.

• Households with fewer occupants benefit from a meter, while larger families sometimes pay less on a fixed tariff.

🌐 Internet and TV

• Standard broadband (60–100 Mbps): £30–£35 per month.

• High-speed fibre (500 Mbps+): £40–£55 per month.

• Bundled TV + broadband deals (Sky, Virgin, BT): £50–£80/month.

📌 If you’re moving to London short-term, consider rolling monthly contracts with providers like Hyperoptic or Now Broadband to avoid being locked into 12–24 month plans.

📱 Mobile Phone Plans

• SIM-only plans: From £15/month with 20GB+ data.

• Unlimited data plans: £25–£35/month.

• Pay-as-you-go SIMs are popular with new arrivals until they build UK credit history.

📌 Major providers include EE, Vodafone, O2, and Three, but budget networks like Giffgaff, Lebara, and VOXI often offer better value for international calls and data.

🏛 Council Tax

Council tax is often overlooked but can be a significant monthly cost. It’s based on your borough and property’s valuation band.

• Average range: £80–£200/month.

• Cheapest boroughs (Band D, 2025):

  • Westminster: ~£865/year (~£72/month)

  • Wandsworth: ~£980/year (~£82/month)

• Most expensive boroughs: Kingston upon Thames, Croydon, and Harrow, where Band D properties exceed £2,200/year (~£185/month).

📌 Students are exempt, and single occupants can apply for a 25% discount.

Food and Groceries in London

Londoners spend more on food than most UK residents, thanks to higher restaurant and grocery prices.

• Average monthly grocery spend:

  • Single person: £200–£400

  • Couple: £400–£800

  • Family of four: £600–£1,000

• Sample grocery prices (2025):

  • Milk (1L): £1.30

  • Bread (500g): £1.50

  • Eggs (12): £3.20

  • Chicken (1kg): £7.40

  • Beer (pint): £6–£7

Dining out is also pricey:

• Basic lunch: £12–£15

• Dinner for two at mid-range restaurant: £70–£85

📌 Tip: To cut costs, shop at Aldi, Lidl, or local markets. Use loyalty cards (Tesco Clubcard, Nectar, etc.) and meal-prep to save £100s per month.

Transport Costs in London

London has one of the best public transport systems in the world — but it isn’t cheap.

• Oyster/contactless (Zones 1–2):

  • Daily cap: £8.50

  • Monthly travelcard: £182

• Bus pass (weekly): £24.70

• Taxi (per km): £1.95

• Taxi (1-hour waiting): £30

• Cycling: Santander Cycles from £1.65 per 30 minutes

Many Londoners spend £150–£250/month commuting.

📌 Tip: Live closer to your workplace to save on transport. Or consider cycling — the city has invested heavily in new bike lanes.

Healthcare Costs in London

The NHS provides free healthcare, but you’ll still face some expenses:

• Dental check-up (private): £50–£100

• Private GP consultation: £60–£100

• Private health insurance (optional): £100–£250/month

If you’re an expat, you may need to pay the Immigration Health Surcharge (IHS) when applying for a visa — currently £1,035 per year for adults.

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Childcare and Education Costs

If you’re moving to London with children, budget carefully — childcare is one of the highest costs after rent.

• Nursery (full-time): £1,000–£1,800/month

• Childminders: £200–£250/week

• Nannies: £400–£650/week

• Au pairs: £90–£120/week (plus room & board)

• International schools: £15,000–£40,000/year

📌 Tip: Use UK government childcare support schemes (free hours for 2–4-year-olds, Tax-Free Childcare covering 20% of costs).

Personal & Leisure Expenses

London is full of things to do, from West End theatre shows to football matches. But leisure costs add up.

• Gym membership: £50–£60/month

• Cinema ticket: £12–£18

• West End theatre show: £50–£100+

• Haircut (men): £25–£40

• Haircut (women): £50–£80

📌 Money-saving tip: London has amazing free attractions — museums (British Museum, Tate Modern, National Gallery), galleries, and parks.

Salaries Needed to Live Comfortably in London

The big question: what salary is enough?

• Median UK salary (2024): ~£35,000

• Median London salary (2024): ~£44,300

But Londoners say you need at least £65,000/year to live comfortably, covering rent, bills, food, transport, and leisure.

• Living on £20k/year: Almost impossible without shared housing.

• Living on £30k/year: Doable with flat-sharing and strict budgeting.

• Living on £50k/year: Comfortable if you manage expenses.

• £65k+: Generally considered enough for a comfortable lifestyle in most London boroughs.

Comparing London with Other Global Cities

London ranks as one of the most expensive cities in the world, but how does it stack up?

• New York: ~40% higher rents, restaurants 16% pricier, but cheaper utilities.

• Milan: Rent 43% cheaper; groceries and restaurants slightly cheaper.

• Singapore: Higher rents and groceries, but cheaper transport.

• Dubai: Overall ~25% cheaper, including rent.

• Luxembourg: Rents 37% lower, food slightly more expensive.

• Melbourne: Rent 40% cheaper, restaurants 12% cheaper.

• Glasgow: Rent 60% cheaper than London.

• Geneva: Surprisingly, overall costs are higher than London except rent.

Comparing London with Other UK Cities

London is by far the most expensive place to live in the UK, but how does it compare to other major cities across the country?

• Manchester: Rent around 45% cheaper than London; transport and groceries about 25% cheaper.

• Birmingham: Overall living costs ~40% lower, with much more affordable childcare and housing.

• Leeds: Rent nearly 50% cheaper, restaurants 20–25% cheaper than London.

• Glasgow: Rent 60% cheaper; utilities and food about 15–20% cheaper.

• Bristol: Still expensive by UK standards, but overall ~30% cheaper than London, especially in housing.

• Edinburgh: Around 35% lower living costs, though property prices and rents are rising quickly.

👉 While salaries in London are higher, the gap often doesn’t make up for the extra housing and transport costs. For many families and young professionals, cities like Manchester, Leeds, or Glasgow offer a much more affordable balance.

Best and Worst Areas to Live in London (2025 Outlook)

Best/Family-Friendly Areas:

• Richmond – riverside, green, safe.

• Putney – affordable riverside living.

• Dulwich – leafy, schools, family-friendly.

• Kingston-upon-Thames – suburban comfort, great schools.

• Harrow – diverse, safe, good transport.

Up-and-Coming Areas:

• Hayes, Colindale, White City, Poplar, North Greenwich – regeneration, new housing, Crossrail links.

Areas with Higher Crime Rates:

• Camden, Brixton, Tottenham, Newham, Hackney (pockets only).

Practical Tips to Reduce the Cost of Living in London

Living in London doesn’t have to drain your wallet. Here’s how to save:

• Transport: Get an Oyster or contactless card; cycle or walk when possible.

• Housing: Share flats; look for up-and-coming areas with better value.

• Food: Shop at budget supermarkets, meal-prep, use loyalty schemes.

• Utilities: Switch energy providers; use smart meters.

• Entertainment: Take advantage of free museums, events, and parks.

• Discounts: Use apps like Too Good To Go, UNiDAYS (students), and voucher sites.

Final Thoughts: Can You Afford London in 2025–26?

London remains one of the most expensive cities in the world, with average monthly costs hitting £3,200+ for singles and £6,500–£8,000 for families. Rent and transport dominate budgets, but food, childcare, and utilities add significant extra pressure.

Still, with smart planning, it’s possible to live — and thrive — in London. Many residents balance costs by sharing housing, using public transport, and making the most of free cultural attractions.

👉 If you’re planning a move to or within London, BookAMover can help you save even more — by comparing local, vetted removal companies so you get the best service at the best price. After all, managing your moving costs is the first step to managing your London living costs.