Well, no one can deny that the cost of living in London is expensive. However, one thing that’s in a Londoner’s favour is that the wages in the capital city are, in general, higher than anywhere else in the country.
The latest government study showed that property prices (or rental prices) were the biggest reason that London was such an expensive place to live. But by doing your homework and not moving to the very centre of the city, then it’s possible to live in an area of London that won’t completely drain you of all your spare cash!
Housing costs
You might be lucky and have secured a job with accommodation included. But for many people moving to London, the first item on the agenda is searching for a suitable place to live. Average property prices for all areas of London can be found on the website London Property Watch. You can see from here that there are massive differences on both rental and purchase prices, depending on the area of London you’re looking at.
For instance, a three-bedroom property in W1, Central London, will cost an average of £2,959,000 to purchase. Whereas if you choose to live in East Ham or Bow, then a similar size house would cost £261,000. And the same differences apply to renting a property, with a three bedroom house in Central London costing an average of £1,355 per week, but in Catford would cost £317 per week.
Other good websites that list properties and average prices are Zoopla and Rightmove.
Further details about searching for a suitable property, including options about shared accommodation, lodgings and bed and breakfasts, can be found on our House Hunting page.
On-going cost of living
Once you put the cost of property purchase and rent to one side, then other on-going costs are important to understand.
For instance, wherever you live you’ll need to pay for your utilities. Water, electricity, gas, TV, telephone, broadband and council tax are something that everyone has to pay. Other outgoings will include transportation (public transport and/or car ownership – including car insurance and fuel), house insurance, health insurance, food and grocery shopping, school clothes (if you have children)… The list goes on.
Of course, you’ll be used to budgeting your income and outgoings at home, but when moving to a different country it’s important to know exactly what kind of bills to expect. That way you don’t get hit with any nasty surprises.
Utility bills – power and heating
Looking at utility bills, there can be a huge difference depending on which provider you go with. It’s hard to say what the average cost of power and heating your home will be, as this is dependent on the size of the property, how many people live there and how frugal you are with usage.
When it comes to electricity and gas, there are many different providers. These include Npower, E.ON, British Gas and EDF. Price rises for gas and electricity are an on-going issue in London and the UK as a whole, however it’s perfectly acceptable to switch supplier to the one offering the best deal.
This is easily done by using one of the many price comparison sites that will show you who’s offering the best rates and deals. Such sites include USwitch, Which, Money Supermarket and GoCompare.
Alternative heating
Another method of heating your home and water might be oil. In this case the property will have an oil tank situated in a (hopefully) unobtrusive position, usually at the side of the house or somewhere in the garden. This will then be used as the fuel to fire up the central heating and hot water. The price of oil is on a par with gas or electricity, and currently can be bought at around £0.68 – £0.70 per litre. For a three-bedroomed home, a 1000 litre tank would, with average consumption, need to be filled up 3-4 times per year.
Water
Every property pays both for the water used and a contribution towards sewerage costs. In London the water supply is provided by Thames Water or perhaps Veolia. Unfortunately you can’t switch suppliers of water, and the costs are what they are. However, many properties are now fitted with a water meter, and this usually proves to be the most cost-efficient way to be monitored. Most people report a reduction in their water bill once a metre has been fitted.
According to the Water Services Regulation Authority, the average water and sewerage bill for the year 2011-2012 in the London area was £319. This was an increase of 4.1 per cent over the previous year.
If you purchase or rent a property where a water metre is not already fitted, then you can contact the water company and request that one be installed.
TV, phone and broadband
The cheapest option for these utilities is to purchase what’s known as a ‘bundle.’ That way you have a single bill for the three utilities, and many include free calls, unlimited Internet and a multitude of TV channels. You can often manage to get free calls to your home country included in deals such as these as well, which can prove extremely cost-effective.
Of course, if you prefer, you can purchase each individually, but it’s a popular way to buy and the best deals can usually be found this way.
There are various providers of these packages. They include BT, Virgin Media and Sky. Each varies slightly in what they offer, but all will provide you with your fixed phone line, broadband (ADSL) and a package of TV channels.
If you don’t require a paid for TV service, then you can just take a phone and broadband offer from one of the many companies that offer this, and perhaps have what’s known as a ‘Freeview’ TV box (or integrated TV). This gives you the free satellite channels with no on-going monthly bills. See the Freeview website for more details.
Get cash back for purchases
As we’ve said in various places throughout this website, you can’t beat the advice of locals. And a top tip from one who lives in London is this. When you purchase any new utilities, such as your TV/Phone/Broadband package, or other items such as flights, insurance, electricals etc, then do so using one of the cash back websites.
Sites such as Top Cashback will link you thorough to the suppliers website, but instead of them claiming the commission every supplier pays an agent, this is instead paid to you. The amount you get back can be quite considerable, and there are always different deals being offered as incentives. For example, one user got £180 cash back on signing up to Sky TV, and £50 when taking out a new mobile phone contract.
Council Tax
No matter where you live, whether you purchase a property or rent a property, you have to pay council tax. The amount depends on the location and size of the property, and is not dependent on how many people live there. However, for a single occupant of a property, a 25 per cent reduction in the total amount will be given.
The annual cost of council tax ranges between £628.93 to £1572.32 – and full details can be found out on the City of London website.
Council tax goes towards the local council services such as refuse collection and street lighting, as well as funding the police and fire service. It can be paid in a lump sum, in two instalments or in 10 monthly instalments. There is no charge for paying on a monthly basis.
Shopping
Grocery, food and other essential shopping can be carried out in a variety of ways. Very often the cheapest way to do this is via the Internet, but deals can be found physically visiting shops as well.
Over the past few years, food prices have increased quite dramatically. This has led to a huge rise in the popularity of cheaper food store options, such as Aldi and Lidl. Both are German food stores and can now be found all over London and the UK. Their popularity has led to a price war amongst the other major supermarkets, which now do their utmost to price match at least a proportion of their wares with these budget stores. More information on the best places to shop can be found on our Shopping page.
Transportation
Many Londoners cope more than adequately without a car, thanks to the excellent public transport system. However, if you do wish to purchase a car, then think carefully about where you’re going to live, because parking in London can be extremely difficult.
The price of fuel is rising on virtually a weekly basis, with a litre of unleaded petrol currently costing between 137.9 pence and 139.9 pence. Diesel comes in between 144.8 pence and 146.6 pence. (Source, www.theaa.com)
For more details on the best way to get around London, and the different options available to you, see our Travel and Getting Around pages.
Need more information?
Delve further into all aspects of life in London by browsing through the various pages on this website. We ensure that all the information is constantly updated, meaning that MovingtoLondon.net provides expatriates with the most current information available, whenever it might be that you’re coming to live in London.