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What Aussies should know about the cost of living in London

cost of living in London australian expats

When moving abroad as an Aussie, there are few destinations quite as alluring as London, however the cost of living in London still surprises many Australians when the arrive.

London has become a second home to many young Australians, thanks to our historical ties, London’s vibrancy and its geographical position on Europe’s doorstep. Moving to London has long been considered a rite of passage for young Aussies, and hundreds of thousands of us can be found there at any given time. If you’re tempted to join the club and try out the London experience for yourself, your chances of success will be much greater if you take some time beforehand to plan your finances.

Previously considered one of the most expensive cities in the world (second only to New York), the cost of living in London is actually now more affordable than some other top expat destinations like Singapore and Hong Kong, as a result of Asian economic growth. At the time of writing, the current relatively weak status of the pound has also contributed to a cheaper London, though currencies can always fluctuate and this may or may not be an indicator of the UK’s economic future. Brexit has created a certain amount of economic uncertainty across Britain, but as an international financial capital, London is well placed to weather any possible storms, with Forbes naming the UK as the best country for doing business in 2018.  The cost of living in London is much higher than other places to live in the UK, with northern cities like Manchester, Liverpool and Leeds offering more affordable alternatives. If you have your heart set on London however, here is a breakdown of what you can expect to pay for the privilege:

Food and groceries:

Food items are generally priced similarly to what you can find in Australia, although some expats have commented that quality may be lower and the volume a little less. Generally speaking, it is not expensive to purchase ingredients for home cooking and one person can realistically feed themselves for £5-10 per day without eating out. Where you do your shopping will have a real impact on your grocery bills too; unlike Australia, England has a wide range of supermarket brands to choose from, and each caters to its own income demographic. The German chains Aldi and Lidl are considered the “budget” options where you’re most likely to find the cheapest merchandise and a more “no frills” layout. Tesco and Asda are the next step up, providing good value and a wide range of products. These are also the supermarkets most likely to engage in price wars, leading to low prices and bargain offers. Waitrose and Marks & Spencer are more up-market options that have higher prices and luxury goods.

TV License:

One cost that you may find surprising is the compulsory TV license which is the country’s way of funding the BBC. At around £150 per year, it’s not a huge expense, but do be aware that you’ll need to pay this fee if you have a television or if you watch BBC programmes on your computer. This is taken seriously, you can be prosecuted for non-payment and inspectors will check.


By far the greatest component of the cost of living in London is rent. While many other necessities are relatively affordable, rent is extremely expensive. Economists have labeled London’s current property market a “housing bubble” and many residents struggle to meet the high cost of rent. It is unrealistic for most expats to expect to find accommodation in central London. The city is divided into zones, with zone 1 comprising the most central and thereby expensive areas. According to the price comparison site Numbeo, a 3 bedroom flat costs an average of £1,969 per month outside the city centre, but £3,139 within the city centre. A 1 bedroom flat costs around £1,188 outside the city centre, but about £1,659 within the city centre. You can reduce the cost of rent by looking for places outside of zone 1, as well as choosing shared accommodation over a house or flat of your own. If moving with a family, a place toward the outskirts of the city will not only be more affordable, but more spacious. Before moving, investigate the market by checking out real estate sites like zoopla.co.uk or rightmove.co.uk to see what you can realistically afford.

Get more tips in our article on Tips for expats for renting an apartment in London.


cost of living in London

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Depending on where you live, you may need to drive a car, or use public transport. Buses are the cheapest option when it comes to public transport, with the “tube” system being quite expensive these days (though perhaps no more so than the increasingly pricey Aussie public transport fees) . Using an Oyster public transport card is generally cheaper than buying tickets, though your costs will vary depending on distances travelled and what zones you are travelling through. A one-way ticket is around £2.50, while a monthly pass will cost you around £133.00.

London’s famous black cabs are a reliable service that will get you where you want to go, but it is an expensive option. Uber is a more affordable service, but the future of the company in the city is uncertain; authorities have officially banned it but the decision is still in the middle of an appeals process continues to operate until a final ruling is made.

Purchasing a car in the UK is generally cheaper than in Australia, but drivers in inner London are subject to pay a congestion fee, due to high levels of traffic in the city. Driving into central London between 7am and 6pm, Monday to Friday, will cost you £11.50 per day, while an additional £10 may be charged if your car doesn’t meet certain emissions standards.

Going out:

While London is still slightly more expensive than Australia’s priciest city Sydney, your cost of living in London will depend on your lifestyle choices. As with any city, there are always options to choose from, and it’s your decision how up-market or cheaply you live. Many Aussies will want to live the typical “expat” lifestyle, going out often, exploring the nightlife and making the most of any chance to travel around Europe. While this approach to life will allow you to experience everything London has to offer, it is also likely to get expensive. Cooking at home, living outside of the city centre and searching out free activities will cut down your expenses and may be more realistic, depending on your income. Choosing cheaper pubs and eateries will obviously keep your entertainment costs lower than going to higher end establishments.

As well as the amount of money you’ll need on an ongoing basis, don’t forget the short-term costs associated with actually moving, such as storage or removalists, accommodation until you have found a long-term place to live, rent deposits, real estate agents fees and so on. These costs can really build up, especially if you’re moving without a new job lined up for your arrival.


cost of living in London

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London has fascinated many of the world’s greatest historical figures and still offers an incredible mix of culture, art, architecture, business opportunities and just plain fun.  Living in this great city can be the experience of a lifetime, but it can also be stressful if you’re struggling financially. Think about whether you’ll be able to balance your finances with the lifestyle you want, before deciding whether to move long-term or opt for a shorter visit. London may be the jewel of Britain, but there is more to the country than just one city! Exploring regional areas of the UK can be just as rewarding and less financially burdensome, so look at all the options before choosing a city to call home during your expat adventure.

We cover more information on what Quick Facts for Australians moving to London in this article, and what you should know about healthcare in the UK (another important component of the cost of living in London or the UK generally).  And of course, if you want to save money on international money transfers then find out who offers the best deal in our article What is the best way to convert British pounds to Australian dollars.

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Australian Expat Investor Contributor

These articles have been written by an Australian Expat Investor Contributor. Please see their details in the relevant post. The views expressed in the article are his or her own and may not reflect the views of The Australian Expat Investor. If you are interested in contributing an article or story to The Australian Expat Investor please visit our contact page.

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