What’s the cost of living in London? A good question by all accounts. Who wouldn't want to know, especially with the massive influx of newcomers, both national and international, who look to settle down in the capital? The answer — staggering, exorbitant, mind-boggling. No surprises there, this is old news. OK, let’s talk in numbers now.

Rent

“In London, love and scandal are considered the best sweeteners of tea”. -John Osborne

The average monthly rent in London has been estimated to amount to 42.5% of a person’s income. The rent is expense number one by a country mile if you live in London. Renting a one bedroom flat in the city centre costs an average of £1523.32. This figure alone explains why house sharing is so common among young professionals in London.

What makes it so darn expensive?

It is simple. The high demand for housing has made the property market lose any touch with reality and that’s about as much there is to say. But before anyone blames it on the immigrants, they should consider that the thriving economic state of our nation’s capital is owing to those very immigrants as well. With this clarified, let’s move on to discuss Council tax.

Council Tax

“A broken heart is a very pleasant complaint for a man in London if he has a comfortable income”. -George Bernard Shaw

Many Londoners probably still don’t know, or have rather vague idea, what Council tax pays for. It pays for things like: rubbish collection, street cleaning, maintenance of parks and open spaces, voluntary groups support, adapting homes for disabled people, meals on wheels, CCTV installation, issuing taxi licences, flood defences, social care, planning services, museums, fire service and policing. Council tax applies to all domestic properties, including houses, bungalows, flats, maisonettes, mobile homes and houseboats, whether owned or rented.

How is Council tax calculated?

I’ll give you the short version. There is this thing called band. Properties in England are put into one of eight bands (A-H), depending on the price they would have sold for in April 1991, when valuations for the current system were made. The valuation band ranges for London are as follows:

A — Up to £40,000 — £627.86

B — More than £40,000 and up to £52,000 — £732.51

C — More than £52,000 and up to £68,000 — £837.14

D — More than £68,000 and up to £88,000 — £941.79

E — More than £88,000 and up to £120,000 — £1151.07

F — More than £120,000 and up to £160,000 — £1360.37

G — More than £160,000 and up to £320,000 — £1569.65

H — More than £320,000 — £1883.58

But this is not what you pay. A ‘full’ council tax bill is based on two or more adults living in a household. What you actually pay will depend on your own circumstances. There are many situations where your council tax bill can be reduced (single occupancy), or where you may not have to pay a bill at all (full time postgraduate students).

The amount of council tax you pay will depend on:

the council tax band for your property

the amount of council tax payable in the City of London for that band (look above)

whether you are entitled to any discounts, exemptions or relief on the full bill

Here’s a table with Council tax bands and charges for the London Borough of Richmond upon Thames. It is a good point of reference.

In March each year you will be sent an annual council tax bill detailing the council tax amount due for the full financial year 1 April to 31 March next.

To make things more clear I will give one specific example. A couple renting a one bedroom flat, band B, in Zone 5 (say Croydon, CR0 postcode area) will have to pay roughly £1100–1200 per year. This means another hundred or so pounds on top of their monthly rent to cover the Council tax bill. For more information about Council tax visit www.cityoflondon.gov.uk. And this sums it up I think. Moving on to utility bills.

Utility Bills

These include electricity, gas, water and broadband/TV/phone package. For a small studio or the one bedroom apartment of our aforementioned couple, the average monthly costs look something like this:

Electricity — £20–30

Gas/Heating — £20–40 (depending on the season because of the heating)

Water — around £20

Broadband/TV/phone bundle — best case scenario is another £20

Transport

“Mind the gap!” -TFL

The average monthly transport cost in London is roughly £131 before the oncoming annual increment in the fares. Bus and tram fares, for example, will increase by 2.3% from 2 January 2015. Here’s how they will look:

The adult-rate pay as you go fare (Oyster and contactless) will increase by 5p to £1.50

The adult-rate tram cash fare will increase from £2.40 to £2.50

The adult-rate pay as you go daily cap will be frozen at £4.40

One Day Bus & Tram Passes will be reintroduced and will cost £5

The Bus & Tram Monday to Sunday cap (contactless only at adult-rate) will increase by 4% to £21

The adult-rate 7 Day Bus & Tram Pass (Oyster only) will increase by 4% to £21

7 Day, monthly and longer period Bus & Tram Passes will increase proportionately

For Tube, DLR, Overground and National Rail fare changes, and for more detailed information, visit tfl.gov.uk.

How about taxi fares?*

Taxi Start (Normal Tariff) — £3.00

Taxi 1km (Normal Tariff) — £2.62

Taxi 1 hour Waiting (Normal Tariff) — £24.87

* This and more data was collected from www.numbeo.com. Their London living expense calculator is quite good but you should take everything (including the current guide) with a pinch of salt. Where possible, always double check and verify for yourself before deciding whether to trust any given information.

What of fuel prices?

Petrol (1 liter unleaded) — £1.20 (as of December, 2014)

Diesel (1 litre) — £1.25 (as of December, 2014)

A few words about Congestion Charge.

“There are two places in the world where men can most effectively disappear — the city of London and the South Seas”. -Herman Melville

Those who drive and regularly go within London’s Congestion Charge zone should have in mind the following information. You have to pay an £11.50 daily charge if you drive between 07:00 and 18:00, Monday to Friday in the Congestion Charge zone. There is no charge on weekends, public holidays, between Christmas Day and New Year’s Day inclusive, or between 18:00 and 07:00 on weekdays. It is up to each individual to work out the figures and decide if it makes financial sense to drive in the Congestion zone on a daily basis. A valid point in regard to congestion charging is that motorcycles and mopeds are exempt from it. There is also a 90% discount for residents of the Congestion Charging zone.

Groceries

“You are now / In London, that great sea, whose ebb and flow / At once is deaf and loud, and on the shore / Vomits its wrecks, and still howls on for more / Yet in its depth what treasures”! -P.B. Shelley

This is a substantial part of every Londoner’s living expenses. The average prices of some basic products in London:

Milk (regular), (1 liter) — £0.95

Loaf of Fresh White Bread (500g) — £1.01

Eggs (12) — £2.34

Rice (white), (1kg) — £1.59

Potato (1kg) — £1.41

Tomato (1kg) — £1.98

Apples (1kg) — £1.98

Chicken Breasts (Boneless, Skinless), (1kg) — £7.78

Water (1.5 liter bottle) — £0.88

In my personal experience food expenses, without eating out, start from £150 per person per month. Unless, of course, you are leading an ascetic life.

Eating out

“The man who can dominate a London dinner-table can dominate the world”. -Oscar Wilde

For the average snowed under London professional eating out is a daily routine. Others do it as a way to treat themselves to something different, to break the habit if you like. And there are also those people who can afford to go to a quality restaurant only for special occasions that happen once in a blue moon. It is in one word — expensive. Some guideline prices below:

Combo Meal at McDonalds or Similar — £5.00

Meal, Inexpensive Restaurant — £10.00

Meal for 2, Mid-range Restaurant, Three-course — £50.00

Remember that those are approximate figures. The best value for money meals can be had at some buffet restaurants. Look around in your area. JRC Global Buffet is a an established brand and a safe bet.

Furnishings

“I’m leaving because the weather is too good. I hate London when it’s not raining”. -Groucho Marx

If you are just moving in to London and your flat/house hunt has lead you to a place with nothing but white goods there are two possible plots. First, you are filthy rich and will gladly splash a few thousand grand on designer furniture. Conversely, you are like most of us mortals and will have to resort to the more affordable alternatives. Well, if you were of the former kind I believe you wouldn’t bother reading something like this at all, right? That’s why I will proceed straight with naming the budget choices. These are second hand furniture shops, some charity shops, online private listings (on eBay, Gumtree, etc.) and last but not least IKEA. While there might be some real bargains in the first two and occasionally online as well, it is in IKEA where you will find everything you need at a reasonable price. Here’s an exemplary list of the most essential furniture with up-to-date prices:

BRIMNES bed frame (standard double) — £166.00

HAFSLO sprung matress (standard double) — £80.00

ASKVOLL bedside table (two drawers) — £29.00

PAX wardrobe (D: 60 cm; H: 201.2 cm; W: 150 cm) — £271.00

EKTORP two-seat sofa — £245.00

MALM chest of 3 drawers — £39.00–45.00

MELLTORP dining table (L: 125 cm; H: 74 cm; W 75 cm) — £35.00

Flat pack furniture is designed around the notion of living on a budget. It certainly helps then that there are four IKEA stores in London where you can go and buy almost anything. And if you are pressed for time or simply prefer someone to build your new flat pack fittings for you, there is a dedicated service for that in London too. Check out Flat Pack Mates for instance. Their professional services and pricing look like this:

Furniture assembly — £25.00 per hour for one man

Collection and delivery — starts from £45.00

It is a matter of choosing whether to invest a portion of your time (provided that you have some to spare and/or the necessary skills) or a little of your money instead.

Shoes & Clothes

The cost of living in London is also boosted by what you spend on clothes and shoes. Duh. Another round of average prices:

1 Pair of Jeans (Levis 501 Or Similar) — £61.11

1 Summer Dress in a Chain Store (Zara, H&M, …) — £31.41

1 Pair of Men Leather Shoes — £71.05

1 Pair of Nike Shoes — £66.69

Cinema

“There’s a hole in the world / Like a great black pit / And the vermin of the world / Inhabit it / And it goes by the name of London”. -Stephen Sondheim in Sweeney Todd

It wouldn't be a complete guide without mentioning some entertainment. London has plenty of that to offer. But since going to the cinema is my favourite pastime, I took the liberty to use it to illustrate the cost of some basic entertainment in the capital. Odeon, Vue, Cineworld and Empire Cinemas are the most popular cinemas in London. Let’s have a look at some ticket prices (Vue taken as a point of reference):

Adult (standard seating) — £9.80

Student (standard seating) — £8.35

Child (standard seating) — £7.35

Wages, Salaries