Cost of Living in London: The Ultimate Guide

London is a dream destination for many, but can you actually afford to live there? This guide walks you through the real costs of life in England's capital so you can plan your budget with confidence.

More than 9 million people call London home—from high-flying bankers in Canary Wharf to service workers across the city. There’s a huge range in what people earn and spend. Let’s break it down.

The Average Salary in London

Data from HM Revenue and Customs shows the median annual income in London is around £33,300, with take-home pay of roughly £2,291 per month. The mean average is higher (£36,036) but gets skewed by top earners. Half of Londoners earn more than the median, and half earn less.

Your lifestyle will depend on what’s left after tax. Use our UK salary calculator to see your monthly after-tax income in seconds.

Housing Costs in London

London’s property market is one of the most expensive in the world. The average rent is about £2,127 per month for a small two-bedroom—or around £900 per month for a room in a shared house.

Rent varies wildly by area. In central boroughs like Westminster or Kensington, a studio runs about £1,430 and a 2-bedroom around £3,002. In outer areas like Havering or Sutton, you might find a 2-bedroom for £1,257.

Utilities and Bills

On top of rent, budget for gas, electricity, water, broadband, and council tax. Expect £400 or more per month for utilities. Council tax alone can be £100–£270. A TV licence is £169.50 per year. Broadband typically costs £20–£70 per month.

Transport in London

The Underground and buses are the main ways to get around. Monthly travel cards in 2024 cost roughly:

• Zones 1–2: £164
• Zones 1–4: £236
• Zones 1–6: £300

You can use contactless cards or an Oyster card. London’s bike-share costs £2 for 24-hour access, with the first 30 minutes of each journey free.

Food and Groceries

A single person can get by on around £300–£350 per month for food. A loaf of bread costs about £1.55, milk £1.32, and a mid-range bottle of wine around £10. Budget supermarkets like Lidl and Aldi help keep costs down.

Entertainment and Lifestyle

Cinema tickets run £8–£15. A pint in Zone 1 is around £8; cocktails £12–£14. A full-course dinner averages about £60. The good news: many museums and parks are free. Regent’s Park and Parliament Hill offer plenty of no-cost recreation.

Childcare

25 hours of childcare costs around £125 per week; 50 hours around £320. The UK offers free childcare support once your child turns three, though you may still pay £60–£120 per week in London.

Can You Live in London on £30,000?

Yes—but you’ll likely need shared accommodation and a tighter budget. Many people manage on £30,000 by living in an HMO and cutting back on nights out. For more comfort, a salary of £50,000 gives you more options, including your own small flat in the right area.

Summary: What It Really Costs

A rough monthly budget in London:

• Rent: £900–£2,200
• Utilities: £350–£450
• Transport: £140–£300
• Food: £300–£400
• Entertainment: £350
• Sports/health: £75

Total: £2,115–£3,775 per month, depending on your lifestyle. Use our UK salary calculator to see how your take-home pay stacks up.