Housing costs alone swallow nearly 60% of the average London salary, new analysis finds
London has been ranked the most expensive of 37 European capitals for everyday living costs, according to new research from financial data and analysis provider Tradingpedia.
The study found that a single person renting a studio flat outside central London, and covering rent, food, transport, utilities and moderate leisure spending, faces average monthly outgoings of £3,090 (€3,611). This places the capital ahead of every other European city measured.
Londoners also earn among the highest average salaries in Europe, at £3,572 (€4,184) a month. However, the research found that living costs absorb 86.32% of that income on average, leaving the city ranked ninth least affordable in Europe when wages are weighed against expenses.
Housing was identified as the largest single cost for London residents. A 45-square-metre studio flat, including utilities and internet, costs an average of £2,105 (€2,459) a month outside the capital's priciest postcodes, the highest housing cost recorded across all 37 cities studied. This is roughly £340 more than in Reykjavik, the second most expensive capital for housing, and equates to 58.8% of the average monthly salary.
Groceries were one of the few areas where London performed favourably, the report found. A basic monthly food basket costs £142 (€165.70), cheaper than in cities including Bern, Reykjavik, Oslo and Paris. Relative to income, food accounts for just 3.96% of the average salary, making London the second most affordable capital in Europe for grocery costs as a share of earnings.
Leisure spending in London was found to carry a premium, with residents spending an average of £616 (€720) a month on dining, fitness and cultural activities, 45% higher than in Reykjavik. This includes £285 (€334) for two theatre tickets, £119 (€139) for a monthly gym membership, and £97 (€114) for dinner for two at a mid-range Italian restaurant, together accounting for around 17.2% of the average salary.
Transport costs were also the highest of any city in the study, averaging £198 (€231) a month. This compares with £79 (€93) in Amsterdam, £74 (€87) in Paris and £53 (€62) in Berlin. A TfL Travelcard alone ranges from £172 (€201) for Zones 1–2 to £313 (€366) for Zones 1–6, depending on coverage.
The picture improves markedly for dual-income households. Although a family of four in London faces the highest monthly living costs of any European capital, at £4,050 (€4,727), a combined household income of £7,165 (€8,367) means these costs consume 56.5% of earnings, comparing favourably with Paris (62.7%), Warsaw (76.8%) and Athens (82.3%). The average household is left with around £3,115 (€3,640) in disposable income each month.
“London isn’t unaffordable because people don’t earn enough; it’s unaffordable because housing eats such a large share of monthly earnings,” said Brian McColl, analyst at Tradingpedia.com.
“Once rent is paid, even relatively ordinary expenses begin to feel pricey. For families with two incomes, the city becomes much easier to manage because the cost of living is shared. This means that in a big city such as London, affordability is increasingly determined not by how much people earn, but by whether they are paying the bills alone.”
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