The cost of living in London will form a big part of the relocation process. It doesn’t matter whether you’re being transferred through work, studying in London or have just decided to make the city your home, the true cost of living in London needs to be quantified before you start packing your bags.
The True Cost of Living in London – Your New Address…
How much rent you pay each month may be one of the biggest factors in your ‘move-to-London planning’. Right now, not a week goes by without a business news story on the soaring house prices in the capital. In a recent article in The Economist, it was stated that, “In London, prices are already 25% above their 2008 peak, and are now rising at a rate of about 18% a year. The average home in the capital costs more than £450,000 ($760,000); in some neighbourhoods the average house price is more than ten times the average income”
It’s getting so serious that economists, as well as local and national government are thinking of ways that they can institute tougher lending policies and other measures to clamp down on the ever-expanding London home price bubble. News from Reuters suggested that the Financial Policy Committee (FCP) of the Bank of England would be meeting next month to consider possible strategy around this issue.
Rental Property in London – How Does This Affect What YOU Pay in Rent?
The rising price of buying homes in London obviously has a direct impact on the price that is charged for rentals, but it is not merely a financial consideration that is raising the prices of rent in London. More people in London are renting because purchasing a home is out of their reach, (even more so now with stricter lending protocols in place) and the demand for rental properties is starting to outstrip the supply of rentals in the Greater London area. Over the last year, we’ve had a huge increase in the number of enquiries for the LR Service from people just moving within London – they simply find it too stressful and time consuming, not to mention often disappointing, to find a flat on their own.
People will pay more in rent each month, simply because they cannot afford a mortgage or to get onto the housing ladder. More and more people are moving to London each year and while there is massive construction of homes and apartments underway, it is not always convenient (very far out of the city) or suitable (schools, transport, amenities).
If you’re planning your move, and have been doing a search for rentals in London, you may have found that the properties are gone, almost as soon as they are listed. We have many clients, especially from the US and Canada, who just find it impossible to search, locate, view and go through the lease negotiation process while thousands of miles away. Add to that, the fact that they may not have a good idea of neighbourhoods, areas and what they ‘should’ be paying in rent, things get real tricky, real fast.
You’ve got to do your homework before you arrive, research London neighborhoods and of course, decide on your budget and set reasonable limits. If you work on the premise of establishing your needs and requirements FIRST, then you’ll be able to find a home to match. It may not be Notting Hill, or a Georgian home in Kensington, but with a good needs assessment – which is where we start our process at London Relocation, you’ll be able to find the perfect home in London – for YOU.
What It Costs to Live in London?
Once you’ve established more or less what you’ll be paying in rent and have a plan in place to find a home, you’ll need to start looking at the ongoing costs of living in the city. Most them are pretty easy to figure out, but when you’re converting from a different currency, or have a strict budget, you need to take some time to figure it all out.
Council Tax for Renters in London
Council Tax is an amount that EVERYONE has to pay whether you buy a property or rent one. The amount you pay is determined by the size of the property and the location of the property. It is not determined by how many people live on the property. Council tax is levied to contribute towards services in your area, anything from refuse collection and lighting to police, fire and ambulance services.
Council Tax is an annual fee and varies considerably – anywhere from £627.86 to £1883.58 – you can pay it a number of ways: Once a year, biannually, or in 10 monthly installments. Your rental agreement should contain mention of the Council Tax payable, but that will depend on your lease agreement.
This is a no brainer, everyone knows they have to pay for utilities no matter where they live in the world, but moving to the UK may add some interesting quirks that you may not have considered…
Utilities Service Providers in the UK
It’s challenging to predict what an average bill could be for basic services, because it depends on how many people you have living in your home, how good you all are at turning off the lights when you leave the room and of course…How long you can last into autumn (Fall) before turning on the heating!
Then of course you need to add the array of service providers in the London area. You could also consider alternative forms of energy for power and to heat your home, but as a renter you are often governed by what is available to you.
LR TOP TIP: Don’t be afraid to switch service providers for utilities – find the one in your area that is offering you the best prices and services. Use a service like Go Compare to find the best deals on Energy Service Providers in London. If you shop around you should be able to get your gas and electricity bill down to around £80 per month (based on two adults living in a two bedroom apartment in central London).
Water Service Providers in London
I’ve kept this separate, for the simple reason that most properties in London get their water from Thames Water, and you can’t easily choose another provider. What you can do, to save money on water is to have a meter installed, which sort of “double checks” your water consumption, so you’re not over charged.
Thames Water advertises their service at £1.01 per day. It’s not set in stone, but it will give you an idea of what to expect from your bill each month.
Internet, television, satellite. Being connected, especially if you’re moving to the UK from abroad, is essential and it’s one of the top questions we’re asked by our clients – which is why we blog about it so often! Take a look at our guides to Internet service providers, mobile phone companies and even fixed line services.
LR Internet Tip – Get a ‘special’ from one of the many service providers that includes EVERYTHING: TV, Internet/Broadband, and Phone Services.
It’s important not to forget smaller items that you may not be aware that you have to pay in the UK: A TV License is required by law. It is considered a tax and evasion of it is a criminal offence. Even if you’ve got a satellite TV and can stream Game of Thrones direct to your laptop, if you have a TV in your home, you’ll have to pay for the privilege. Your TV license fee funds a large percentage of programming for the BBC – “Doctor Who”… totally worth it, right?! The annual fee is £145.50 and you can even pay it weekly if you choose.
These are your very basic, standard costs when renting a home in London.Tomorrow, I’m going to look at the cost of living in London with regards to groceries, eating out, entertainment, clothing and white goods, and we’ll look at whether it’s worth it to ship your belongings to the UK or purchase new once you’ve arrived.