London is the most expensive city in the world. My city of San Francisco doesn't come close! I'm currently buying as many ocean view homes as possible in San Francisco because they are so cheap compared to London!
Recently, I hopped over to the United Kingdom to meet some friends and perspective clients in London with a buddy. I have been everywhere, and I mean everywhere in Asia, Europe, South America, and the United States.
Despite my time in Tokyo, Osaka, Hong Kong, Shanghai, New York City, San Francisco, Paris, Rio, Barcelona, and Venice, I can comfortably say that London, with its Great Britain Pound and $50+ million dollar royal wedding is absolutely the most expensive city in the entire world!
Here's a sample itinerary of what I spent on a Friday. I've recorded to the best of my ability what I spent to give you an idea of what food, lodging, clothing, and transportation costs go for in London and how it compares to your city. Don't shit a brick!
Let's take a look at the costs of the most expensive city in the world: London.
London Hotels Are Crazy Expensive
The Dorchester, Park Lane Mayfair, London, W1K 1QA, United Kingdom. The Dorchester Hotel is located in Mayfair, overlooking Hyde Park. The location cannot be beat as we got to walk around everywhere. It has a couple of the most famous restaurants in Alain Ducasse and China Tang, and readers know I love to eat to my gut's dismay!
The Landmark, Le Meridien Piccadilly, and The Grosvernor Square were other recommendations. However, I chose The Dorchester because of the location and the fact that there was a deal. Only 400 GBP per night from 700 GBP usually!
You're thinking, what the hell?! Guess what? So was I! I can't believe I'm saving US$475 a night with this deal. Sign me up! For only US$635 a night, I got to stay in a “Superior” Queen Room, and that's the discounted rate. There is nowhere I have ever been, where I had to pay US$635 for a normal room with a queen size bed.
London Food Is So-So
The most expensive city in the world has only so so food. Local London food is not very interesting. But, since London has every single type of restaurant in the world, there's no dearth of choices to choose from. As the budget conscience person that I am, I hopped over to McDonald's after walking around Piccadilly Circus to buy a healthy Royale with Cheese. The price: GBP 4.19. US$6.50 is literally double what a Big Mac costs in San Francisco. Pass!
There is a huge Indian population in London, so I decided to try my luck at am alley way Indian restaurant. The more run down, the better I figured. I was craving for some chicken tikka masala with garlic naan until I looked at the price. GBP 14, and that was just for the chicken tikka masala. A garlic naan was GBP 5 extra for a total cost of US$30 before tip.
You can get some of the best Indian food at a divvy place called Shalamar in San Francisco for $12 for similar items. I spent GBP 19 anyway.
For dinner, we went to this Italian restaurant called Zucca on 184 Bermondsey Street, SE1 3TQ. We ordered some seafood capaccio, porchetta, taglierini, fish, and several glasses of wine. Total cost including tip was about GBP 100, or US$158. Take a look at the menu. The prices don't look that crazy actually, but things start adding up with the wine, taxes, and tip.
UK Clothing
No trip to London is complete without getting some custom tailor made dress shirts, overcoats, jackets, and maybe even shoes on Bond Street. Bond Street is on the West End of London and runs north-south through Mayfair between Oxford Street and Piccadilly. You have every single luxury goods brand store there, which is not my cup of tea. Instead, I like to get tailored clothes from smaller stores such as Thomas Pink and TM Lewin.
I've got to say that I was surprised how relatively inexpensive tailored shirts and jackets are in London. I picked up a TM Lewin, blue pinstriped suite with pants for just GBP 250. Meanwhile, I got three Thomas Pink dress shirts for around GBP 60 each. These prices are comparable, if not cheaper that the prices in America. On top of that, they are tailored, which to me, is worth much, much more.
London Transportation Is Not Bad
We mostly walked everywhere, but of course, we had to take the famous Tube and London Cabs. A 1-day Tube travel card is GBP 7.20 and we took a GBP 10 cab ride.
San Francisco cab fairs are some of the highest in the world, so I didn't think transportation costs were that out of hand. Petrol prices on the other hand are 2X higher than here in the US. We are talking $9/gallon!
TOTAL SPENDING: ~ US$1,300 for one day! Excluding clothing, around $800 just to live. Take $800 and multiply it by 365 days a year and that's US$292,000 one needs to make to live at The Dorchester and feel relatively comfortable. Let's goose that figure up to US$350,000/year to account for entertainment and travel for one individual.
That's right, I estimate one needs to make around US$300,000 a year +/- $50,000 to feel like they can feel comfortable living in London. You won't be saving that much with that income mind you. Just comfortable spending.
It's Very Hard To Afford London Living And Get Ahead
The reason why London is the most expensive city int he world is because it is the financial center of all of Europe. London is much like New York City, but 25% more expensive in my mind. London faces a domestic demand curve and an international demand curve.
There are so many tycoons from all over the continent (think Russia) that purchase a pied de terre that property prices are truly insane. We're talking easily US$2,500/square foot for well located properties in the city.
US$2.5 million dollar 2 bedroom, 2 bathroom condominiums that are 1,000sqft are common place. Can you imagine spending that much? Even here in San Francisco, it only costs you about $1.8 million to buy something similar in the St. Regis non less. But then again, $2 million buys you that one story, 1,800 square foot dump in Palo Alto!
Those who work and save in London are actually quite fortunate. When they retire, they can literally move to any other city in the world and immediately make their money grow.
I have the same feeling living and working in San Francisco. However, there are now three cities which I know I will not comfortably be able to retire in: Tokyo, New York City, and now London!
Related:
The Cheapest International City In The World: San Francisco
If The U.S. Housing Market Got As Hot As The Canadian Housing Market
Wealth Building Recommendation
In order to optimize your finances, you’ve first got to track your finances. I recommend signing up for Personal Capital’s free financial tools so you can track your net worth, analyze your investment portfolios for excessive fees, and run your financials through their fantastic Retirement Planning Calculator.
Those who are on top of their finances build much greater wealth longer term than those who don’t. I’ve used Personal Capital since 2012. It’s the best free financial app out there to manage your money.
Updated for 2022 and beyond. Brexit is really doing a doozy on London's economy. Employment growth has slowed and real estate prices have fallen since 2017. London is still the most expensive city in the world.
With the current low level of the pound visiting London should be more affordable now. The Dorchester is the most famous hotel in London, so of course it is expensive. There are nice hotels for much much less. I was born and grew up in London… property is expensive now especially near the centre. In the area I grew up in for the same space it is probably twice as expensive as where I live in Australia now. Because houses are much smaller on average people can afford to buy one. The South Coast can be very nice in the summer. In Bournemouth the water might even get tolerable for swimming in :)
I live in London and the only expensive part of it is housing.
It costs about £10,000 per square meter for a nice apartment in Zone 2.
So ~£800,000 (~$1.2 million USD at current exchange) for a 80 sqm apartment.
Or renting the equivalent is maybe a little less than £3,000 per month
Everything else is cheap/affordable from food to cloths to free healthcare to cheap mobile phone and broadband contracts and cheap transport if you purchase monthly/annual tickets.
You might find surprising is that since your visit in 2012 house prices have almost doubled.
Is that right? That’s nuts! Should bought in 2012. It’s similar here in SF, but not double.
To be more accurate, the average price of all of Greater London is up 55% while inner London is up 70% since Jan 2012. We have fairly accurate house price data as all sales are logged and available publicly.
In my borough prices are up 95% since Jan 2010
A decent terrace house is in Zone 2 is now close to £1.5 million for a nice one. That is ~$2.2 million USD for a home that is no more than 150 square meters in size.
Annual property taxes are reasonable here. Its called the council tax and it will be about £2000-£3000 and is paid by whoever lived in the property (so if its rented the renters pay it). purchase taxes called the ‘stamp duty’ for a house that price are close to £100,000 a tax paid upfront. Its more if you already own property it would be closer to £150,000 if its a second home or you own investment property.
Somehow in a short 20 years London has gone from an affordable English city to an expensive international city.
I really like your council tax system! It seems low as a percentage of the value and the house and is paid by whomever lives there。So logical! Check out this post which promotes that everybody pays in America in order to control excess spending: https://www.financialsamurai.com/renters-should-pay-more-taxes/
Yes London is thé most expensive city i have visited. Do the british get a great salary ?
[…] one of the world’s great international cities. The last time I was there was in 2011 and I chronicled how much I spent on food, transportation, and shelter. London makes Manhattan look cheap, and San Francisco feel like a developing nation in terms of […]
I spent almost three weeks in the UK last year, most of it in London. But I did it on the cheap, e.g., a hostel just off Piccadilly Circus, a weekly transit pass, many meals from the supermarket (e.g., bread and cheese and veggies).
If I’d stayed in a B&B or hotel, I would have been able to afford less than a week.
Incidentally, two of the people staying in my hostel room were there for job interviews. Another was there from Ireland to see an opera.
This month (March 2012), the average rent in London hit £3206 ($5105) per month. As you wrote, this is because of a high domestic and international demand. For example, there are 428,255 international students in the UK, 26% of them in London. This number is growing, and so is the rent. The Guardian, one of the UK’s largest newspapers reported yesterday that London rent was increasing 7.8% year-on-year!
This is a huge problem that everyone is aware of, and new services are coming about to try and help. For example,uhouse.co helps students find affordable accommodation. It lists all the properties within a student budget.
Do you know b/c you live or have lived in London? Heard health care rocks in Europe!
My last foray to the UK was mostly around Poole, on the south coast. Although cheaper than London, it’s still a pricey tourist town (like comparing Carmel or Monterey to SF). Lucky for me, the travel was all done on the company dime, since the hotel and restaurant bills were all nausea-inducing.
South Coast…. such a thing in the UK? All I read is dreary and rainy and cloudy. I think I’ll just stick to Monterey!
I love London! I was there last year for work, and it was my third visit to the UK. I stayed in the Strand, got rush tickets to several shows, and walked all around the city. (In between working, of course). Big cities can be pricey, but you can really cut down on expenses by walking and using public transport, visiting the grocery store for breakfast food and snacks, and taking advantage of healthy, cheap eats (Pret a Manger, for instance).
Check out the list of the highest cost of living cities in the world: https://www.theatlantic.com/business/archive/2012/02/the-10-most-expensive-cities-in-the-world-and-how-they-got-that-way/253149/. I live in a city that’s pricier than London, but since we don’t own a car and we live frugally, our living expenses are about half our take-home pay. You just prioritize differently, I think.
Let me know how your experience is when you aren’t there for work and have to pay for everything yourself. Thx!
I don’t know about your employer, but mine definitely did not pay for my theater tickets, museum entry, or the extra nights’ hotel (and related food and daily expenses) that I spent in London.
That came out of my pocket – but again, I didn’t stay at the Dorchester.
The Dorchester or bust! :)
Speaking as a Londoner, YES it is an expensive city BUT think about it – we have a lot of ethnic immigrants come here, some of whom live and work at or below minimum wage (around £5.50 / hour). These people live alongside others earning £4+ million per year. What I’m saying is that there is something for every budget here if you know where to look.
The trick like in any city is to know where to go for certain things – a little local knowledge goes a long way. Me and another friend of mine (who is Indian and doesn’t like to waste a penny) used to regularly meet up to eat curry in a what is actually a relatively posh part of London (Fulham). This would typically cost about £3.50 a plate each (Naan – £0.90) and so it’s not expensive. Great curry is found in the following areas: Whitechapel and Stepney around the Brick Lane area, Tooting and also Southall. Thai food is scattered around, and we get Japanese sushi at half price (£6 tray reduced to £3) after 8pm from the Japan Centre (Picadilly) which also has a sit down area. Personally I don’t think much of local English cuisine as I eat mainly vegetarian and fish, but you can experience some great culinary delights at Borough Market (nearest tube: London Bridge). Food there’s not cheap but quality is high!
I must say, I can’t believe how ripped off you were on your Indian meal! Naan doesn’t normally cost more than £2 and I wouldn’t pay more than £10 for a main dish unless I was eating in a posh restaurant for a change. Personally I don’t eat at posh restaurants so much because even though I earn a lot, I’d rather invest my money into growing my assets. As you say, living in London is a great opportunity because IF you can control your expenses and earn a lot you’ll reap the rewards.
Next time you visit, do check out Brick Lane (nearest tube: Whitechapel). If you want cheap but good food, two chains of restaurants – Giraffe and Pizza Express are both pretty good – figure about £12-15 per person excluding wine.
Clothes here are more expensive and generally I think buying them in America is a better deal (I normally fill a suitcase up coming when I visit). We do tend to spend less on clothes however as we air dry our clothes instead of using a tumble dryer. I guess compared with America, we learn to make do with a little less.
Also places like Primark and H&M offer pretty good discounts. Marks and Spencer being known for good quality at reasonable prices. For tailored clothes, I personally prefer to buy these in India or Thailand. Both countries have excellent tailors.
If you ever visit London again, drop me a line and I’d be happy to give you some recommendations to make your trip both cost effective AND fun!
Thanks for the recommendations. I’ll check the budget stuff out.
You should try eating at some of the “posh” restaurants once a month or two and check them out! Could be fun and expanding.
I will let you know next time I’m there. tx!
I’ve never been to London but I’ve always wanted to visit. I’m making a mental note to save up before I go now. Christ, the cost of living there must be outrageous!
I’ve been to London and love it. Given I stayed in a hostel (about $25-$30 per night USD) and searched off the beaten track for delicious ethnic foods on the East End and enjoyed the many free museums while touring, I didn’t find it as expensive as my time in Paris a few days later.
I have seriously considered if London will be a longer term stop some day in my future.
I’m too old to stay in a hostel Eric. But, if you are down with that, then more power too you!
We spent 2 nights in London 4 years ago (exchange rate was aprox 1 pound = $2), and no way spent that much.
We stayed in a chain hotel a few blocks away from a tube station. We bought half price theater tickets from the same day seller in the tube station. We went to the British Museum (free) and ate at an Indian restaurant on Brick Lane (our favorite local Indian restaurant is just as good). Otherwise we ate pub food or street food.
After that, we picked up our rental car and headed Southwest to Devonshire (stopping at Stonehenge along the way). I actually remember Bath being the most expensive place we visited on that trip, but that may be because Bath is lined with high end shops and we avoided those areas in London.
Hmmm, guess I need to do some more budget traveling research before going next time. Glad you found it to be good value.
I know NYC is expensive as I’ve lived there. However, London is 15%-20% more expensive than NYC imo!
Haha, nice. What were you doing there? Get me out I hear ya saying!
My last real foray in Europe was when I was 6 years old. Other than a layover in Amsterdam last year, haven’t been. $40 just for a breakfast there! ;)
One day I want to do an Eurotrip, but that one day will be when I can afford it, haha! Until then there are a lot of places on the world that are also very interesting, and don’t cost a fortune…
Wow! I’m thinking of going for a week to Amsterdamn this fall. $40 breakfast sounds crazy! Your eggs come with beluga caviar? Euro railing is muy expensivo.
As a Londoner, I have to ask why oh why you decided to go to the most expensive places in London. And I’m talking Russian oligarch expensive here.
The Dorchester Hotel is reknowned as one of the most expensive hotels in London, up there with the likes of The Ritz and The Savoy. Think about it. There’s a reason, a very good reason, why Mayfair is blue on the Monopoly Board. Nobody in their right mind spends more than two seconds oggling the Ferrari shop on Park Lane before moving swiftly on to the much cheaper areas very close by.
Secondly Piccadilly Circus for dinner?? That’s crazy. Soho is right next door with oodles of extremely low-priced restaurants. And Bermondsey Street? That’s right off Tower Bridge, close to the City and thousands upon thousands of bankers with money to burn. You’d have had a much cheaper dining experience in nearby Lambeth.
London cabs are also outrageously expensive (and they’ll set the meter higher the moment the hear an American accent). The London bus network is extensive, efficient, extremely simple to use and much cheaper than a tube. Buying an Oyster card as opposed to a ticket makes travel much cheaper. (Oyster cards are also a good way of currying favour with local Londoners- there’s nothing we get angrier about than tourists who spend an age putting their ticket into the machine at tube station barriers).
As for living in London? For the significant numbers of us who rent, London is a tough place to live. The cost of rental properties are rocketing here at a faster rate than anywhere else in the country. The cost of living is also much higher (higher grocery and travel prices).
As for owning property in London to sell on in the future, the recently increased stamp duty will definitely dampen those plans. As for savings? Take a look at our rock-bottom interest rates and decide for yourself just how rosy the future looks for British savers.
Oh, great, so NOW you tell me not to stay at The Dorchester, go to Piccadilly Circus for dinner, and take a bus instead! Thanks a lot! Where were you before I went out?
Could you tell me what the range is per month for a well-located (in London pls within 25 min of downtown) 2 bedroom, 2bathroom, 100-125sqm (1,000-1,300 sqft) condo cost to RENT and to buy?
It’s about $3,500-$4,500/month USD here in SF for really solid locations. thx
I thought I’d share my thoughts regarding housing costs as this is something that I pay attention to as a property investor here in London –
Generally speaking a 2 bed 2 bath condo (flat) in the UK wouldn’t be in the region of 100-125sqm!
For us 100-125sqm is the size of a good sized 3 bedroom HOUSE! Personally I have a large 4 bed house, which at 175sqm is considered to be quite big. 2 bed 2 bath flats are normally in the region of 60-90sqm in size. As you can see, we do tend to live in smaller spaces, generally because we’re an island with limited land. Still, our places are bigger than in Hong Kong!
Costs vary wildly in London depending on what district you’re in. To purchase something like a 60-90sqm flat, you could go as low as £160,000 (i.e. Croydon, Lewisham, Tower Hamlets) to as high as £2,000,000 in places like Mayfair, Kensington, Belgravia. But call it in average of around £300,000 – £400,000 for a 2 bed 2 bath in what I think would be an ok neighbourhood (i.e. Ealing, Acton, Shepherds Bush, Hackney, Stoke Newington, Brockley, Wimbledon, etc).
To rent, probably about £1,400 / month+ for somewhere ok at this sort of size but once again very variable depending on which neighbourhood you live in.
Seems pretty reasonable to me!
So is your 175sqm house much higher than 2 million pounds then?
1,400/month in rent seems VERY reasonable for a 2/2 in a good location in London! PErhaps I’m wrong!
Actually I bought in a cheap (I would say underpriced) area (border of tube map zone 2 and 3 South East London) so it cost me the same amount as a small 2 bed flat in a more expensive area (i.e. somewhere like Fulham, Zone 2 West London). The house itself is currently worth in the region of around £450k.
There’s a huge price difference involved based on location, and also proximity to a tube station. SE London has generally not been well connected on the tube for historical reasons and hence prices are lowest in this corner of the city (even though there is plenty of alternative transport via train – I can be at London Bridge in 8 minutes for instance). Interestingly my area is marked as being on the plan for a tube line extension in about 5-7 years time so for the long haul I’m gonna hang onto this one as the property price will soar once that happens.
There are a few areas in London that are undergoing gentrification – once down at the heels areas are now in vogue. Areas coming up now are places like North Kensington, Shoreditch, Hackney, Bethnal Green, Dalston, Ladywell, Brockley, Shepherds Bush, Kings Cross.
Also you can get some real bargains here if you put in the time to look around and are willing to do some DIY or get the builders in to do a refurbishment.
Richard I think you know an awful lot more than me on this front! My boyfriend bought the house I currently live in. 4 bedroom house for £350,000 (a bargain!). However it’s in a cheap area (Seven Sisters) around 20 minutes from a tube station and it needs considerable investment. A house of a similar size in nearby Stoke Newington would have cost him much more.
In terms of rent, it really depends on location. This site can give you some idea about the variations by postcode
I’m curious about the rent. Is rent as insane as purchasing property? I’d also be curious about groceries? I would think that the people living there aren’t all wealthy. They probably know where to buy groceries on the cheap, eat at a local pub, and just walk everywhere. I’ve been to London and Edinburgh, Scotland once. I loved it – but it was much too chilly for my liking. It’s always interesting comparing the European lifestyle to the American one.
Ick, I really don’t like London… right now I’m living in Edinburgh and I lurve it. Yes, the UK is more expensive than the States for day-to-day living, but if you cut back on certain things it can be cheaper overall. It just takes a lot of planning :).
Do tell us about Edinburgh! Rent, housing costs, what to do there! Never been.
It looks like you can get a 1 bedroom flat for about £600 a month. I’m currently looking at a small bedroom in a five person flat for £300, including utilities, but it’s definitely more suited to a student like me than a professional, and it’s not in the city centre. £200k looks pretty average for a flat in the city.
As for things to do… there’s a series of festivals during the summer that draw a ridiculous number of tourists. The Fringe festival in August is the most popular, with comedy, music, theatre, and dance…. 2,500 shows from 60 countries. Other than the festivals, there are national museums, galleries, historical buildings, pretty much all of the normal stuff. It’s more ‘doable’ than London because it’s much more compact. You can pretty much walk everywhere, or get a day bus pass for £3.20.
$900US sounds cheap! But alas, it isn’t London or is it? Glad to hear things are pretty affordable then if one can look deep enough.
Prices have gone UP on everything in Bangkok. I’m not positive about the 3 for $99 (mostly because I don’t use the tailors), but I’m pretty sure and will make it a point to take a closer look next time I go out.
Lord Jim’s buffet is outstanding. Toss up whether that one or the one at the Peninsula is better. We usually descend on the buffets on Sunday’s to replace all the calories we’ve avoided during the week :)
For those that do not eat sushi – the Peninsula may be better. I was there about 3 years ago for lunch and what they had was great. HOWEVER, they did not have any sushi or sashimi – maybe things have changed.
For breakfast my favorite buffet is at the Shangir-la – great service, great location and very good food. Virtually everyone that eats there is staying at the hotel – something I definately do not to – way to much money for me.
I am definately willing to go to eat at a luxery hotel – I am not willing to pay the $$$$ for a luxery hotel room though. We did stay 5 nights at the Intercontinental hotel a few years ago – but – we used POINTS. We showed up with our backpacks – but will still treated wonderfully.
London is cloudy, cold and dreary. Next time come to Bangkok and you can have an executive suite at the Oriental for the same price as the Dorchester, get an amazing Indian meal for just $15 and have your pick of tailors who will make you 3 shirts for $99. Oh, and a taxi across town will set you back all of $3. And if you miss London there are plenty of Brits here escaping the cold and expense back in the UK.
Wow have prices gone UP on shirts or do you use an expensive tailor? (Or possibly your just putting an approximate price.)
I have had suits and shirts made at Narry’s on Sukhimvit and am very happy with the quality.
I got 5 shirts made for $100 2 years ago at Narry’s and I love wearing them.
Bangkok is a GREAT city – we have been there about 10 times over the last 15 years. Flights in and out of Bangkok and then we visit Laos, Vietnam, Malaysia, Cambodia.
We love Lord Jim’s Buffet lunch at The Oriental – lots of delicious sushi!
I went to London maybe 4 or 5 years ago. It was crazy expensive then and I see things haven’t changed! It’s a fun city to explore but money disappears way too quick there. At least a lot of the museums were free! :)
Never been to London. However, I would love to go an EPL game and try some of that Indian food. I am looking at going to Hawaii for an extended vaca. Have you been there? Cost of living way more than the Mainland?
Thanks for the BIG LOL!!!!!! Yes I heard about so low level chain hotel (do not remember the name) that was going to be over $800 a night during the Olympics!
London is ridiculous! I’ve been there a few times and dislike it more and more. I can’t enjoy a 9 dollar small beer(that’s also warm). I went to Thailand and lived like a King for two weeks spending barely $100 a day.
Btw, I have been to Shalamar in SF and that place is awesome! (Although my friends and I did coin the phrase Shalamar as taking a huge dump after eating there, haha)
Hahaha, nice! I’ve since tried to avoid Indian food….. rocks the stomach way too much! What were you doing in SF and London?
Have some good HS friends that I visit in SF once a year(probably head up in a month or two). I only go to London when I’m forced, stopped for a few days before I studied abroad in Hungary, family wedding, etc… Never want to go back haha