London cheaper option for expats in global cost of living rankings

Credit card payment-2Living in London as an expat has become a more attractive choice on the basis of the cost of living in 375 global cities.

London has moved down from 12th to be 17th most expensive city to live and work as an expatriate in the annual rankings by HR and consulting company Mercer.  But it is still the most expensive city in Europe with the exception of those in Switzerland – Zurich, Geneva and Bern are higher up the cost league.

Other UK cities have also become comparatively cheaper.  Aberdeen has move down to 85 from 82 last year and Birmingham is 96th in 2016 compared to 80th in 2015.  Mercer say that the strength of the pound against the dollar in the past 12 months has been a factor as dollars are used as the base currency for calculations.

The most expensive city in the world for an expat is Hong Kong, according to Mercer research. Last year’s most expensive city, Luanda, drops to second place.  Five of the top ten are Asian cities, three of them in China.

Mercer Cost of Living Survey 2016 – 10 most expensive
City Country Continent
1 Hong Kong China Asia
2 Luanda Angola Africa
3 Zurich Switzerland Europe
4 Singapore Singapore Asia
5 Tokyo Japan Asia
6 Kinshasa Dem Republic of Congo Africa
7 Shanghai China Asia
8 Geneva Switzerland Europe
9 N’Djamena Chad Africa
10 Beijing China Asia

In Europe, apart from the Swiss cities and London, the only cities in the top 50 globally are  Copenhagen, Paris and Dublin.

Mercer Cost of Living Survey 2016 – Europe’s most expensive
City Country
Zurich Switzerland
Geneva Switzerland
Bern Switzerland
London UK
Copenhagen Denmark
Paris France
Milan Italy
Vienna Austria
Rome Italy
Oslo Norway

The survey looks at the cost of 200 items in each city including housing, transport, food, clothing, household goods and entertainment.  The cost of housing helped push Hong Kong to the top of the rankings, but London comes out as expensive for a number of everyday purchases.

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Source data

See also

London expensive? Not compared to being an expat in Luanda

How London compares for the cost of public transport

London may win for iPhone earning power over Poland but cost of living much higher

How London compares for the cost of public transport

Taxi Bus Tube-2-1London is the third most expensive for public transport out of 71 cities globally, according to a survey by the financial services company UBS.

As part of its annual prices and earnings survey UBS looked at the cost of getting around a city. In order to get a like-for-like comparison the company took the cost of a single ticket on an underground system, bus or tram for a journey of 10 kilometres or 10 stops.

Urbs Media looked at the data paying particular attention to 20 cities with strong connections to London or those in countries that had significant migrant populations living and working in the UK.  (See the table below).

Copenhagen is the most expensive for public transport, followed by its Swedish neighbour, Stockholm, and then London.  New York and Paris are both cheaper, but people who have moved to the capital from Warsaw, Bucharest, or New Delhi will notice a big price difference.  Kiev has the cheapest public transport of any city surveyed.

The results do not take account of the lower prices for season tickets, which would reduce the cost in London and in other cities too.  Nor does it factor in the quality or reliability of the service.

City Public Transport ($US) Taxi fare ($US)
Berlin 2.89 14.78
Bucharest 0.46 3.31
Copenhagen 4.63 15.43
Dublin 3.31 11.35
Geneva 3.12 20.58
Hong Kong 1.28 3.65
Johannesburg 0.79 6.34
Kiev 0.16 1.59
London 4.04 10.09
Madrid 1.98 11.35
New Delhi 0.37 1.54
New York 2.75 11.67
Oslo 3.80 32.10
Paris 1.95 12.43
Rome 1.62 14.24
Stockholm 4.17 18.56
Sydney 2.58 11.52
Toronto 2.43 15.88
Vilnius 0.90 4.52
Warsaw 0.91 5.64

London comes out a little better for the cost of taking a taxi. Looking at the price of a 5 kilometre cab ride within the city, New Delhi offers the cheapest option. London is more expensive than Hong Kong, Bucharest and Warsaw, but cheaper than Sydney, New York, Paris, Rome, Madrid or Berlin.  But none compare to the astronomical cost of a cab ride in Oslo – three times the price of London.

UBS conducted the survey in March and April 2015.  It has carried out the price and earning survey annually since 1971.

Source data

See also

London may win for iPhone earning power over Poland but cost of living much higher

The way we spend our cash – more rent, less alcohol, healthier eating

London expensive? Not compared to being an expat in Luanda

Poor sustainability and high cost public transport mar global cities win

Rent strike highlights students’ plight but many young people are worse off

montage 7Students at UCL are holding a rent strike to try to force the university to cut accommodation charges. They want their rent at halls of residence reduced by 40%.

The group UCL Cut the Rent says that collectively they are withholding £250,000 until their demand is met.  They say that rents have increased by 56% since 2009 and accuse the university of profiteering.

The group says that many students struggle to pay the rent, pushing them into debt and poverty which affects their studies.  While students may be struggling financially, the plight of young people trying to find affordable housing in the capital is a wider issue and the data for earnings and private rents shows that there may be many who are worse off than students.

The rent for a single room at UCL’s Max Rayne House student accommodation in Camden is £135.59 per week.  This is inclusive of bills such as heating, water rates and council tax.   At Ramsay Hall in Bloomsbury the weekly, single room rent is £209.79, and the rent here includes bills plus breakfast and dinner each weekday.

These fees may be beyond the reach of students, but if they were renting in the private sector in Camden they would be facing far higher rents.

The latest data from the Valuation Office Agency, which advises the government on property and rental values, shows that the median rent for a room in a shared house in Camden is £683 per month, or £157 weekly.

Some cheaper options may be available.  VOA data shows the rent in the cheapest 25% of property is £628 a month or £144 weekly.  These rents do not include any of the bills a person has to meet in private accommodation.

There is no doubt that a student with a maximum maintenance loan of £10,702 will struggle to live in London.  The loan is intended to cover living expenses for term time plus the Christmas and Easter holidays, as most students work over the summer. A maximum loan means an income of £267 for 40 weeks.  The rent, inclusive of bills, at Max Rayne House would absorb 50% of this income.

Most students supplement their loan income by working part time. A survey by Endsleigh Insurance of 4,600 students puts monthly earnings on average at £316 or a little over £70 a week.

For those not in education, someone over 21 earning minimum wage who is working full time, 40 hours per week, earns a gross salary of £13,936. Across the year that equates to £268 per week.  Renting a room in a shared house in one of the cheaper Camden properties would take up 53% of their gross earnings. After tax and and national insurance the net earnings would be closer to £230 per week, so the rent would be 62% of income. Then there are the bills on top.

For 18-20 year-olds, earnings are lower with the minimum wage at £5.30 an hour giving a weekly income of £212.  Once again, this would be subject to tax meaning net earnings of around £192.

People on minimum wage may be eligible for some support. The government’s recommended benefits calculator suggests that a 21-year-old working full time for minimum wage, living in a shared house in Camden would receive housing benefit of around £30 a week.

Cheaper accommodation can be found in other parts of the city. The VOA data suggests that the cheapest boroughs for renting a room in a shared house are Greenwich, Bromley, Croydon and Lambeth. But a lack of affordable housing for young people has meant that many remain living with parents or return to do so after further education.

As previously reported by Urbs, the proportion of people aged 20-34 living with parents has climbed to 24%.

living with parents

The rent strikers of UCL have highlighted the struggle for students faced with the cost of living in London.  They are undoubtedly finding it tough but life for the poorly paid young people who are not in education may be even tougher.

Valuation Office Agency source data

See also

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More “affordable” homes but the rents prove unaffordable for many

Where are all the young people? The in-out flow of 20-something Londoners

Universities marked down by their own students

Housing the top concern in survey that reveals the worst and best of London

Flats Tom Gowanlockshutterstock_134424665-1-2-1-2

Photo: Tom Gowanlock | Shutterstock.com

A survey of nearly 4,000 Londoners has found that their greatest worry is the cost finding a place to live.

When asked to identify the worst thing about living in the capital 31% of the responses pointed to the cost of a housing and a further 28% to the general cost of living.

Just 8% say they are satisfied with housing in London. Their concerns cover the availability of low cost homes to buy and the high cost of rents. Only 10% believe that the homes being built currently are affordable for a range of people. As revealed by Urbs, much of the housing labelled as “affordable’ is beyond the means of many.

There is also dissatisfaction with the private rental sector. 71% of respondents said there is a lack of affordable private rental property and most are unhappy with the quality of the rentals that are available.

The survey is the second Annual London Survey carried out by City Hall.  It polled 3,861 people online at the end of 2015.  The participants were self-selecting but the data was weighted to reflect the gender, age and ethnic mix of London.

Around half the people polled have lived in the city for more than 20 years.  More than a quarter had lived in their local neighbourhood for the same amount of time.

Their other big concerns shown in the survey included 67% of respondents who said that they were dissatisfied with the fairness of wages, 62% unhappy about the affordability of public transport and 57% dissatisfied with air quality.

But there were some positives to living in the capital.  The thing identified by most was simply the huge variety of things to do.  Access to museums, galleries, theatres and live music emerged as one of the big pluses of London life for many.

Despite the problems, more people like rather that loathe London life.  Overall, 75% said they are satisfied with London as a place to live. But when asked about the future they came back to their chief concern: housing.  The issue most mentioned as the challenge facing the capital is building affordable homes.  It’s an issue that the Mayor himself has called an epic challenge.

Source data

See also

The jobs success and housing failure causing a crisis for the capital

Under 40s locked out of housing market destined to be “generation rent”

More “affordable” homes but the rents prove unaffordable for many

London may win for iPhone earning power over Poland but cost of living much higher

It takes 100 hours longer to earn enough money to buy an iPhone in Poland as it does in the UK.

This insight into earning power by researchers at the financial services company UBS helps to demonstrate why overseas workers find London an attractive city to find a job.

But their findings also show that while the earning potential may be better, London is an expensive city with prices much higher than they are in the place many Londoners once called home.

UBS took 68,000 pieces of data from 71 cities around world to put together an index which looks at costs and the spending power of people working there.

London is ranked as the 5th most expensive city after New York, Zurich, Geneva and Oslo and 6th most expensive if rents are excluded. When it comes to take home pay, the amount we earn after tax, London trails in 11th in the list.

And UBS came up with some interesting measures of spending power. Using a new iPhone as a benchmark they examined how long the average worker would take to earn the cash to buy one. In New York it takes 3 working days. In London it’s 41 hours, in Warsaw 141, but the longest labour was in Kiev.

Iphone earnings

Across the globe it is much quicker to eat a Big Mac than to earn the money to buy one. In London it takes 12 minutes and in Warsaw twice that. In Nairobi it’s nearly 3 hours.

Big Mac earnings

Many can happily avoid the indulgence of a new smartphone or a burger and the real cost of living is measured in essentials such as food and housing.

UBS looked at a shopping basket of 39 common food items including bread, milk, meat, fish and vegetables. Many arriving in London to work will have realised that it is much more expensive to feed the family, unless you have moved from New York or Zurich. The average global price for the basket of goods was $400. Prices were highest in Zurich and lowest in Kiev. London was 8th most expensive of the 71 cities

 

USB has published the Price and Earnings Index every three year since 1971.

See also

London expensive? Not compared to being an expat in Luanda

What National Insurance really tells us about London’s overseas workforce

 

 

London expensive? Not compared to being an expat in Luanda

Money changing handsIf you are one of the thousands of people from overseas who has come to live and work in London the city can seem expensive, but count your blessings that you have not been posted to Luanda. The Angolan capital is the most expensive place in the world to live as an expatriate, according to an annual study carried out by the HR company Mercer. London comes in at 12th in its cost of living rankings for 207 cities.

The bad news for those settling in London is that the only place in Europe they could have chosen that is more expensive is Switzerland. Zurich, Geneva and Bern all come ahead of London in the rankings.

Mercer measures the cost of 200 goods and services that include housing, transport, food, clothing, household goods and entertainment. Prices are measured against a baseline set by New York and currency movements are measured against the US dollar.

The Angolan capital, Luanda, topped the list for the third year in a row. Mercer says that despite being a generally inexpensive city imported goods that expats would expect are pricey and finding secure living conditions comes at a high cost. It is 1 of 2 African cities in the top 10 that also includes 5 Asian cities and 3 in Europe – all of them Swiss.

Mercer Cost of Living Survey 2015
City Country Continent
1 Luanda Angola Africa
2 Hong Kong China Asia
3 Zurich Switzerland Europe
4 Singapore Singapore Asia
5 Geneva Switzerland Europe
6 Shanghai China Asia
7 Beijing China Asia
8 Seoul South Korea Asia
9 Bern Switzerland Europe
10 N’Djamena Chad Africa
11 Tokyo Japan Asia
12 London United Kingdom Europe

Mercer says that Switzerland proved so expensive due to the strength of the Swiss Franc against the Euro.

London held its position at 12th. The next most expensive European city after London was Oslo at 38 followed by Paris at 46.

Asian cities climbed the rankings. Mercer points out that the high placing of Hong Kong owes much to the fact that the Hong Kong dollar is pegged to the US dollar which drove up the cost of living locally.

The strengthening dollar made US cities more expensive for expats but the highest placed American city is New York at 16.

Source data

See also:

Poor sustainability and high cost public transport mar global cities win

London ranked as top global city destination