Renting in London for the first time is an exciting experience - the city has so much to offer and you’ll find places to go and things to do you never imagined - but it can be notoriously expensive.
Paying rent can use up as much as 72% of your average monthly income if you’re not careful, though there are ways to avoid paying overpriced rent - what you pay for your apartment or house isn’t the only cost of living in London. There are other outgoings to bear in mind.
Here at Dolphin Square, we’ve compiled this handy list of 5 other costs to take into account when you’re figuring out your budget for living in the capital:
- Bills and subscriptions: Like utilities, taxes, internet and your phone.
- Household items and Essentials: Everything from toothpaste to loo roll.
- Transportation: Porsche or Boris Bike, however you get around.
- Entertainment and activities: Nights out, tickets and music.
Personal care: Healthcare, gym membership, pamper sessions and your essential toiletries.
Budgeting For London living
It can really help to actually sit down and write out a budget for your spending each month, so you can see if there are areas where you can tighten your belt and make those pennies available somewhere else that matters more to you.
If that doesn’t sound fun to you, there are good free budgeting softwares available to use, which do the heavy mathematical lifting, so that you don’t have to.
Consider each of these potential areas of cost and how much you spend on them on average each month:
1. Bills and subscriptions
These are a key aspect of any living situation and will most likely be your second or third highest outgoing after rent itself. There are the basic utilities, such as energy consumption each month for gas, electricity and water. You can get fixed rates or ones that change depending on the season (as gas and electric usage is likely to be considerably higher in the winter months).
Shop around and speak to your provider to make sure you’re getting the best deal, and that the rate isn’t going to suddenly go up one month without you realising.
Most properties will be subject to a council tax bill, which covers a percentage of the cost of local services like street cleaning, waste disposal, recycling, policing and fire service, as well as park maintenance and support for vulnerable people. The cost of this will depend on which council tax band your building is in.
If you’re sharing with other flatmates, figure out the total of all these household bills and what percentage of that you’re each responsible for.
Some rentals come with utilities, council tax and sometimes even Wi-Fi already included in your rent, saving you the hassle of sorting them out.
Don’t forget you need to pay for a TV licence if you ever watch television live, even if it’s on a laptop, tablet or smartphone. If you’re paying by direct debit, you can choose whether to pay for a full year upfront or make smaller monthly or quarterly payments.
You’ll need to pay National Insurance and income tax if you’re making over certain thresholds (£183 a week and £12,500 a year respectively). If you’re self-employed it’s important to make sure you’re keeping some money saved to pay your annual income tax when your tax return is due by the end of January each year. Another thing to consider, if you have one, is that you might be automatically repaying your student loan.
It’s also likely that you’ll have personal bills to add onto your monthly spending amount, including your phone bill and any subscriptions you might have such as Spotify and Netflix.
Remember to update to your new address on your bank account and IDs - if you don’t update your driver’s licence to say that you have moved you could be fined £1000 by the DVLA.
2. Household items & essentials
These are the sorts of items which you sometimes take for granted, picking up bits and pieces as you pass the shop on your way home from work. Most of these are essentials or just make your home a nicer place to be - but they do add up, so forgetting about them can leave a black hole in your budget.
Consider how often you do a food shop and how much you’re spending. Is it every week? Every two weeks? Do you always spend about the same or do you need to take into account special occasions you might host or cater for, giving yourself a little financial wiggle room so you don’t just have to live off oats by the end of the month after your best friend’s birthday.
Remember basics such as toilet roll, kitchen roll and other household supplies. These will also include things like sponges, antibacterial spray, toilet bleach, washing up liquid, laundry detergent and floor cleaner. You’ll most likely have some initial investments to make on things like a mop and bucket, broom, dustpan and brush and a vacuum cleaner if you don’t already have these.
Do you like to look sharp? Enjoy some retail therapy, either in person or online when you’re definitely not procrastinating while working? Figure out how much you spend on clothes a month and set yourself a clothing allowance.
You can transform your rental from a house to a home with some small touches. These might include houseplants (with pots and soil), art and frames and furniture. These don’t have to cost a lot but they do cost something, so should be considered.
There are all sorts of lovely markets in London where you can pick up vintage furniture and make your space more personal. Dolphin Square even has an onsite shopping arcade.
Transport in London can vary hugely and so can the cost. You might live right by where you work (or work from home) and not have to spend a penny on your commute. Perhaps you cycle or walk everywhere? Or maybe you drive? Or love the Tube?
Consider some journeys that you are likely to make on a regular basis. These might include your commute, your trip to your best friend’s, to your favourite restaurant or bar or your monthly visit further afield to see family. Whatever the reason, have a look at how you would get there and how much it would be.
If you drive there are all of the upkeep costs of a car to consider, not just fuel. These include the MOT, maintenance, road tax, congestion charge, insurance and parking. This last one can be a big expense in London, so make sure it’s worth your while having a car in a city with such great public transport.
If you’re a committed Londoner then it’s likely you’ll be a regular on the TFL (Transport For London) journey planner. Whether you hop on and off the iconic London buses, ride the famous London Underground or pedal about the place on Santander Cycles (or Boris Bikes as they’re still referred to by most locals) then you’ll be spending your pennies on getting about the sprawling metropolis.
If you don’t want to be counting every journey you could try to keep track of your average monthly spending on transport so that you can put that in your budget.
The location of your home will have a big impact on how much transport in London costs you. Dolphin Square is located right next to Pimlico Tube Station, as well as being right in the heart of the city, so it’s well connected to a lot of places and you’ll be less likely to spend unforeseen amounts on late night Ubers or Black Cabs.
4. Entertainment & activities
You’ve considered how much you’re spending getting to places, now it’s time to think about what some of those places might be! This has never been more erratic than throughout COVID, but it’s still something worth counting in your budget.
How often do you eat out a week? How much on average do you spend when you do? Perhaps you’re enjoying delicious, inexpensive street food or high-end fine dining experiences as you might find in Kensington or Westminster, just a 15-minute walk from Dolphin Square.
Do you spend your evenings in cafes, local pubs or wine bars? Bringing a bottle to a friends’ house or maybe staying in and getting takeaway?
How much do you spend on tickets each month if you go out to see live jazz, theatre shows, spoken word, DJ Sets or the newest cinema blockbuster? Do you like to treat your friends or colleagues?
Do you have any unusual hobbies that you like to spend your money on? Make sure you’re taking into account what you’re spending on your paint-balling membership, scuba suit rental, or your juggling ball collection.
Try to have a rough idea of what you might spend on birthdays or special occasions for your friends and family (and people at work). Christmas or whatever holidays and festivals you celebrate can sneak up on you financially, and the last thing you want is to make January even bleaker by running out of money in your budget!
5. Personal care
Last on our list, but by no means least, is the money that you spend on personal care.
Consider what you do or might spend on health costs. If you have access to the NHS, there’s a chance you’ll still be required to pay for your own prescriptions - so think about any recurring medication you take, any contraception you purchase or if you see any specialists not covered by the National Health Service.
There are essentials to remember to count, including toothpaste, soap, shampoo and conditioner, moisturiser, make-up, deodorant and whatever else you keep in the bathroom cabinet.
How often do you get your haircut, brows waxed or your nails done? How much is a close shave worth to you?
It’s worth asking yourself what it costs to keep yourself looking and feeling as you like to.
What do you spend on exercising? Remember that basic gym membership may not be your only cost - you might pay for extra yoga or fitness classes, or entry to the swimming pool. It’s also likely you’ll need specialist equipment for looking after your body - ranging from a good pair of trainers or goggles all the way up to a full home gym set up. Don’t forget work-out attire when you’re thinking about your clothing allowance.
You might want to budget some money for relaxation - spa treatments, meditation classes or mindfulness workshops. You deserve it.
Quick tips for getting more bang from your buck
There are a few other cheeky tips to save money on living costs in London.
There are discount codes you can get your hands on through websites such as Groupon. You can usually find good deals on experiences, such as massages or admission fees - though you might need to attend them during off-peak time slots.
If you’re a student there’s a whole world of money-saving opportunities available to you. Having a student ID card from your education institute, or an NUS card from the National Union of Students, can see you getting an average 10% off admission charges, tickets and even clothing shops. Check out the NUS Extra app for even more deals.
If you’re not a student, don’t worry! There are still plenty of discount apps out there. Groupon has its own and if you get Honey it will autofill any discount codes it finds for outlets while you’re shopping online.
You can also discover your new favourite dinner spots while getting discounts and helping to prevent food waste - all at the same time! Just download TooGoodToGo. This app pairs up foodies who are hungry for a bargain with local cafes and restaurants wanting to find a home for food at the end of the day, for a fraction of the cost.
So there you have it, 5 key costs to factor in as well as rent when you’re considering where and how you’re going to afford to live in London. A bit of basic budgeting can save you later headaches and give you peace of mind, meaning that when you do treat yourself - you’re not going to regret it later on down the line.
Being smart and savvy with your spending can make London a much more rewarding and comfortable place to live.
Count your monthly bills; your treats; your taxes; your eating and your travel habits. Remember that your salon visits and your Zumba leggings cost money too, as well as the generous rounds for your work team. You don’t have to be scared about spending in London if you make sure there are no nasty surprises.
So make the most of your first time renting in this colourful, vibrant and exciting city. You can also take a look at our first-time renter’s checklist to make sure you’ve got everything in order before you begin your residential adventure!