Cost of living in the UK – Where should you live in the UK? (2019 guide)

Cost of living in the UK – Where should you live in the UK? (2019 guide)

Cost of living in the UK can put a massive strain on your capacity to save and invest.

So I figured, why not analyse the cost of living in the most popular UK cities to figure out…

1. Which city has the lowest cost of living?
2. Which city offers the highest disposable income? (Best place to live to FIRE)
3. Which city takes the shortest time to save for a deposit?

Let’s dive in…

Which city is the cheapest to live in? (lowest cost of living measured by average monthly spend)

Data from the above and following tables is taken from Numbeo & Land Registry before being hand cranked by the Money Nest crew.

As you might expect cities in the North and Midlands rank far higher than most southern cities, with London unsurprisingly holding the title for the city with the highest cost of living followed by Oxford & Brighton.

You might be wondering:

What about salaries?

The problem with ranking by cost of living, is that it doesn’t take into account salaries.

For example whilst London has the highest cost of living in the UK, we might assume it’s salaries are also far higher than Hull. So what might the table look like with salaries included?

Want to know the best part? I’ve already gone ahead and cranked the numbers have a scroll down to see which cities rank highest for disposable income:

Which city offers the highest amount of disposable income?

What happened to Hull!? Suddenly the map is less dominated by the Northern & Midlands as the Southern cities such as Reading, Southampton and Bristol swing into battle with salaries high enough to offset the higher cost of living.

But what if you’re also interested in owning your own home one day?

With such high prices in the south how would the table look if we sorted by the shortest time to save for a deposit?

You know what’s coming…!

Which city takes the shortest time to save for a deposit?

Guess whose back! The North, Midland and Scottish cities charge back once again with house prices so tantalising low the higher salaries ‘down south’ can’t compete. Could an interesting strategy be to save up in a town like Reading when you’re young and then move to a cheaper city ‘up north’ to purchase your first home.

What’s interesting here is the impact average salaries have.

An average apartment in Edinburgh for example costs around £10k less than in Reading, yet…!

Since average salaries are also £400 less the Scottish home buyer wouldn’t be able to afford a deposit with 4.5 x annual income and a 10% deposit (4.5x is the max most mortgage lenders will lend) so is forced to make the shortfall which massively increases the amount of cash needed.

This is one of the reasons why couples who purchases with dual incomes have a huge advantage over individual buyers since two salaries can command a much higher mortgage offer.

The deposit dilemma

Over the past few decades it’s become exponentially harder to purchase a home.

Salaries have increased far below the rate which rents have increased forcing renters to rent for longer before they can buy and when they do face even higher property prices which in times of inflation are leveraged to benefit the home owner whilst putting the chance of home ownership further and further away for the first-time buyer.

To illustrate this I’ll leave you with this infographic:

Enjoy that?

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Then leave a comment telling us where you live and why…