London is an amazing place to visit with its many attractions and shops a plenty. Thousands of people from around the world visit London each year to see what it has to offer. There are many reasons why London is such an expensive place to live or visit. It currently comes in at number 13 out of 338 countries in the world for being the most expensive place to live. It is presently 15% cheaper to live in Paris and 16% cheaper to live in Singapore than it is to live in London. But why is this? Below are some reasons why it is cheaper to live outside the capital:
London is the financial capital of the world
London is an expensive place to live and one of the main reasons is because it is the financial capital of the world. Its markets capture both Western and Eastern time-zones which allows it to gain capital faster than other countries in the world. London will continue to be the financial capital due to the UK offering a far superior university education in economics and finance. The UK attracts students from all over the world to study economics and then employs many of them meaning that many of the best economists continue to live in the UK.
Many big businesses have headquarters in London
London is a very popular place for major businesses and corporations to keep their headquarters. Companies such as HSBC and Thomas Cook have their headquarters in London. This in turn attracts some of the world’s richest people. Any economist will tell you that market forces plus lots of money equals higher prices.
London is also the perfect place for small businesses to start due to the number of tourists that visit the capital all year round. This means that empty business premises don’t stay empty for long as they are quickly snapped up by the next entrepreneur. This in turn raises the price of the shop’s rent. We spoke to London business Presto Coffee who said: “Shops in London can charge a much higher price than the rest of the UK making it a popular place to open a new business.”
London is a good place to work
The price of land in London is excessively high due to it being an ideal place to work and live, particularly if you want to work in economics or other well-paying jobs. This increases the demand for housing which in turn increases the price of land. If you compare the price of land in other areas of the UK to London, the other areas – although some may be high – will not be as high as the price of land in London. For example, a small one bed flat in London can cost approximately £400,000 compared to a one bed flat in Durham which would cost approximately £60,000. The rest of the country is the perfect place to live if you do not want to live in the capital and you would like a good lifestyle. This is because the land is less desired so therefore sells at a cheaper price.
London has a diverse history and culture
Not only does London attract the wealthy due to it having many business headquarters and it being the financial capital of the world, it also attracts many visitors due to its diverse history, culture and attractions. Some of the popular London attractions include Big Ben, The London Eye, Tower Bridge and Buckingham Palace. People from around the globe have London on their must-see list due to the number of historical interests such as Westminster Abbey, The Churchill War Rooms and The Tower of London. These attractions and historical interests are made even more popular due to the ease of getting from attraction to attraction. You could take a trip on the super quick underground, travel in a London cab or take a ride on one of the fabulous London buses. If tourists stopped coming to London, prices would drop which would make it a cheaper place to visit or live.
People buy the overpriced products
The price of products in London are almost double the price of the same product from a shop in another county. One of the main reasons it costs over £3.00 for 12 eggs in London compared to approximately £1.50 in the rest of the UK is because people still buy the products. If everyone refused to spend so much and found somewhere cheaper to shop, shops would quickly reduce their prices to get back the business they have lost. The problem with this is that most people don’t have the time to travel out of the city centre to pick up a cheaper pack of eggs or a can of coke so spend money on the more expensive items to save time. This in turn means that the shops can continue to charge the extortionate prices.
London is definitely one of the most expensive places to live compared to counties in the UK and the rest of the world. Research from consumer credit broker Cashlady.com has shown that due to the cost of living in London, many people find themselves in debt and often have to turn to short term loans to pay bills. However, there are many positives about living in London such as wages being higher and all of the shops you could need being close by; these positives make it a popular location to live in. It is also popular with business men and women as many businesses have their headquarters there and it is the financial capital of the world. London is not only popular with people who live there, it is also a very popular destination for tourists who are willing to pay that bit extra to see all of the sites. It offers many attractions that people will travel around the world to see. Due to its popularity with both tourists and people who want to live there, shops and landlords in London can charge a higher price, which in turn makes it an expensive place to live and visit.