Cost of Living Survey
Prior to moving to London, I did a lot of research. I even looked that the Mercer Consulting survey about the cost of living here. However, I never fully appreciated how expensive it was until I lived here full-time.
London hits No 2 slot in high-cost league
By Scheherazade Daneshkhu, Economics Correspondent
Published: June 18 2007 03:00 | Last updated: June 18 2007 03:00
London has become the second most expensive city in the world to live in – just behind Moscow – because of a sharp rise in rents.
The UK capital climbed three places into second position in the league table of 143 cities in which to post employees, published today by Mercer Human Resource Consulting.
Yvonne Traber, a senior associate at Mercer, said: “Steep property rental costs, together with the strengthening of the British pound compared with the US dollar, have contributed to the city’s high ranking.” Sterling was 11 per cent higher against the dollar in March 2007, when the survey was conducted, against the same month last year.
The cost of renting an unfurnished luxurious two-bedroom apartment in London is £2,000 a month, according to the survey. That is twice the price of an equivalent flat in Madrid, Rome or Sydney, but not as expensive as equivalent accommodation in Tokyo, Moscow and New York.
The strength of sterling contributed to other UK cities also becoming relatively more expensive. Glasgow moved up from 60th place to 36th and Birmingham was ranked 41st, up from 69th last year.
Mercer’s annual survey of prices is designed to help companies work out how much to pay employees when they are posted abroad. The items in its basket of goods includes the rent on a luxurious two-bedroom apartment, clothing and entertainment.
The survey’s results can lead to dissatisfaction among expatriates working in cities that are growing relatively more expensive unless their companies compensate them for the extra expense.
The weak dollar, which fell against the euro by 9.2 per cent in the year to March 2007, raised the cost of an expatriate package in Europe relative to US cities. Moscow remained the world’s most expensive city for the second consecutive year. Copenhagen, Geneva, Zurich and Oslo all made the top 10.
North American cities dropped sharply in therankings because of the greenback’s decline. New York fell out of the top 10to rank 15th, while Los Angeles was the only other North American city in the top 50.
Currencies with a dollar peg were also affected. Dubai moved down sharply, to 34th position from 25 last year, mainly because the United Arab Emirates dirham is pegged to the dollar.
In Asia, Seoul, in third place, maintained its lead over Tokyo for the second year running, while Osaka moved down two places to eighth position. Hong Kong also moved down one place to five.
Chinese cities slipped down the rankings because of low inflation and stable rental prices and a 6 per cent fall in the renminbi against the euro.
But rising accommodation costs pushed up the expense of an expatriate package in Singapore, which climbed to 14th place from 17th, and in Mumbai, which jumped to 52 from 68.
At the other end of the table, Asunción in Paraguay came bottom for the fifth consecutive year, with a basket of items costing half that of an equivalent basket in New York.
Rebecca Powers, a senior consultant with Mercer, said: “There have been some significant changes in the rankings since last year. These are primarily due to exchange rate fluctuations – in particular, the weakening of the US dollar and strengthening of the euro. But the gap between the world’s most and least expensive cities appears to be narrowing.”
Copyright The Financial Times Limited 2007