The most expensive places to live in the UK: House prices, rental costs & desirable towns

The last few years have been expensive. Inflation sat above the Bank of England’s target throughout 2023 and only started to come under control as we moved into 2024.

What’s more, these costs will be more taxing in certain parts of the UK over others. Especially where property prices are particularly high. In London and the South East, for example, homeowners are spending nearly half of their income on their mortgages.

Renters in the capital were paying out 35% of their income on rent in late 2023, compared to an England-wide average of 26%. Meanwhile, landlords saw their mortgage interest payments jump 40%.

Property investment costs need to carefully be assessed in the current market. Which is why this blog will go over the most expensive places to live and/or invest in from multiple angles.

Source: Financial Times, The Telegraph, Financial Times, Mortgage Strategy

Most expensive places to live in the UK by region

London, unsurprisingly, is one of the most expensive places to live in the UK. In late 2023, the ONS House Price Index showed the average price of a house in the capital sat at £535,597 in August.

Following this was the Southeast (£393,417), the East of England (£350,728), and the South West (£328,413). The cheapest houses could be found in the North East, where average prices are sitting at £165,366.

Having said that, you’ll perhaps want to keep an eye on where prices are rising the fastest. The North East may have had the lowest prices at the moment, but it experienced the highest annual price increase in England in the 12 months to August. Average prices in this region grew by 3.6% during this period, while prices across Southern England dropped.

Also, across the entirety of Wales, the average house price was £216,726. In England, it was £309,616.

Of course, while house prices are a key determining factor here, you also need to focus on other costs associated with homeownership. With everything accounted for, homeowners in certain cities may end up paying out substantial amounts.

Source: ONS

Cities and towns

Recent analysis from L&C mortgages looked at the average house price in specific cities, while also factoring in other associated costs. This included average utility bills and taxes.

The results showed buyers in Westminster spend close to £1m on average for their living arrangements, making it one of the most expensive places to live in in the UK. The average house price in Westminster was £921,609 in mid-2023, while utilities, council tax, and mortgage costs came to an average of £4,916 a month.

After Westminster came St Albans. Here, average property prices was £577,642, with monthly bills coming to £3,214. In third place was Chichester, where the average home costs £477,709, and bills total £2,716 per month.

These kinds of figures, while important, must be considered alongside other market factors – such as desirability. Prices may be high in Westminster, but is there a high proportion of buyers looking to move to the area?

On this, Savills utilised the latest census data to create a list of towns that scored highest across several desirability factors. This included how many people in the area held high-end jobs, the state of their health and wellbeing, the costs involved, access to good schools, and more.

The majority of towns that ranked towards the top of the list are based in the South East. Harpenden took the top spot, where the average price was around £766,000. Cobham, with an average price of £1.17m, came in 2^nd place, followed by Beaconsfield (£1.07m) in 3^rd.

Source: Metro, The Telegraph

Most expensive places to live in the UK by rental costs

Of course, rents are also reaching sky high levels in certain towns and cities. In fact, as we moved into 2024, Zoopla found that the average rent for new lets in the UK sat at £1,223.

The most expensive place in the UK to rent in is London, where average rents hit £2,121. But, on average, rents rose by 7.8% over the last year or so. What’s more, many more regions were pushed into the £1,000+ a month club in recent months.

Just over half (51%) of rented homes in the UK are now in markets with average rents of over £1,000, with a fifth of rented homes in Scotland, the North West, East Midlands and West Midlands now sitting in areas with average rents above £1,000 per month.

To put this in perspective, a mere three years ago, nowhere outside of the South of England had an average rent higher than £1,000.

Source: Zoopla

How can specialist finance help with all this?

We’re living in perplexing times. House prices across the UK are under pressure at the moment. But at the same time, certain parts of the country are now so expensive that none but the wealthiest of people can live in them.

It gives property investors plenty of food for thought. For when they are ready to act, we have a range of specialist finance products at the ready to suit large investments, or bargain purchases.

For instance, our large loans can stretch to £50m where needed, allowing investors to capitalise on those parts of England or Wales that generate the highest prices. Meanwhile, our residential loans can be issued in as little as 3 days, allowing borrowers to jump on any rare low-cost opportunities quickly, before other buyers get a chance to act.