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Buying a house? Most affordable areas to live revealed

Where does your town or city rank for living costs?

Buying a house? Most affordable areas to live revealed

Affordability isn’t just about house prices; council tax, home insurance and energy bills will also hit your wallet.

By these measures, the most affordable place to live in the UK is Derby, while the priciest is Birkenhead in Merseyside, according to research from Compare the Market.

The comparison site looked at household bills in 80 of the UK’s most populated towns and cities.

Here, we explore the findings in more depth and explain why they don’t tell the whole story.

UK’s cheapest cities and towns to live in

The 10 cheapest areas, listed in the table below, contain some surprises.

For example, London may be famed for its high house prices, but according to Compare the Market’s research, it’s actually the eighth-cheapest city in terms of household bills.

City/town Average council tax Average home insurance Average energy bills Total average cost
Derby £1,591.68 £142.71 £1,134.42 £2,868.81
Edinburgh £1,705.42 £169.96 £1,061.59 £2,936.97
Southampton £1,724.11 £151.78 £1,080.80 £2,956.69
Swansea £1,792.92 £146.26 £1,094.80 £3,033.98
Newcastle upon Tyne £1,844.82 £138.24 £1,086.57 £3,069.63
Newport £1,834.09 £159.77 £1,096.23 £3,090.09
Aberdeen £1,768.07 £145.33 £1,202.21 £3,115.61
London £1,790.83 £206.47 £1,130.35 £3,127.65
Stoke on Trent £1,930.81 £129.15 £1,107.55 £3,167.51
Wigan £1,891.37 £149.90 £1,129.14 £3,170.41

While it may not be one of the 10 overall cheapest areas to live in, Exeter came up trumps for energy bills, with residents paying just £987.90 per year on average.

Those living in Norwich, meanwhile, have the lowest home insurance costs at £122.11 per year.

Cheapest area to live in London

The cheapest London borough to live in – with the heavy caveat that this is just based on household costs, not house prices or rent –  is Westminster. The average bills in the political heart of London come in at £2,036.54 a year, according to Compare the Market.

The priciest London borough is the suburban area of Harrow, where council tax and bills average £3,763.87 a year.

However, the differences in household bills could partly be down to property sizes, with people being more likely to live in a house in Harrow and a flat in Westminster.

House prices matter

When you look at housing costs, the story changes. The average home in Westminster cost £966,268 in October, more than double Harrow’s average of £458,003, according to Land Registry data.

Turn those prices into monthly mortgage repayments and the difference becomes obvious.

Using the lowest two-year fixed mortgage rate we could find at the time of writing (1.24% for a 75% LVR mortgage), a mortgage in Westminster would start at £2,810 a month.

In Harrow, your mortgage would cost £1,332 a month.

While cutting your household bills matter, so does your mortgage: find out more about remortgaging here.

Heat map: average living costs by borough

Hover over the boroughs to see the average total cost of council tax, home insurance and energy bills in each area of London.

Find out more: how to buy a house or flat in London

How to choose where to live

Of course, in reality, home insurance costs and council tax will only a small factor in your decision on where to live.

You’ll probably have a pretty clear idea of where you’d like to buy a house long before you start searching for a property, but if you’re tossing up between two or more areas it’s worth considering the following:

  • House prices: key to anyone’s house purchase decision will be property prices in the area. Our how much is my house worth? guide shows price activity by postcode district over the past few years, and our deposit calculator will help you work out when you’ll have saved enough.
  • Schools: if you have (or are planning to have) children, check catchment areas on the local authority website.
  • Transport connections: try the commute or school run at rush hour so you know how long (and pleasant or otherwise) your journeys would be if you moved there.
  • Shops and amenities: if these are important to you, check them out in advance – can you get to a doctor’s surgery quickly, and what are the restaurants like?
  • Local factors: does the area get busy in tourist season, or is there a sewage works nearby that can create a less-than-pleasant atmosphere? Chat to the locals for the inside track.
  • Planning applications: it’s worth checking whether there are plans for new housing developments or major infrastructure changes as these could have a real impact on your life but also local property prices.
  • Flood risks: check the government’s flood maps for a realistic view of the risk.
  • Crime: you can check how much crime there is, and what types of crime the area is most subject to, at Police.uk.

Find out more: finding the best places to live

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