UK cities 'surge up' expat rankings

The surging cost of property in the UK and the strength of the pound have helped to catapult London, Birmingham, Aberdeen, Glasgow and Belfast up the rankings in an annual survey of the most expensive cities in the world for expatriates to live in.

London was ranked the 12th most expensive city worldwide for expatriates to live in
London was ranked the 12th most expensive city worldwide for expatriates to live in

London is now the 12th most expensive city worldwide for expatriates, having been ranked at number 25 in 2013, according to the survey by Mercer which weighs up the cost of living in 211 cities across the globe.

Birmingham is the UK's second most expensive city and is ranked this year in 90th place, having leapt from number 135 in 2013 according to the research, which is designed to help multinational companies and governments set the size of compensation allowances for their expatriate employees.

Aberdeen, with its strong oil industry, follows closely behind as the 94th most expensive city, while Glasgow is at number 108.

The Scottish cities have jumped 34 and 49 places up the rankings respectively since last year.

Placed at number 120, Belfast is the least expensive place for expats to live out of the UK cities examined, although it has jumped 38 places up the rankings compared with 2013.

The survey compares the cost of housing, transport, food, clothing, household goods and entertainment around the world and currency movements are measured against the US dollar.

"This year, UK cities have surged in the ranking, mainly as a result of a strengthening of the British pound against the US dollar," Ellyn Karetnick, UK head of Mercer's International Mobility Practice, said.

"The UK's soaring housing market has also had an impact, with added pressure on the rental market as many buyers face difficulties in obtaining a mortgage.

"Glasgow and Birmingham have experienced the greatest jumps as they have had significant cost increases on goods and services and rentals."

According to the latest house price survey from building society Nationwide, house prices in London have leapt by nearly 26% over the last year, and across the UK average values now stand at an all-time average high of £188,903 across the UK.

Mercer found that an expatriate living in London typically faced paying £3,000 a month to rent a two-bedroom apartment "of international standards in an appropriate neighbourhood".

In Birmingham, this cost was around £850, while in Paris it was about £2,102, in Sydney it was £1,730 and in Madrid the cost was around £1,195.

An expat renting a two-bedroom apartment in New York faced a similar cost to a tenant in London, at around £3,203.

But in Hong Kong, the cost was typically much higher, at around £4,206.

A cinema ticket in London typically cost £13, compared with around £10 in Sydney and £9 in New York, the research found.

The price of grabbing a cup of coffee in London stood at around £2.70, which was almost £1 more than the typical price in New York, at £1.81, but cheaper than in Moscow, at around £4.12, or in Beijing, where someone would typically pay £4.85.

Luanda in Angola was named overall as the worlds's most expensive city for expats for the second year in a row, followed by N'Djamena, Chad.

Hong Kong was third, followed by Singapore, while Zurich jumped three places to rank fifth.

Karachi was named as the least expensive city for expats to live in.

Mercer said that Luanda and N'Djamena could be particularly expensive for expatriates because imported goods came at a premium and finding somewhere to live that met the right standards could be "challenging and quite costly as well".

The typical monthly cost of renting a two-bedroom apartment in Luanda for an expat was found to be almost £1,000 higher than in London, at £3,988.

Other cities which had seen big jumps compared with last year included Munich, which had risen 26 places to number 55, Paris, which was up 10 places to number 27 and Milan, which was up 11 spots to number 30.

A stronger rental market helped to push New York up eight places from last year to rank at number 16.

Mercer said European currencies had "for the most part" slightly strengthened against the US dollar and this had helped to push some cities up the ranking.

Australian cities had seen some of the most dramatic falls in the rankings this year, reflecting the depreciation of the local currency against the US dollar.

Sydney, which was ranked at 26, and Melbourne, which was at 33, had both fallen by 17 places.

Here are the 10 most expensive places in the world for expatriates to live in according to Mercer, with their placing last year in brackets:

(1) 1. Luanda, Angola

(4) 2. N'Djamena, Chad

(6) 3. Hong Kong

(5) 4. Singapore

(8) 5. Zurich, Switzerland

(7) 6. Geneva, Switzerland

(3) 7. Tokyo, Japan

(9) 8. Bern, Switzerland

(2) 9. Moscow, Russia

(14) 10. Shanghai, China